asked the Minister for Finance if his attention has been drawn to the fact that under section 3 of the Finance Act, 1980, where an employee is employed by a parent or company whose parent is a director of that company, he or she is not entitled to a PAYE allowance even though such person is paying PAYE; and if, in view of the fact that the Government in its national plan proposes to give a tax concession to the PAYE worker by increasing the PAYE allowance, he will now grant a PAYE allowance to persons in the above category.
Written Answers. - PAYE Allowance.
53.
I am aware of the provision mentioned by the Deputy. Children of employers, working in the family firm, are not entitled to the benefit of the PAYE allowance because many such employees are not on an entirely equal footing as regards obtaining the employment, security of tenure, career prospects etc. with employees who are totally unconnected with their employer. A further point is that when the allowance was introduced this exclusion was considered necessary to prevent a recurrence of a tax avoidance device which was widespread under an earlier provision in the income tax code, i.e. the creation of spurious employments for members of the family for the purpose of obtaining the benefit of the extra allowance.
I have no plans to change this position.