Government To Backdate Levys to January 1: Reports
Read more about: Fianna Fail, Fine Gael, Government 
The Irish Times reports that the Government is planning to backdate the doubled income levy rates to January 1st, rather than coming into play on May 1st as suggested on Budget day. According to the report PAYE workers wont be affected but a blended rate will be brought into place for those who are self-employed or in receipt of a bonus (or redundancy payment) will be hit by a backdating of the levy.
Among those affected may be people who took redundancy in the first four months of the year. Figures from the Department of Enterprise, Trade and Employment state that almost 21,000 people had been made redundant in the first quarter of 2009. That figure is likely to exceed 27,000 by the end of April.
While statutory redundancy payments are not subject to the income levy, as are certain ex gratia payments, many of those taking voluntary redundancy pay the levy on part of their lump sum. They will now be paying more than the 1 per cent levy they initially assumed to be their maximum exposure under the levy.
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In a note to clients yesterday, KPMG partner John Bradley said: “Individuals who received income such as bonuses or dividends in the first four months of 2009 would have expected the income to be liable to the levies at the old rates. However, the income will be liable to the levies at new composite rates.”
Mr Bradley, who heads KPMG’s international executive services unit, said a lot of people in a position to manage their affairs, such as business owners, were advised to draw down as much of their 2009 income before the Budget for tax planning purposes. He raised the prospect that a similar backdating exercise may also take place with the health levies.
No one seems to have the solid detail but according to Richard Bruton;
“Thousands of people who have been made redundant by the end of April are
likely to have the new income levy backdated on a portion of their
redundancy payments, even though the higher levy only kicks in on May 1st.“It’s bad enough that thousands of people are losing their jobs every
month. But for the Government to go chasing after their hard-earned
redundancy payments by applying new taxes retrospectively is scandalous.“This sneaky measure was brought in through the Minister’s emergency
Budget, even though he stated explicitly in his Budget speech that the
measures would start on May 1st.
Now that is bad politics.
I’m beginning to wonder should I just empty my bank account and send the lot to the taxman. I mean if they backdate this tax to get at people’s historical bonuses and redundancy payments what’s to stop them backdating other tax. Get in now to avoid penalties and interest.
It is getting to the stage where you can actually imagine the accountants in the department of finance sitting down and deciding that from 2000 to 2009 we actually paid less tax than we really should have. This meant people morally owe the state more money. Also as the voters should have pointed this out during the various elections but instead greedily accepted the tax cuts it is really the fault of the general taxpayer. Thus it is only morally right that fines and interest should be applied as a warning to future generations of voters.
Therefore all personal savings are subject to nationalisation and will be confiscated by the government. If the amount in your bank account is less than you owe then a balancing statement will be issued to adjust your tax credits to consume your entire salary until retirement. In the unlikely event that the amount in your bank account is more than you owe then this excess will be used to balance the tax due from relatives who died between 2000 and 2009 who now find themselves in tax arrears.
Sure it may seem a bit far fetched but 3 days ago so did backdating tax to target the redundancy payments of the recently unemployed.