Vol. 548 No. 5
176 Mr. R. Bruton asked the Minister for Finance if it will be possible for him to introduce some form of premium pension concession for a limited period to encourage building workers who are employed in a self-employed capacity to initiate a pension fund cover; and if he will make a statement on the matter. [5399/02]
In the Finance Act, 1999, I introduced significant changes in relation to pension rules for the self-employed. I increased the percentage of net relevant earnings which may be claimed as a deduction in respect of retirement annuities – personal pensions – from 15% to 30%, depending on age. As tax relief is available at an individual's marginal rate, there should be sufficient incentives for builders and other self-employed individuals to commence funding their pensions since then.
177 Mr. R. Bruton asked the Minister for Finance if he has considered introducing a standard VAT refund to building workers operating on a C45 scheme in order to avoid the additional paperwork of having to put VAT on their labour contracts by replacing it with a standard refund along the lines that applies in farming. [5400/02]
I should explain that the flat rate scheme which applies to unregistered farmers seeks to compensate them for the VAT charged to them on their purchases of goods and services. The scheme sets out a percentage amount known as the flat rate amount, which is currently 4.3%. Unregistered farmers add this amount to their prices when they sell their produce to VAT registered businesses.
Farmers as with most taxable persons have the option to register, if they choose. However as most food supplied by farmers is zero rated, they would be in a permanent VAT repayment position if they were required to be registered. This would create significant administrative burdens for both the farmers and the tax administration. The flat rate scheme avoids the need for such farmers to comply with the normal VAT registration and record keeping rules and relieves the State of a significant administrative burden. There is also direct legal provision for the farmers flat rate scheme in the sixth EU VAT directive.
Article 24 of the sixth VAT directive does provide for member states, which might encounter difficulties in applying the normal rate scheme to small undertakings by reason of their activities or structure, under conditions as they set out themselves, to apply simplified procedures such as flat rate schemes for the charging and collecting of tax, provided there is no reduction in the amount of tax to be collected. Any such change could only be made subject to consultation with the VAT committee in Brussels. Any change in the treatment of such persons would have to comply with the requirements set out in the directive before it would be possible to make any change.
I am not convinced that the conditions exist within the building industry as required under the terms of the directive which would meet the requirements for such a change to be made at this time.
178 Mr. R. Bruton asked the Minister for Finance the standard expense arrangements which are acknowledged by the Revenue Commissioners for building workers to take into account their need to have their own equipment; if this is graded according to the skill of worker concerned; and the four largest standard expense arrangements granted by the Revenue Com missioners to particular categories of worker and the category of worker concerned. [5401/02]
I am advised by the Revenue Commissioners that, under the provisions of section 114, TCA, 1997, an employee is entitled to claim a tax deduction for expenditure wholly, exclusively and necessarily incurred in the performance of the duties of his or her employment. The level of qualifying expenses is not related to the skill of the worker concerned.
A flat rate expenses deduction is allowed to many groups of workers so as to avoid the necessity for each individual to make a separate claim. The amount is normally negotiated by a representative body – for example, trade union or association – on behalf of its members and this is reviewed periodically, on receipt of a claim by that body, to reflect changes in costs, conditions of work, etc.
In the case of the building trade the following flat rate expense allowances apply:
|
Bricklayer |
€153 |
|
Fitter, mechanic, plasterer |
€103 |
|
Electrician |
€153 |
|
Mason, roofer, tiler, floor layer, stone cutter |
€103 |
|
Driver, scaffolder, sheeter, steel erector |
€ 52 |
|
General operatives |
€ 97 |
|
Professional – engineers, surveyors etc. |
€ 33 |
|
Nurses who supply and launder their own uniforms |
€572 |
|
Agriculture Advisers (employed by Teagasc) |
€548 |
|
Doctors/Consultants |
€534 |
|
Nurses who are obliged to supply their own uniforms but laundered free |
€496 |
