Under Section 65 of the Finance (Local Property Tax) Act, 2012, states that employers are statutorily obliged to comply with any direction that may be issued to them to deduct tax in accordance with the below statutory provision.

“Where a liable person is in receipt of emoluments… the Revenue Commissioners may direct an employer to deduct, in a period specified in the direction, local property tax payable by the liable person from the net emoluments payable to the liable person by the employer”

Further clarification of what Employers need to know regarding LPT:

• Any employee who has not yet paid, or started to pay, their applicable Local Property Tax (LPT) will have mandatory deduction at source from salary or pension imposed. Those who failed to submit their LPT return on time or failed to meet the relevant payment obligations by 1st July 2013 are under scrutiny.
• Employers and occupational pension providers alike are obliged to ensure deduction at source. Revenue should have notified the employers/ pension providers of the outstanding sums via the RPN (Revenue Payroll Notification).
• The relevant sum is to be deducted from the employee’s net pay.
• The employer is to commence deducting the LPT after receipt of a Revenue Payroll Notification (RPN) specifying the LPT to be deducted.. The LPT will be deducted from the employee’s net pay, spreading the total LPT evenly over the remaining pay periods in the year. For example if the LPT to be deducted is €300 then an employee who is paid monthly then €50 will be deducted each month. For weekly payments over 26 weeks, approximately €11.54 should be deducted weekly.
• Any refunds of LPT will be dealt with by Revenue – Employers are not to make any refunds of this kind.
• Employers are obliged to keep a record of the applicable LPT that they deduct for Revenue and are required to account for the figures in respect of the employees concerned. The employer is also responsible for recording the appropriate LPT data for employees on their payslips.

The Employer/Pension provider cannot take an instruction from the employee to stop deducting LPT from his or her salary – the employer is obliged to deduct the applicable LPT until the RPN shows that no further payment is due. If an employee would like to pay the relevant tax via a different method he or she should contact the LPT Branch and make these arrangements – then the employer will be issued with an updated RPN telling them to stop the deduction from pay/pension. Similarly if the employee feels as though there is a discrepancy in the amount of LPT they are being charged he or she should discuss this with the LPT Branch not the employer. If an adjustment needs to be made to the RPN then a revised directive will be issued to the employer – until such a directive is received the employer should continue to deduct the original LPT figure.

According to Revenue, “Where there are shortfalls due to insufficient net salary in a particular pay period(s) the employer should adjust the amount of LPT to be deducted per pay period (for the remaining pay periods in the year) to ensure the full amount of LPT is collected by the end of the year. Once this is done, the employer will not be required to notify Revenue about the shortfall. However, employers must notify Revenue in writing (e.g. by Secure Email to employersLPT@revenue.ie) where there will be insufficient income to satisfy the employee’s full LPT liability for the year, based on the expected income for the employee.”

Revenue has established a helpline for employers and pension providers alike to assist with their queries on how this LPT deduction at source will operate.