Vol. 442 No. 2
90 Mr. Yates asked the Minister for Finance if his attention has been drawn to the concern by employees in the construction industry at the widespread use of C45 certificates which have the effect of making employees self-employed without entitlement to holiday pay, sick pay and security of employment; and if the Revenue Commissioners have satisfied themselves with the current tax enforcement arrangements for the building industry in this regard.
I am aware of recent concerns expressed by trade unions as outlined by the Deputy. Forms C45 are completed by principal contractors on making payment to uncertified sub-contractors. Where such payments are made the principal contractor must deduct tax at 35 per cent on the gross amount of the payment without making any deductions for expenses or personal allowances. The C45 system should not be availed of in situations where the employer-employee rules should apply. As part of their audit programmes the Revenue Commissioners seek to ensure that the C45 system is not used inappropriately. Since the trade union concerns came to light the Revenue Commissioners have been more vigilant to ensure that there is no abuse of the system.
Arising from the Programme for Competitiveness and Work two reviews of the C45 system are currently taking place. Firstly, I have asked the monitoring group on the black economy to carry out a thorough review and to make recommendations on action to curb abuse and to improve the system generally. As part of this review the group will be looking at the adequacy of the current tax enforcement arrangements for the industry.
A second review is being carried out within the Revenue Commissioners, to check the extent and reality of any movement from employment to sub-contracting. In view of the concerns which have been raised in relation to the C45 system the Revenue Commissioners have been asked to take measures to ensure that the system is applied only to genuine sub-contract situations and are having discussions with the Department of Social Welfare to see if procedures can be strengthened further.
