Dáil Éireann debate -
Thursday, 17 Feb 1994

Vol. 439 No. 1

Written Answers. - Building Trade Statistics.

Noel Ahern

Question:

31 Mr. N. Ahern asked the Minister for Finance the most recent statistics on the number of PAYE employees currently employed in the building trade in the Dublin area; if he will give similar figures for the same period five years ago and 10 years ago; if he is concerned about the growing practice of the abuse of C45 forms; and if this abuse is illegal.

Minister for Finance (Mr. B. Ahern)

I am informed by the Revenue Commissioners that statistics are not recorded in such a manner as would enable an estimate of the number of PAYE employees employed in the building trade in the Dublin area to be provided. Such information could not be obtained without undertaking an enquiry which could be carried out only at a disproportionate cost.

Principal contractors are required to complete Form C45 on making payments to sub-contractors who have not been certified by the Revenue Commissioners to receive payments without deduction of tax. Where such payments are made the principal contractor must deduct tax at 35 per cent of the gross amount of the payment; no reduction is made for expenses or allowances. Copies of the forms are provided to the subcontractor and to the Revenue Commissioners. There is a tight system of control supported by an outdoor inspection programme which,inter alia, supervises and monitors the system generally and also follows up specific cases where there is attempted or suspected abuse. As part of their audit programmes the Revenue Commissioners seek to ensure that the C45 system is not used inappropriately.

Concern has been expressed that contractors are placing employees on the C45 system in situations where the employer/employee rules should apply. This issue was discussed in the context of the negotiations for the Programme for Competitiveness and Work.

The C45 system should not be availed of in situations where the employer/ employee rules should apply. Whether a person undertaking work for a contractor should be dealt with as an employee or as a subcontractor depends on the relationship between both parties. There are established criteria in law for determining this issue. A contractor who is in fact an employer must operate the PAYE system and cannot use the C45 system in relation to that employee.

In view of the concerns raised in relation to the C45 system I have asked the Black Economy Monitoring Group to carry out a thorough review of the operation of the C45 scheme and to make recommendations on action to curb any abuse and to improve the scheme generally. Pending the outcome of this review the Revenue Commissioners will take measures to prevent the C45 system being applied where PAYE would be the appropriate system.