Dáil Éireann debate -
Wednesday, 26 Jun 2002

Vol. 553 No. 6

Written Answers. - Industrial Disputes.

Seán Power

Question:

137 Mr. S. Power asked the Minister for Finance if his attention has been drawn to the stable staff concern in relation to the stable staff bonus scheme; and if he will intervene with a view to resolving this dispute, thus ensuring that moneys due to the stable staff will be paid. [14898/02]

Minister for Finance (Mr. McCreevy)

I am informed by the Revenue Commissioners that the bonuses payable under the stable staff bonus scheme referred to in the Deputy's question are taxable in accordance with the provisions of section 112 Taxes Consolidation Act 1997. The bonuses constitute emoluments for the purposes of the Taxes Consolidation Act 1997 and reckonable earnings for the purposes of the Social Welfare (Consolidation) Act 1993. Consequently, PAYE and PRSI including the employer's contribution and the health contribution, where relevant, must be deducted by the employer from the bonuses at the time of payment and subsequently remitted to the Collector General.

I understand from the Revenue Commissioners that the bonuses in question arise from a formal arrangement established in recent years whereby the Irish Horse Racing Association, the IHRA formerly the Turf Club, withholds 3% of prize money from race winnings and this is subsequently paid over to the winning horse trainer's stables for distribution to the stable staff.

The Revenue Commissioners have advised that the person paying the bonus, i.e. the relevant horse trainer is the employer for the purposes of the operation of PAYE and PRSI, and it is he or she who is legally bound to make the necessary deductions of PAYE, PRSI, and the health contribution, and to remit the amounts so deducted to the Collector General. The main issue at stake is that the horse trainers are liable for the employer's PRSI contribution, up to 10.75% on all bonus payments made through them to their employees under the formalised bonus scheme, notwithstanding that the bonuses originate from the IHRA and have no direct connection with the employer in question but are connected with the employees of the relevant stable.

I am informed by the Revenue Commissioners that, in order to resolve this problem they, together with the Department of Social and Family Affairs, have suggested a "netting off" arrangement whereby the amount to be distributed is deemed to be net of the employers' PRSI contribution. This will ensure that the horse trainers are not out of pocket for the employer PRSI contribution.

I understand from the Revenue Commissioners that they are still awaiting a response from the IHRA regarding the suggested treatment of the bonuses. The delay in paying out the bonuses rests with the IHRA and the individual stables and not with the Revenue Commissioners.