Vol. 472 No. 8
55 Mr. M. McDowell asked the Minister for Finance the reason a PAYE allowance is not made available to directors of small companies whose earnings are subjected to PAYE; and if he will make a statement on the matter. [24186/96]
The PAYE allowance, currently £800, is available to ordinary employees. The 1994 Finance Act extended the PAYE allowance to children of the self-employed, including farmers, and of proprietary directors who are genuinely employed in their parent's business.
Proprietary directors, who are the self-employed in an incorporated form, do not receive the £800 PAYE allowance as they are not regarded from a taxation viewpoint as ordinary employees. The cost of extending the allowance to proprietary directors generally is estimated at £18 million, and £42 million if extended to the self-employed in general. This cost could reach £65 million depending on the likelihood of additional spouses assisting in the family business in order to avail of the PAYE allowance. There are no plans to extend the PAYE allowance beyond its current application.
