Dáil Éireann debate -
Wednesday, 28 Oct 1992

Vol. 424 No. 5

Written Answers. - Non-Consultant Hospital Doctors.

Bernard Allen

Question:

54 Mr. Allen asked the Minister for Finance the way in which non-consultant hospital doctors had their special tax-free allowance for expenses associated with their work slashed from £1,800 to £200; and if he will review the situation, especially in view of the fact that hardship was caused because the drop in allowance was taken off their monthly salary cheques in one lump sum and a decision was taken unilaterally by the Revenue Commissioners without any prior consultation with the Irish Medical Organisation.

Minister for Finance (Mr. B. Ahern)

I have been advised by the Revenue Commissioners that non-consultant hospital doctors were granted a tax free allowance of £1,865 in respect of expenses, of which £1,665 represented medical indemnity insurance.

In July 1992 a change occurred in the arrangements for medical indemnity insurance. Under the new arrangements the Health Boards bear the full cost of the insurance cover. In the circumstances the doctors are no longer entitled to the £1,665 included in their tax free allowance. To prevent significant undercharges arising at the end of the year the tax offices set about reducing the 1992/93 tax free allowances of the doctors concerned. This work is ongoing.

In amending tax-free allowances the normal practice, unless hardship arises, is to apply the adjustments on a cumulative basis. This method was followed in relation to tax-free allowances adjusted in the early stages of the process and resulted in arrears of tax arising from the adjusted allowance being collected from the salary payment immediately following the adjustment.

Where an adjustment to tax-free allowances on a cumulative basis would cause hardship the Revenue Commissioners apply the adjustment from a current date and collect any arrears in a later tax year. This treatment will be applied to doctors who have not yet had their tax-free allowances reduced, as collection of the arrears due at this late stage in the year in one sum would cause hardship.