people not declaring rental homes

serotoninsid

Frequent Poster
Messages
1,760
Rent-a-room was an FF policy where the main goal was to assist people to get bigger mortgages, and politically they wanted it as easy as possible for people use.
I used it myself to contribute towards my application for a mortgage and to be taken into account when switching mortgage products.
The difference was that some people were putting it down having no intention of renting a room. You can't blame that on the scheme itself - that's down to the foolishness of those people.

There's no other income taxed the same way, it's easy to see how an initally correct use of rent-a-room could morph into tax evasion. Even the comment about "is it such a loss to the state if that figure [10,000] is exceeded slightly" shows how easy it is to be relaxed about it
Well, that was my comment - and if we all agree instead that we have to be rigid about it, then fine. I guess that comment was made on the basis that you would take into account the positives of that scheme as a whole. In a country which I find inefficient in so many ways in comparison with our continental neighbours, it's great to see an example of a clever initiative that encourages more efficient use of housing stock.....particularly so when you consider the lack of housing in the Dublin area at present.


Without the need for declaration, Revenue have no idea what's going on in rent-a-room
Didn't realise that - I had always submitted a return for rent-a-room income alone.

Revenue have no idea what's going on in rent-a-room and they have next to zero chance of detecting problems even if they get tip offs.
They had exactly such a measure in place - the tax credit system for tenants - which bizarrely they removed a couple of years ago.
 

misemoi

Frequent Poster
Messages
101
The revenue also has a huge source of information...the address to which tax credits and other correspondance is being sent. A cross check of addresses where there are people with different family names would show up a huge amount of properties being rented...verify if returns are being made on those and you have a good list of landlords to check up on. TRS, rental income tax, there is a lot to be made here if they wanted. Crazy that they removed the one thing they had in the tax credit, it was not huge but certainly kept the landlords a bit honest!
 

pAnTs

Frequent Poster
Messages
216
Actually I'm not the problem it's the tax evader and a lack of adequate system to catch them that's the problem. To be honest there's a major difference between wondering how the system works and reporting someone. I wouldn't report him because I don't feel I should be put in a moral dilemma like that if the revenue can't even be bothered to chase these people. I mean they obviously don't give a flying fiddlers so why should I jeopardise a friendship and have to live with the consequences of that? It's easier said than done. There are huge ramifications after doing something like that. I can't imagine anyone on here would do it as easily as they are suggesting. If it was a stranger maybe but not a close friend. We all know people who go around breaking the law in some minor way whether it be unpaid car tax or an unpaid TV licence and we don't go ringing the fraud squad even though the principal is the same. I honestly feel if they're missing this their system isn't for for purpose. I mean there has to be a massive amount if self employed people who under declare. A simple bank statement submission would help to solve this if they were interested....
 

mandelbrot

Former user
Messages
2,330
The revenue also has a huge source of information...the address to which tax credits and other correspondance is being sent. A cross check of addresses where there are people with different family names would show up a huge amount of properties being rented...verify if returns are being made on those and you have a good list of landlords to check up on. TRS, rental income tax, there is a lot to be made here if they wanted. Crazy that they removed the one thing they had in the tax credit, it was not huge but certainly kept the landlords a bit honest!
The "they" that removed the tax credit aren't the "they" who have the job of combating the tax evasion. I'd be amazed if Revenue officials didn't warn against removing the rent tax credit for just that reason.

As you say Revenue has plenty of information sources at their disposal and the technology to interrogate these or identify anomalies is ever improving, so it's really only a question of time for the people who think that they are conning the system.
 

mandelbrot

Former user
Messages
2,330
Actually I'm not the problem it's the tax evader and a lack of adequate system to catch them that's the problem. To be honest there's a major difference between wondering how the system works and reporting someone. I wouldn't report him because I don't feel I should be put in a moral dilemma like that if the revenue can't even be bothered to chase these people. I mean they obviously don't give a flying fiddlers
Hold on, why do you assume they aren't chasing these people?!

so why should I jeopardise a friendship and have to live with the consequences of that? It's easier said than done. There are huge ramifications after doing something like that. I can't imagine anyone on here would do it as easily as they are suggesting. If it was a stranger maybe but not a close friend. We all know people who go around breaking the law in some minor way whether it be unpaid car tax or an unpaid TV licence and we don't go ringing the fraud squad even though the principal is the same. I honestly feel if they're missing this their system isn't for for purpose. I mean there has to be a massive amount if self employed people who under declare. A simple bank statement submission would help to solve this if they were interested....
Yeah, it's that simple alright, bank statements are the answer... sure I'd say no Revenue official ever has looked at a bank statement... :rolleyes:
If their system was to be as fit for purpose as you propose, then next week you'd be on here screaming blue murder about Big Brother looking over your shoulder. There is a limit to their powers, and the information sources they have, for good reason.
 

pAnTs

Frequent Poster
Messages
216
I mean submit them as mandatory and not just as part of an audit. It's crazy. I have a long term illness and submit my medical receipts ever year. I always only submit the actual amount for a refund but in over 5 years they have never asked me for receipts. I do have to hold onto them for 5 years just in case which I do but seriously why not submit them when making the claim? it's mental. I actually wouldn't be screaming about Big Brother...you don't know me so it's strange of you to make that presumption. Im of the opinion that all my affairs are in order so Ive nothing to hide...I would welcome it if it meant there was a fairer system where the honest weren't getting hockeyed to pay for the evaders.
 

mandelbrot

Former user
Messages
2,330
I mean submit them as mandatory and not just as part of an audit. It's crazy. I have a long term illness and submit my medical receipts ever year. I always only submit the actual amount for a refund but in over 5 years they have never asked me for receipts. I do have to hold onto them for 5 years just in case which I do but seriously why not submit them when making the claim? it's mental. I actually wouldn't be screaming about Big Brother...you don't know me so it's strange of you to make that presumption. Im of the opinion that all my affairs are in order so Ive nothing to hide...I would welcome it if it meant there was a fairer system where the honest weren't getting hockeyed to pay for the evaders.
So you want Revenue staff to scrutinise every claim for medical expenses, and every bank statement. What else should they look at, since their 5,700 staff are obviously doing nothing at the moment...?

Hint: The reason they can't / don't examine everything is the same reason there isn't a Garda with a speed gun every half mile on the road.
 

dub_nerd

Frequent Poster
Messages
1,966
I can't imagine anyone on here would do it as easily as they are suggesting. If it was a stranger maybe but not a close friend.
On the contrary, I actively break off friendships with people I know who don't have their tax affairs in order. Why would I be friends with someone who thinks it's ok to rob me blind? With others, where I only have suspicions I have warned them not to discuss their tax situation with me, because I would be compelled to report them. I have zero time for cheats, and I certainly don't befriend them. I observe a personal zero tolerance approach to tax evasion.

I also try to use persuasion to get acquaintances to regularise things. With a previous employer who tried to rope me into mutually beneficial tax evasion, I demanded -- at considerable risk to my own livelihood -- that he put his house in order if he wanted me as an employee.

We all know people who go around breaking the law in some minor way whether it be unpaid car tax or an unpaid TV licence and we don't go ringing the fraud squad even though the principal is the same.
Generally it's because of lack of conclusive evidence.
 

pAnTs

Frequent Poster
Messages
216
Mandelbrot Ye I expect them to supervise health expenses!! It's not that crazy an idea.
 

pAnTs

Frequent Poster
Messages
216
Dub_nerd fair play to you. And I've been friends with this person since I was a child so I don't go round making a habit of befriending tax cheats either.
 

mandelbrot

Former user
Messages
2,330
Mandelbrot Ye I expect them to supervise health expenses!! It's not that crazy an idea.
Yet again, HOW DO YOU KNOW THEY DON'T?!

Just because some people get away with things (for a while at least), and just because your medical expenses claims haven't been queried, you think they don't "supervise" things?!

They scrutinised over 626,000 returns/claims last year, ranging from medical expenses claims right up to fully comprehensive audits - have a look here http://www.revenue.ie/en/about/publications/headline-results-2013.pdf - checking a medical expense claim would fall into the category of assurance checking. There were 355,000 of these which yielded 19.6m to the exchequer - that's €56 on average; if you dug down into that you'd probably see that the majority of cases checked had no issues and the 19.6m came from a small percentage of the cases examined.

If you assume that they apply some sort of risk assessment criteria before examining claims, as well as a certain number at random, then they probably can't expect to even aferage €56 per additional assurance check (since they should have checked the riskiest ones first) - if anything, and if the risk assessment functions properly, this average amount will fall as the number of checks increases. But there is an opportunity cost as staff have to be diverted from something else to do the additional checks. So the amount of the sort of checking you're talking about that they can do, boils down to cost vs benefit at some point.
 

pAnTs

Frequent Poster
Messages
216
So basically what your saying is for one section of the population they're going to crucify you and for another we'll trust you are paying your fair share? Not fair. A better system needs to be employed. I don't really care how it's done but me paying €20,000 in income tax alone while someone else earning the same as me and on a similar salary pays €300 per year is just not acceptable in this day and age. It's not my responsibility to come up with the answers or a system but it's clear to see the current system is not working.
 

mandelbrot

Former user
Messages
2,330
Well your attitude is very childlike and simplistic. This is the real world. There's not much difference between that, and me saying in this day and age no-one should be able to exceed the speed limit, or drink drive, because it is technically possible to install devices in every vehicle that could ensure every offence is caught.

To employ the wonder system you talk about or the driving policing system I am, so as to catch 100% of offenders in real time, would cost so much money and require so much resources, that you'd be paying a lot more than you currently are.

I reiterate what I've been saying all along - yes you may be paying more tax right now, than this person, but that doesn't mean they won't get a letter in the post tomorrow, or next week, or next month, or next year, that will have very serious consequences for them.
 

serotoninsid

Frequent Poster
Messages
1,760
So basically what your saying is for one section of the population they're going to crucify you and for another we'll trust you are paying your fair share? Not fair. A better system needs to be employed.
They may be getting away with it today, but who's to say they don't get caught - and you forget that if they do get caught, they will end up paying a hell of a lot more in tax than you ever have! In the event of that happening, whats the chances that your friend won't be as forthcoming in letting you know the bad news?

In your OP, you cite an example where you yourself admit you weren't tax compliant. On the back of that, how is it equitable to complain about others?


You also make the comparison between a self employed scenario and PAYE. There's ups n downs to both scenarios. If you're self employed, you don't have much in the way of a safety net if the worst happens. Sure, there are certain advantages. If those advantages are so extreme, then there's nothing stopping you pursuing the same. However, not everybody does - presumably because it's not necessarily always so easy....
 

pAnTs

Frequent Poster
Messages
216
Because we weren't tax compliant out of error. We misunderstood second home tax as being a tax on a second owned home not one rented and one owned. It was an error not tax evasion. Judging by the amount of tax fraud, dole fraud etc I wouldn't holds breath that much will be happening to this person. I genuinely feel they are happy squeezing the honest dry as it's easier

Your suggestion at me pursuing a different career path at this point in my life is a good one but taking into consideration all the years I've spent building up my skill base the idea of going back to college to retrain and start again all to avoid taxes isn't that tempting and besides I'm honest and pay what I owe.
 

Bronte

Frequent Poster
Messages
13,305
I mean submit them as mandatory and not just as part of an audit.
Revenue don't want any documentation, none, for rental income. They haven't the time to go trawl through bank statements etc.

But this doesn't mean they are not checking. The system works on them doing both random and selected audits. Certain things trigger audits, and then there is another percentage that are random.

When they do catch up with you, you have to show them your records, I personally know someone who made a more than 1 million settlement with revenue, and his advice to me was to keep every single scrap of paper for ever, not the 6 years revenue states. At this stage I have boxes of everything from over 20 years on rentals.

My bank statements are analysed by me and put into an excel, I also write notes on the bank statements so that if a revenue official asks me what is this lodgment of 200 Euro in 1999 for I can back it up. I'm not 100% perfect, but nobody is. If they find I've made an error in the negative, I live with the fact that it's a genuine error and no doubt they'll also find an error in my favour.

In relation to tax dodgers, I know of many cases, but I think in the landlord sector it's getting less and less easy to hide rental income, there are too many cross cheques now. Between, PRTB, social welfare tenants, LPT, NPPR, etc. Very very hard to hide rentals.
 

Protocol

Frequent Poster
Messages
2,889
Because we weren't tax compliant out of error. We misunderstood second home tax as being a tax on a second owned home not one rented and one owned.
Sloppy media and journalists used that phrase.

The Revenue or the DoF never used that language.

They always called it the NPPR tax.

It is nothing directly to do with whether the property is rented or not.

It was simply a tax on any house that you own and didn't live in.
 

serotoninsid

Frequent Poster
Messages
1,760
Judging by the amount of tax fraud, dole fraud etc I wouldn't holds breath that much will be happening to this person.
Are you basing this off anecdotal evidence or real tangible stats?

Your suggestion at me pursuing a different career path at this point in my life is a good one ��
Go back and read what I wrote -as it's not this.
..the idea of going back to college to retrain and start again all to avoid taxes isn't that tempting and besides I'm honest and pay what I owe.
And self employment provides some scope with regard to tax avoidance - which is perfectly legitimate. With regard to tax evasion, you're far less likely to have someone volunteer info in the scenario of them having to make a settlement. Furthermore, it's likely that the person you are talking about will have to get lucky not just this tax year but every other tax year. Lastly, if they aren't so fortunate, it's going to cost them considerably more in the long run.
 

pAnTs

Frequent Poster
Messages
216
In 2012 the following was written.....It's shocks and disgusts me hugely. "In Ireland, revenue lost to the shadow economy is €7.6bn — equivalent to the total amount of cutbacks and tax increases that the Government is planning to inflict on the country over the next three years."

pretty much confirms what I was thinking all along. If there were some measures taken perhaps some of the classes sizes could have been reduced or perhaps some elderly old lady lying on a trolly up in Beaumount Hospital may have been admitted sooner? perhaps you and I may not now have to watch every penny we earn so we make it to the end of the month.

http://www.irishexaminer.com/viewpoints/columnists/colette-browne/emphasis-on-social-welfare-fraud-ignoring-issue-of-tax-evasion-198781.html
 

mandelbrot

Former user
Messages
2,330
In 2012 the following was written.....It's shocks and disgusts me hugely. "In Ireland, revenue lost to the shadow economy is €7.6bn — equivalent to the total amount of cutbacks and tax increases that the Government is planning to inflict on the country over the next three years."

pretty much confirms what I was thinking all along. If there were some measures taken perhaps some of the classes sizes could have been reduced or perhaps some elderly old lady lying on a trolly up in Beaumount Hospital may have been admitted sooner? perhaps you and I may not now have to watch every penny we earn so we make it to the end of the month.

http://www.irishexaminer.com/viewpoints/columnists/colette-browne/emphasis-on-social-welfare-fraud-ignoring-issue-of-tax-evasion-198781.html
I'm not really sure why I'm even still bothering to try reasoning with you, but that figure for the size of our shadow economy has very little meaning without a context. The context it needs is a comparison to other developed countries. An OECD research paper from 2012 showed the size of Ireland's shadow economy was slightly below the average of the 39 countries studied. It was 16.1% of GDP with the average of all 39 countries being 18.3% - although as people always rush to point out, GNP is a more realistic indicator for Ireland, so the size of our shadow economy may actually be well below the average.

But really, yet again if the size of our shadow economy disgusts and shocks you, what you actually mean is that the behaviour of a substantial proportion of your fellow citizens shocks and disgusts you. Blaming the State for not eradicating it, is like blaming the State for not catching everyone who chooses to ignore a speed limit - it's insidious and very difficult to police effectively.

So in summary, stop being silly, cop on and realise this is the real world, and if you're that bothered stop pontificating here and anonymously use the contact details linked previously on this thread.
 
Top