Dáil Éireann debate -
Wednesday, 17 Feb 1993

Vol. 426 No. 2

Written Answers. - Certificates of Authorisation.

Richard Bruton

Question:

64 Mr. R. Bruton asked the Minister for Finance whether it is intended to change the present system of C2 certificates to require that they be presented only by a director of the company to any prospective main contractor; if so, the reason for this proposed change; and if discussions have been held with the industry to assess the impact of the change, both on compliance, and on the cost of compliance.

Minister for Finance (Mr. B. Ahern)

A sub-contractor holding a Certificate of Authorisation, C2, issued by the Revenue Commissioners is entitled to receive payments from a principal contractor without deduction of tax. The Revenue Commissioners became aware of abuses in the system whereby sub-contractors used certificates of authorisation issued in the name of other sub-contractors or used forged certificates. I am advised by the Revenue Commissioners that the new regulations which came into operation on 8 February 1993 were designed to counteract these abuses.

The new certificates contain the photograph of the sub-contractor. The sub-contractor must present the certificate in person to the principal contractor before payment is made without deduction of tax. Where the sub-contractor is a company the certificate must contain the name of a person nominated by the company on its behalf. The regulations provide that in the case of a company the nominated person must be a director. However, in certain circumstances where it is not practicable, in the opinion of the inspector, to have a director nominated, then a full-time employee of the company may be nominated instead to hold the certificate. To facilitate companies the inspector is also prepared to issue multiple certificates in the name of different nominees where the circumstances warrant it. Companies which have multiple contracts with the same principal contractor need only present the certificate of authorisation once a year.

Discussions were held with the Construction Industry Federation, CIF, and its views were taken on board in drawing up the new provisions. Further discussions to review the system will be held with the CIF in six months time. While it is accepted that there is an additional compliance burden the Revenue Commissioners understand that the changes are generally welcomed by the industry as a means of counteracting abuse.