IT, staff issues behind errors

THE Department of Social and Family Affairs failed to deduct tax from nearly 1,000 non-resident landlords receiving rent supplements because of IT and staff problems.

Failures to obtain tax reference numbers from landlords also meant rent records valued at nearly €200,000 could not be matched between the department and Revenue.

The Comptroller and Auditor General (CAG) examined rent supplements paid in 2005 to landlords living outside the State, for tenants unable to meet costs. A total €354 million in rent supplements was paid to landlords. This covered about 43,000 landlords here, over 5,000 agents, as well as nearly 1,000 abroad.

Despite legislation requiring tax be deducted from rent paid to non-resident landlords, the Department of Social and Family Affairs failed to do so. “Considerable development work” would have to be carried out on its computer system, the department said.

Furthermore, operational issues would arise for community welfare staff administering the rent supplement scheme.

The department said it supplied all rent supplement details to Revenue whose staff were obliged to deduct tax. Non-resident landlords were also obliged to pay taxes. But despite Revenue and the department sharing files on all landlords here and abroad receiving rent supplements, issues arose matching them.

Landlords were not obliged to supply PPS numbers on files until recently. Revenue’s attempts to match records with the Department through addresses and names showed thousands did not match up.

There were 52,792 records valued at nearly €200 million not matched to taxpayer records in 2005.

Revenue have said it is in the process of putting a project in place to tackle unmatched cases. Revenue and the department have both agreed to commence discussions about matching PPS numbers in future.