Vol. 424 No. 10
19 Mr. G. O'Sullivan asked the Minister for Finance if his attention has been drawn to the discontent expressed by members of family farms who are working full time on their farms and are not being treated equally with other PAYE taxpayers; and if he will make a statement on the matter.
I take it that the Deputy has in mind the non-availability of the PAYE allowance and the £286 PRSI allowance to farmers and members of their families working on the family farm.
The PAYE allowance is not granted to family members working in the family business or on the family farm, because such persons are not regarded as being in the same position as ordinary PAYE taxpayers, for example as regards obtaining the employment in the first place, security of employment, prospects of advancement etc. There is also an anti-avoidance aspect.
The position that self-employed taxpayers, including farmers, are not granted the PAYE allowance reflects, as the Deputy will be aware, differences in tax treatment between them and PAYE taxpayers. Self-employed taxpayers enjoy a more liberal expenses regime, they do not generally have tax deducted before they receive income, and they are taxed on the basis of income received in the accounting period ending in the current tax year, rather than the earnings in the current year.
As regards the £286 PRSI income tax allowance, this is granted to persons paying the full 5.5 per cent employee rate. It would not be appropriate to extend this to the self-employed, including farmers, in view of the relatively low — 1.8 per cent — employee element in the rate at which they pay social insurance or to others paying PRSI rates lower than the 5.5 per cent employee Class A rate.
