New rules obstacle to switching banks
New Revenue rules will require customers to obtain written evidence from their old bank that they have paid the €40 duty. Customers who fail to produce this evidence to their new bank will be charged a second time.
The cumbersome new process is Revenue’s response to this year’s Finance Act, which scrapped the double hit that had applied to customers who switched banks.
Revenue is in talks with the Irish Bankers’ Federation (IBF) - the banks’ umbrella group - to finalise the new switching mechanism.
From next Monday, customers who close a credit card account will pay the €40 duty but will receive a “letter of closure” from their bank that confirms the duty has been paid for the year covering April 2005 to March 2006. The customer must then present this to their new bank when applying for a credit card, to allow the bank waive the stamp duty charge on the new account.
Revenue said the new procedure was necessary to comply with the terms of the revised legislation and ensure that the €40 duty was paid by every credit card holder. The IBF said customers should have no concerns about being charged twice and that the banks would aim to make the switching process “as seamless as possible”. But it will continue to lobby the Government to abolish the duty completely.
The additional paperwork comes just two months after the country’s banks agreed a new set of rules to shift the burden of complicated paperwork away from the customer.
