LPT: Revenue Property Valuation Guide (The Heatmap) now live

Dermot said:
Mandelbrot. I have no wish to fight with you as I have found you most helpful but I heard a tax official on radio stating that people who have a different valuation than the revenue for the LPT would leave themselves open to an Audit. That is not the type of word that is used by the ordinary person where a difference in property value is an issue. I've bought and sold property over the years and never used the word "Audit" in the negotiations. To the ordinary person the use of the term "Audit" is a threat. That is where I believe the use of word "audit" is inappropriate and disproportionate in the context of a genuinely held difference of opinion on price.
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The definition of an audit is an examination of records to verify accuracy. So when they said audit, they're talking about audit of the LPT figure.

To infer from the mere use of the word audit (in a conversation which presumably was exclusively about the LPT), that Revenue were threatening comprehensive audits, is IMHO hysterical, and again confirms what I said at the outset a few posts ago - people are losing the run of themselves over this.

Also, Revenue have various criteria for determining how & where to allocate their scarce resources - the Comptroller & Auditor General, and the Public Accounts Committee would have a field day if Revenue rocked up telling them they'd carried out thousands of non-yielding comprehensive audits on PAYE taxpayers, disregarding all other risk factors, because they reckoned they'd underpaid a few hundred quid's worth of LPT...
 
mandelbrot said:
To infer from the mere use of the word audit (in a conversation which presumably was exclusively about the LPT), that Revenue were threatening comprehensive audits, is IMHO hysterical, and again confirms what I said at the outset a few posts ago - people are losing the run of themselves over this.
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But such an impression has been given by various Revenue sources in recent months (including AAM if memory serves me correctly), specifically on the effect of LPT non-compliance on a taxpayer's rating within the Revenue's REAP system which selects "high risk" cases for audit.
 
T McGibney said:
But such an impression has been given by various Revenue sources in recent months (including AAM if memory serves me correctly), specifically on the effect of LPT non-compliance on a taxpayer's rating within the Revenue's REAP system which selects "high risk" cases for audit.
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Are you seriously suggesting that all things being equal, a non-compliance with LPT will shoot an otherwise compliant taxpayer to the top of the REAP system?
 
T McGibney said:
But such an impression has been given by various Revenue sources in recent months (including AAM if memory serves me correctly), specifically on the effect of LPT non-compliance on a taxpayer's rating within the Revenue's REAP system which selects "high risk" cases for audit.
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For starters LPT non-compliance is different from LPT underdeclaration Tommy. Underdeclaration can only be known with certainty when Revenue actually look at the individual case.

Non-compliance (i.e. failure to file/pay) indicates a particular type of behaviour, which logically increases the risk associated with that taxpayer, just like the failure to file any required return does.

So it feeds into the overall risk evaluation, with an appropriate weighting attached to it. I'd be amazed if in isolation it would result in a comprehensive audit.

EDIT: Actually I wouldn't be amazed, I'll eat my hat. (I don't have a hat though, so you'd have to provide the hat.)

2ND EDIT: AFAIK there aren't any Revenue sources on AAM? Apart from Tony Buckley posting on the thread about contractor audits.
 
T McGibney said:
But such an impression has been given by various Revenue sources in recent months (including AAM if memory serves me correctly), specifically on the effect of LPT non-compliance on a taxpayer's rating within the Revenue's REAP system which selects "high risk" cases for audit.
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T McGibney said:
Where did I suggest anything like that?
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Well that's how I've read your initial post quoted first above.
 
Time said:
That is the scare story being bandied around.
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Being bandied around where? The scariest thing I've heard is that non-LPT compliant people may be refused tax clearance certs, which could hurt some self-employed people.
 
mandelbrot said:
So it feeds into the overall risk evaluation, with an appropriate weighting attached to it. I'd be amazed if in isolation it would result in a comprehensive audit.
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So would I. But again an impression has been created that LPT non-compliance (in which I personally would count evasive undervaluation) will feed into the REAP system.
 
T McGibney said:
So would I. But again an impression has been created that LPT non-compliance (in which I personally would count evasive undervaluation) will feed into the REAP system.
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And rightly so, why shouldn't it?!

For anyone unfamiliar with it, here's the description of REAP from Revenue's Code of Practice:

Risk Evaluation Analysis and Profiling – REAP

REAP is Revenue's risk analysis system. It risk-rates Revenue’s customer base providing coverage across all the main taxes and duties. 'Risk' in this context means the risk posed to Revenue's core business of 'collecting the right tax and duty at the right time'. REAP has been designed to analyse a vast amount of data (including third party data) that Revenue has on tax and duty cases and to attribute scores based on the level of risk they pose. It prioritises cases based on risk, enabling Revenue to target its attention on those who need it most and minimizing contact with compliant customers. It focuses on a customer's track record rather than single returns; it ensures fairness by applying the same rules to all cases.
These rules have been derived from the collective knowledge and experience of Revenue auditors.
 
For what it's worth (and your mileage may vary) I've looked at four specific Dublin properties of interest to me and the guidelines figure given by the Revenue website looks more or less accurate based on my knowledge of the properties/areas, recent market activity and the property price register database. In the case of my own home the guideline figure may be a slight underestimation. I don't know if the individual letters coming out will just restate the guideline figure from the website or will it contain a more specific/individualised estimate?
 
mandelbrot said:
And rightly so, why shouldn't it?!

For anyone unfamiliar with it, here's the description of REAP from Revenue's Code of Practice:

Risk Evaluation Analysis and Profiling – REAP

REAP is Revenue's risk analysis system. It risk-rates Revenue’s customer base providing coverage across all the main taxes and duties. 'Risk' in this context means the risk posed to Revenue's core business of 'collecting the right tax and duty at the right time'. REAP has been designed to analyse a vast amount of data (including third party data) that Revenue has on tax and duty cases and to attribute scores based on the level of risk they pose. It prioritises cases based on risk, enabling Revenue to target its attention on those who need it most and minimizing contact with compliant customers. It focuses on a customer's track record rather than single returns; it ensures fairness by applying the same rules to all cases.
These rules have been derived from the collective knowledge and experience of Revenue auditors.
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mandelbrot said:
To infer from the mere use of the word audit (in a conversation which presumably was exclusively about the LPT), that Revenue were threatening comprehensive audits, is IMHO hysterical, and again confirms what I said at the outset a few posts ago - people are losing the run of themselves over this.
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So LPT non-compliance will or won't increase the chances of a comprehensive audit?
 
'Why would anyone's accountant value their property?'

Would they not give an opinion to their client on the accuracy of the figures submitted to revenue?
 
Sumatra said:
'Why would anyone's accountant value their property?'

Would they not give an opinion to their client on the accuracy of the figures submitted to revenue?
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Accountants cannot be expected to have expertise on specific property valuations, unless they have appropriate training and/or qualifications. I cannot imagine there are many such accountants out there.
 
Tommy, what would be wrong if an accountant offered an opinion on a figure that one of their clients submitted or was about to submit to revenue. Accountants would have the same tools at their disposal as their clients are using.
 
T McGibney said:
So LPT non-compliance will or won't increase the chances of a comprehensive audit?
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There's no inconsistency in those 2 quotes, in the context of this thread.

People on here are talking about the perceived risk of a comprehensive revenue audit because they, in good faith (or hand on heart, to paraphrase a couple of posters), value their property lower than the indicative value they receive from Revenue.

In such a case, the worst case scenario I would expect, is that at some point Revenue may seek clarification from them as to the basis of their valuation. If they end up charging the taxpayer a higher rate of LPT, and form the view that the taxpayer was engaged in evasive undervaluation as you put it, then you'd expect this merits a risk flag. But you'd surely have to be talking about several bands in the difference before you get into that category.

Non-compliance with LPT, as in outright refusal to file the return form, will simply result in Revenue using one of the various collection means at their disposal to collect based on their own indicative value, AND will increase the risk rating with Revenue, as they have displayed a behaviour consistent with unwillingness to fulfil their tax obligations.

I'm pretty sure Josephine Feehily more or less said in the Pat Kenny interview that Revenue have bigger fish to fry than be out conducting audits for fiddly amounts of money - by any yardstick auditing for €180 of tax per €100k of property value is likely to result in relatively small money. I think in relation to the LPT the horses are spooking themselves...!
 
Sumatra said:
Tommy, what would be wrong if an accountant offered an opinion on a figure that one of their clients submitted or was about to submit to revenue. Accountants would have the same tools at their disposal as their clients are using.
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Nothing wrong with anyone giving an opinion, but the client might be as well off asking their GP or pharmacist. Accountants do have a lot of experience in relation to Revenue compliance and should be well placed to advise and assist clients in completion of forms etc but this wouldn't extend to valuation of properties.

Where such issues arise in other contexts, eg valuations relevant to CAT or CGT returns, a wise accountant will normally advise their client to obtain such valuations from a reputable, accredited and experienced valuer.
 
Sumatra said:
Tommy, what would be wrong if an accountant offered an opinion on a figure that one of their clients submitted or was about to submit to revenue. Accountants would have the same tools at their disposal as their clients are using.
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So, in other words they should come up with the same figure? Except they'll have to be paid to do it...

Some people round here are dying to spend money (auctioneers' valuations, accountants' valuations etc) rather than just follow a fairly simple set of instructions...

EDIT: ... and, God forbid, use their own common sense!
 
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