Specific debts: electricity, gas, tax, waste charges, TV licence and others

Introduction

There are specific rules and practices in place in relation to certain debts. These are mainly debts which are owed to the State or a State body and arise from statutory charges and levies, debts to providers of essential services, such as utility companies, and debts arising from statutory obligations, such as the obligation to pay maintenance to spouses and children. Specific rules and practices apply to the following:

• Taxes
• Social welfare overpayments
• Local authority rents
• Local authority housing loans
• Waste charges
• Utilities: electricity, gas
• TV licences
• Non-principal private residence (second home) charge
• Dog licences

Taxes

In general, you are expected to pay your taxes on time and in full. If you fail to do this, the Revenue Commissioners have a range of options for collecting the tax due.

Prosecution

If you fail to pay your tax on time, you may be prosecuted and convicted of an offence. This may lead to a fine and/or imprisonment. The level of fines and length of imprisonment vary in accordance with the gravity of the different offences under revenue law. Regardless of the outcome of the prosecution, you are still obliged to repay the underpayment.

How Revenue collects taxes which are overdue

The main ways in which Revenue collects overdue taxes from individuals are:

• Phased payment arrangements with or without the application of interest
• Collection by the Sheriff – this is the most used method
• Court action
• Attachment of a debt

Receivership or liquidation may also be used in the case of companies.

Phased payment arrangements

If you owe money to the Revenue Commissioners for unpaid taxes you may be able to agree a repayment arrangement. However, in general, interest applies to any late taxes and so you have to pay this as well. In some cases, penalties may also apply.

If you are paying income tax through PAYE and you underpay in a particular year, you may be able to pay the amount due by having your tax credits in a subsequent year reduced. In general, interest is not applied in these circumstances.

In other cases where you have not paid or have underpaid your tax, you may be able to agree a phased payment arrangement. This generally does involve the payment of interest as well as the amount owed.

Collection by Sheriff

If you get a final demand from the Revenue Commissioners for the payment of any taxes due and you do not respond, Revenue may refer your case to the Sheriff for enforcement. It is not necessary to have a court order. There are 16 Sheriffs appointed by the Minister for Justice and Equality to carry out debt collection for Revenue.

The Sheriff is given a warrant, which is a legal document conferring authority on the Sheriff to enforce collection of Revenue liabilities, if necessary, by seizing goods. A warrant is valid for 12 months. However, if the Sheriff fails to collect any of the liability within 6 months, the certificate must be returned to Revenue. The Sheriff has the authority to negotiate a payment arrangement, not exceeding 2 years, with you.

Once your case has gone to the Sheriff, you must then deal with the Sheriff. You cannot deal with Revenue officials as this is part of Revenue’s agreement with the Sheriffs. Revenue Sheriffs are officers of the courts and are responsible to the courts. There is a Code of Practice for Revenue Sheriffs (pdf).

Revenue Sheriffs are paid in the same way as other sheriffs.

Court action

Revenue has contracts with 6 firms of solicitors to help enforce Revenue debts. They are involved in taking cases through the courts in the normal way. If judgment orders are granted by the courts, the orders are enforced in the normal way.

Attachment of a debt

The Revenue Commissioners have specific powers of attachment of debt which can be exercised without a court order.

Social welfare overpayments

If you have received money from the Department of Social Protection which you should not have received, you are generally legally obliged to repay it. This is the case whether the overpayment arises as a result of fraud, a mistake by you or a mistake by the DSP.

Read more about how the Department deals with social welfare overpayments.

Local authority rent arrears

If you fall behind in your local authority rent, the local authority must follow the code of practice for dealing with arrears (pdf).

Some local authority rent schemes may allow for a rent reduction in cases of hardship.

Consequences of failure to pay rent

If you fail to pay your rent, the legal consequences can include:

• Being charged interest at a rate of 6% on the arrears as long as they remain unpaid
• Notice to quit, followed by repossession of your home
• Ineligibility for further social housing support

Local authority loan arrears

If you have a loan from a local authority for buying or improving your house and you are having difficulty making your repayments, you may be able to make an arrangement with the local authority. In 2010 the Department of the Environment and Local Government issued a guide to local authorities on how to deal with mortgage arrears, based on the Financial Regulator’s code of conduct for banks and building societies (pdf).

Consequences of failure to pay loan arrears

If you fail to pay your arrears, the legal consequences can include:

• Being charged interest at a rate of 6% on the arrears as long as they remain unpaid
• Repossession of your home
• Ineligibility for further social housing support

Read more about local authority loans and arrears.

Waste charges

If you have not paid the charge levied by your local authority for the collection of waste within 2 months of the due date, the local authority may take court proceedings against you for the payment as a simple contract debt. It is not an offence to fail to pay.

If you have a contract with a private waste collection agency, any debt owed to it is a simple contract debt.

You may be eligible for a waiver of the waste charges.

Utilities codes: electricity, gas

Suppliers of electricity and gas are required by their regulator, the Commission for Energy Regulation (CER), to have codes of practice for dealing with customers who have difficulties paying their bills and build up arrears of payments.

The following codes cover the utility companies which supply residential customers:

• ESB Electric Ireland: Code of Practice for billing and payments
• Airtricity: Customer Charter, Billing
• Bord Gáis Energy: customer codes
• Flogas Natural Gas: Code of Practice on payment of bills

If you are having difficulty, or likely to have difficulty, paying your utility bills, it is very important to contact your supplier as soon as possible. Options that can be put in place with your supplier might include setting up a budget plan, spreading your payments across the year, installing a pre-paid meter or using a pre-paid card.

Other companies which supply industrial and commercial customers also have codes of conduct or charters.

TV licences

TV licence fees are payable to An Post. (The Minister for Energy, Communications and Natural Resources may designate another body as the 'issuing agent' but at present it is An Post.)

Procedure

If An Post considers that you do not have a TV licence and you are obliged to have one, it may send you a reminder notification. This can be delivered personally or sent by post. This gives you 28 days to pay. If, after 2 such notifications, you do not pay the licence fee, An Post may serve you with a fixed payment notice. This is similar to fixed payment fees for certain motoring offences.

You now have 21 days in which to buy your TV licence and pay the fixed payment fee. The fixed payment fee is one-third of the licence fee. At present, it is €53.

If you do not buy your TV licence and pay the fixed payment fee, you may be prosecuted in the District Court.

An Post may look for judgment for the outstanding payments as a simple contract debt.

Prosecution

It is an offence not to have a TV licence if you have a TV set. The maximum fine on first conviction is €1,000 and €2,000 for a second or subsequent offence.

Non-principal private residence (second home) charge

The Non-Principal Private Residence (NPPR) charge is payable on any second residence that you own.

If you fail to pay the charge on time you are subject to a late payment fee of €20 a month. The local authority may go to court to get judgment for the amount as a simple contract debt.

Any unpaid charges or unpaid late payment fees remain as a charge on the property and are payable if the property is sold or passed on inheritance.

Prosecution

It is an offence to fail to pay the charge. If you are convicted, you may be fined up to €2,000 and, after that, you may be fined €100 a day for every day the charge remains unpaid.

Dog licences

If you have a dog over 4 months old, you must have a dog licence for it. If you do not have a licence for your dog, you are liable to a €30 'on-the-spot' fine. Failure to pay this fine can lead to a prosecution, with a maximum fine of €1,269.74 and/or up to 3 months' imprisonment if convicted.

The debt may be collected as a simple contract debt.

The Fines Act 2010

The Fines Act 2010 introduces some new features in how the Courts collect fines, including the possibility of paying a fine by instalments or of having a fine treated and enforced as a civil debt. The Act also includes provision for a judge to order someone to do community service rather than serve time in jail for non-payment of a Court fine. These provisions of the Fines Act 2010 are not yet in force.