THE REVENUE Commissioners’ decision to withhold mortgage interest tax relief from nearly 60,000 homeowners until it gets its records clarified is “unprecedented”, an accountants’ representative group claimed last night.
The Institute of Chartered Accountants (ICAI), which already voiced unhappiness over the decision to apply the income levy retrospectively, was again vocal in criticism of the Revenue.
“The mortgage interest relief change should be straightforward, yet we find that Revenue is to withhold relief to many thousands of taxpayers who retain their entitlement, until Revenue gets their records sorted out. This is unprecedented. Tax changes must be applied fairly,” said ICAI director of taxation Brian Keegan, adding: “In the past, where a tax change has had to be made quickly, Revenue would give the taxpayer the benefit of any doubt and make adjustments subsequently as required.”
Numerous changes had been made by the Revenue to mortgage interest relief in past budgets “without disruption”, he said, though these were all regular annual budgets.
Labour TD Joan Burton said the Government had made an “absolute dog’s breakfast” of the decision. There is some irritation in the Government that it is taking blame for an administration issue – the preserve of the Revenue. Other sources point out the Revenue has grounds for feeling aggrieved as the mortgage change was a last-minute alteration.
During the Dáil’s order of business, Ms Burton said: “We are told that this was the most prepared budget in the history of the State, and that Cabinet Ministers met no less than 10 times to work out the detail . . . yet they have left an extraordinary trail of confusion.”
Fine Gael deputy leader Richard Bruton said the Government had itself warned for months that tax changes during the course of a year were difficult to implement. “The Minister had ample time to anticipate those difficulties and make sure that the sort of fiasco we have today would not happen. This is an indication of failure on the part of Government,” he said.
Replying, the Minister for Finance said the Revenue Commissioners had “made it clear that non-first time buyers do not need to do anything at this stage.
“The Revenue Commissioners will make the necessary administrative arrangements, in liaison with the financial institutions, for the relevant deductions. It may take two months for this arrangement to be finalised by the Revenue Commissioners,” he said.
Later, the Revenue stated on www.revenue.ie: “Non-First Time Buyers are only entitled to the relief after 1 May where they are in the first seven years of the mortgage on a qualifying loan. Revenue has been working with the lenders to identify those accounts where there will be an entitlement to mortgage relief under the new rule. Until that entitlement can be established mortgage interest relief is not being paid from 1 May. Where, based on the information provided by lenders, an entitlement to relief is established, tax relief at source will be reactivated automatically . . . in June.”
