THE COST of graves is set to increase by 13.5 per cent along with many local authority services when new value added tax provisions come into force on July 1st.
Off-street parking charges and household waste collection services are also likely to increase when the new VAT regime begins next month. And the cost of affordable houses sold by councils is also set to go up.
The provisions, introduced under the Finance Act 2010 following an EU directive, require local authorities to charge VAT on their services.
Other council services due to increase as a result of the VAT hikes include household waste collections charges, with VAT of 13.5 per cent and parking charges with VAT of 21 per cent. VAT will also be charged on landfill charges, recycling charges, replacement of wheelie bins, car removal and photocopying in libraries.
Community facilities, including facilities for taking part in sporting activities and the hiring of halls, meeting rooms and grounds to non-profit making sporting, cultural, social and community organisations, will be exempt.
According to the Revenue Commissioners, it is up to each local authority to decide whether or not to pass on the VAT to customers. There are mechanisms for the council to claim the VAT back.
Councils around the country are considering how to handle the VAT. They have three options; they can pass it on to customers, they can offset some of the VAT through available mechanisms and pass on the remainder to customers or they can absorb it themselves and cut budgets in other areas. It is likely the full VAT on burial plots will be passed on to customers because there is no mechanism by which the councils can claim it back.
Fingal County Council has already decided to absorb the VAT on bin charges and parking charges for 2010; other councils have not yet made a final decision. Some are still in discussions with the Revenue Commissioners while others are working through the details with their councillors.
Most of the councils have said they are attempting to deal with the new measures in a financially neutral fashion, but have acknowledged the new regime will put an enormous burden on administrative staff resources.
Dermot Jewell, chief executive of the Consumer Association of Ireland said when the VAT increases were first flagged there was a general assumption local authorities “would and should” absorb them. “We would have an expectation it would be absorbed,” he said.
