Written Answers Nos. 145-162
145. Deputy Michael McGrath asked the Minister for Finance if he will set out in tabular form the annual receipts and payments for each year for the period 2008-2012 in respect of the investor compensation fund; and if he will make a statement on the matter. [52896/13]
View answerAs requested by Deputy McGrath, the following table displays the annual receipts and payments in respect of the Investor Compensation Company Limited (ICCL) for each year in the period 2008-2012.
|
Financial year ended 31 July |
2008 |
2009 |
2010 |
2011 |
2012 |
Total |
|
Total Income |
5,783,362 |
6,004,379 |
6,106,747 |
5,638,591 |
7,262,149 |
30,795,228 |
|
Total Costs |
(572,583) |
(1,098,143) |
(1,206,687) |
(1,352,684) |
(16,529,038) |
(20,759,135) |
|
To Reserves |
5,210,779 |
4,906,236 |
4,900,060 |
4,285,907 |
(9,266,889) |
10,036,093 |
The Investor Compensation Company Limited (ICCL) is a company which was established under the Investor Compensation Act, 1998. The main purpose of the scheme, as determined by the Investor Compensation Act, 1998, is to provide adequate funds out of which eligible investors of failed investment firms are compensated. The funds are generated solely from levies paid by investment firms.
The information requested by Deputy McGrath and further details concerning the funding arrangements of the ICCL is publicly available from the ICCL website:
www.investorcompensation.ie/publications.php.
146. Deputy Michael McGrath asked the Minister for Finance if he will set out in tabular form the annual number of participants in the employment and investment incentive scheme since its inception; the cost in each year of the scheme; the approximate number of jobs it supports; and if he will make a statement on the matter. [52897/13]
View answerThe EII was introduced from 25 November 2011 and no investments were approved in 2011. For the year 2012, the latest year available, the estimated cost to the Exchequer for the EII was €4 million in respect of 376 investors including 2 EII funds. Full year data for the year 2013 will not be available until after the end of the year but indications are that the cost will be significantly higher.
I am informed by the Revenue Commissioners that data in relation to the number of jobs supported is not available at this stage but may become available from 2016 onwards. Under the terms of the scheme, relief in respect of 30% of the amount invested in a qualifying company is granted to the investor in the year of investment, while the balance is only due where it has been proven that employment levels have increased at the company at the end of the holding period (3 years) or where evidence is provided that the company used the capital raised for expenditure on research and development. Claims for the balance of the relief will be due from 2015 so that data on the number of jobs created under the scheme should become available from that year.
147. Deputy Bernard J. Durkan asked the Minister for Finance further to Parliamentary Question No. 41 of 21 November 2013, the options available in the case of a person (details supplied) in County Kildare in view of additional information which illustrates that transfer of ownership of a vehicle was received on 27 August and not 7 October as stated by the Revenue Commissioners. [52942/13]
View answerI am advised by the Revenue Commissioners to refer to previous replies to questions on this matter dated the 24th September 2013 (Dáil Question No 39398/13) and the 21st November 2013 (Dáil Question No 49879/13). As outlined in my reply of the 21st November 2013, the Commissioners are satisfied that an offence under Mineral Oil Tax legislation may have occurred, and as a consequence, the question of the institution of criminal proceedings in the matter is currently under consideration.
The Revenue Commissioners wrote to the owner of the vehicle on 5th September 2013, and offered a compromise arrangement to him in relation to the statutory penalty. Whilst the deadline for a receipt of a reply of 5 October 2013, as outlined in that letter, has now passed, the Commissioners are nonetheless still prepared to offer the person concerned the opportunity of agreeing to a compromise penalty arrangement. While the material supplied by the Deputy has been noted, if the person wishes to avail of the opportunity for a compromise, or provide any additional information, he should now reply to the Commissioners letter of 5 September 2013 as a matter of urgency.
148. Deputy Martin Heydon asked the Minister for Finance the reason a person (details supplied) in County Kildare has to pay additional tax after gaining employment after a period on jobseeker's benefit; and if he will make a statement on the matter. [52975/13]
View answerI have been advised by the Revenue Commissioners that jobseeker's benefit is a taxable source of income and when a person resumes work their tax credits and standard rate cut-off point are normally reduced by the amount of their taxable jobseeker's benefit. In this case the taxpayer in question has given his Personal Tax Credit for 2013 to his spouse. Accordingly, the only tax credit available to the taxpayer for 2013 is the PAYE Tax Credit. This tax credit has been restricted so as to collect the tax that is due in respect of the jobseeker's benefit that the taxpayer in question received earlier this year. A Tax Credit Certificate taking these facts into account issued to the person concerned on 15 November 2013.
149. Deputy Pearse Doherty asked the Minister for Finance if he will provide in tabular form the number of staff that are receiving a total remuneration package including pension payments, allowances and benefits of between €100,000 and €200,000, between €200,000 and €300,000 , between €300,000 and €400,000, and the number with more than €500,000 at all of the covered banking institutions, the National Treasury Management Agency and National Asset Management Agency. [52982/13]
View answer153. Deputy Pearse Doherty asked the Minister for Finance if he will provide in tabular form, with respect to each of Bank of Ireland, Allied Irish Banks, Permanent TSB, the National Treasury Management Agency and the National Asset Management Agency, the number of staff whose current annual salary falls into bands of €400,000 and above, between €300,000 and €399,999, between €200,000 and €299,999, between €150,000 and €199,000, and between €100,000 and €149,999. [52986/13]
View answer155. Deputy Pearse Doherty asked the Minister for Finance when he will publish the submissions from Bank of Ireland, AIB and PTSB following the Mercer report; and if any substantial contribution from the leadership of the banks on pay and pensions has materialised and to quantify this contribution. [52988/13]
View answer156. Deputy Pearse Doherty asked the Minister for Finance the total final cost of the Mercer Report. [52989/13]
View answerI propose to take Questions Nos. 149, 153, 155 and 156 together.
As the Deputy will be aware the Review of Remuneration Practices & Frameworks at the Covered Institutions (the "Mercer Report") was published by my Department on 12 March 2013. The following breakdown of total salary and remuneration appears on page 43 of that review.
|
- |
AIB |
AIB |
BOI |
BOI |
|
Number of Staff |
Salary |
Remuneration |
Salary |
Remuneration |
|
€300,000-€399,999 |
7 |
11 |
20 |
34 |
|
€400,000-€499,999 |
3 |
11 |
12 |
15 |
|
€500,000 or over |
0 |
0 |
6 |
11 |
Note 1: There are differences in data methodology, timing and exchange rates which account for differences in the data presented here and that shown in responses to parliamentary questions. Data for PTSB and IBRC is not shown for reasons of data protection.
There is a whole host of additional disclosures in the report that give further detailed breakdowns of pay across the banks, in particular the chart on page 42 and the table on page 46 which shows a breakdown by institution by grade of the number of staff, their salary and total remuneration, as follows.
|
- |
AIB |
BoI(2), |
IBRC |
PTSB |
|
|
Chief Executive |
Number of employees |
1 |
1 |
1 |
1(4) |
|
Salary |
€425,000 |
€623,000(3) |
€500,000 |
€400,000 |
|
|
Total Remuneration |
€488,800 |
€776,400 |
€683,600 |
€460,000 |
|
|
Senior Executives (1) |
Number of employees |
8 |
8 |
7 |
9 |
|
Salary |
€327,200 |
€408,3003 |
€365,100 |
€209,300 |
|
|
Total Remuneration |
€434,200 |
€517,400 |
€535,700 |
€269,600 |
|
|
Executives |
Number of employees |
118 |
103 |
46 |
20 |
|
Salary |
€174,800 |
€198,700 |
€184,100 |
€173,900 |
|
|
Total Remuneration |
€230,100 |
€251,800 |
€253,900 |
€220,100 |
|
|
Senior Manager /Manager |
Number of employees |
2,199 |
3,326 |
291 |
271 |
|
Salary |
€87,100 |
€76,800 |
€87,200 |
€83,000 |
|
|
Total Remuneration |
€108,300 |
€96,600 |
€115,600 |
€109,200 |
|
|
Assistant Manager / Senior Specialist |
Number of employees |
3,508 |
2,405 |
219 |
554 |
|
Salary |
€51,500 |
€49,800 |
€55,100 |
€52,700 |
|
|
Total Remuneration |
€62,300 |
€61,200 |
€61,900 |
€65,200 |
|
|
Senior Clerical / Specialist |
Number of employees |
1,584 |
3,617 |
237 |
518 |
|
Salary |
€44,100 |
€41,800 |
€40,400 |
€43,800 |
|
|
Total Remuneration |
€54,600 |
€49,900 |
€45,100 |
€54,900 |
|
|
Clerical |
Number of employees |
7,034 |
4,789 |
200 |
982 |
|
Salary |
€32,600 |
€29,600 |
€31,300 |
€30,000 |
|
|
Total Remuneration |
€37,300 |
€35,800 |
€34,500 |
€34,400 |
Notes:
1 . The Leadership Team in AIB.
2 . US employees are not included in the corporate grading structure and are therefore not included in this analysis.
3. Salary figures are net of a voluntary waiver where applicable.
4. 2012 Chief Executive data extracted from responses to recent Parliamentary Questions.
As I stated in earlier replies to Parliamentary Questions on this matter I can confirm that the three State supported banks responded with their individual strategies, designed to achieve the required savings, by the due date of 30 April as requested by the Government in response to the Mercer Report. I was not prescriptive in how this was to be achieved respecting their differing State ownership and investment and paths to profitability. I have reviewed the letters submitted and I am satisfied that the banks will deliver remuneration cost savings of 6% to 10%.
The Bank of Ireland letter focused on changes to the defined benefit pension scheme that will affect all staff who are members of this scheme and as the Deputy will be aware an agreement has now been reached with the IBOA in this regard. The AIB proposal included the closure of the defined benefit scheme to future accrual along with other changes including an increase in working hours which were agreed with the IBOA in July. The ptsb proposal centred on the wind-up of the defined benefit pension scheme for all staff who were members of this scheme.
For clarity senior management in the banks have made the following contributions: in the case of Bank of Ireland the proposed pension changes affect all staff in the BSPF scheme including the Chief Executive. AIB has taken the following specific actions to address remuneration levels: reductions in pay and benefits of higher earners ranging from 7.5% to 15% implemented in the second half of 2012 and it also should be noted that the AIB Leadership Team have all joined the bank since 2008 and receive reduced pension contributions from their predecessors. In the case of ptsb all senior management have been negatively impacted.
The National Treasury Management Agency published a table of salaries by salary band at the end of 2012 on page 35 of its annual report; the table shown below splits the staff into individuals who work for NAMA and the NTMA. It should be noted that staff in the NTMA and NAMA were subject to reductions in pay under the Financial Emergency Measures in the Public Interest ACT 2013.
|
NTMA Salaries by Salary Band at End 2012 |
NTMA (ex NAMA) |
NAMA |
Total |
|
Up to €50,000 |
92 |
25 |
117 |
|
€50,001 to €75,000 |
71 |
49 |
120 |
|
€75,001 to €100,000 |
52 |
58 |
110 |
|
€100,001 to €125,000 |
21 |
39 |
60 |
|
€125,001 to €150,000 |
14 |
31 |
45 |
|
€150,001 to €175,000 |
11 |
9 |
20 |
|
€175,001 to €200,000 |
4 |
9 |
13 |
|
€200,001 to €225,000 |
2 |
0 |
2 |
|
€225,001 to €250,000 |
1 |
1 |
2 |
|
€250,001 to €275,000 |
3 |
1 |
4 |
|
€275,001 to €300,000 |
2 |
0 |
2 |
|
€300,001 to €325,000 |
0 |
0 |
0 |
|
€325,001 to €350,000 |
2 |
0 |
2 |
|
€350,001 to €375,000 |
0 |
2 |
2 |
|
€375,001 to €400,000 |
0 |
0 |
0 |
|
€400,001 to €425,000 |
1 |
0 |
1 |
|
€425,001 to €450,000 |
0 |
0 |
0 |
|
Total |
276 |
224 |
500 |
Notes:
1. The public service pension deduction is applied to NTMA employees.
2. In December 2011 the Minister for Finance requested NTMA employees whose salaries exceeded €200,000 to waive 15 per cent of salary or such amount of salary as exceeds €200,000 if application of the full 15 per cent reduction would bring their salary to below €200,000. Reductions in respect of employees waiving such amounts are reflected in the above table.
The total cost of the Mercer report was €119,000 (ex VAT).
150. Deputy Pearse Doherty asked the Minister for Finance the total remuneration received by each of the chief executive officers of Bank of Ireland, Allied Irish Banks, Permanent TSB, the National Treasury Management Agency and the National Asset Management Agency; if he will provide a listing and quantification for each of any additional benefits paid; and in respect of any expenses allowance, if such allowances are paid only in respect of vouched and receipted expenditure. [52983/13]
View answer151. Deputy Pearse Doherty asked the Minister for Finance if the chief executive officers of Bank of Ireland, Allied Irish Banks, Permanent TSB, the National Treasury Management Agency and the National Asset Management Agency are employed on a temporary contract; if so, the date on which this contract was entered into; the termination date of this contract; and if he will quantify any termination payments provided for under the contract. [52984/13]
View answerI propose to take Questions Nos. 150 and 151 together.
Chief Executive Officers' (CEO) remuneration for 2012 is included in the following table.
|
CEO Remuneration 2012 |
Gross Salary €000 |
Other Remuneration €000 |
Pension Contributions €000 |
Total €000 |
|
AIB (i) |
475 |
71 (ii) |
546 |
|
|
BOI (iii) |
623 |
34 (iv) |
186 (v) |
843 |
|
ptsb |
353 |
54 (vi) |
(vii) |
407 |
|
NTMA (viii) |
416 |
30 |
(ix) |
446 |
|
NAMA (x) |
365 |
23 |
(ix) |
388 |
Notes:
(i) A reduction of 15% in total remuneration was applied with effect from 1 September 2012.
(ii) 'Pension Contribution' represents agreed payments to provide post retirement pension benefits for Executive Directors from normal retirement date.
(iii) The CEO has with effect from 1 May 2009, waived a portion of his salary (€67,000 for the year ended 31 December 2012). The salary shown in the table is the net amount after that waiver. The voluntary waiver has been extended until 31 December 2013.
(iv) The figure includes car allowances and, where applicable, benefits in kind.
(v) The amount relates to the Bank's pension funding contribution in respect of the pension benefit they accrued in line with their contractual entitlement during 2012.
(vi) Executive Directors are entitled to a company car or car allowance. The Group also pays private health insurance on behalf of the Executive Directors and their families. In addition, Executive Directors may avail of subsidised house purchase loans. Loans to Executive Directors are on the same terms and conditions as loans to other eligible ptsb management. The CEO took up his position at the end of February 2012.
(vii) The CEO is a member of ptsb Defined Contribution Pension Scheme. The Group contributes to this pension scheme and contributions are determined solely in relation to basic salary. The Employer Pension contribution in 2012 was €53,000 from the end of February 2012.
(viii) The remuneration of the CEO is determined by the Minister of Finance after consultation with the Advisory Committee. The CEO agreed to waive 15% of his salary following a request by the Minister of Finance and this adjustment is reflected above. The remuneration consists of basic salary, taxable benefits (car and health insurance) and a performance related payment of up to 80% of annual salary. The CEO waived any consideration for performance related pay in respect of 2012 (as he did previously in respect of 2011 and 2010).
(ix) The CEO's pension entitlements are within the standard entitlements in the model public sector defined benefit superannuation scheme.
(x) The remuneration of the CEO is determined by the NTMA CEO after consultation with the NTMA Advisory Committee. In giving advice on remuneration, the NTMA Advisory Committee is informed by the views of the NTMA Remuneration Committee. The remuneration of the CEO consists of a basic salary, taxable benefits and a performance related payment of up to 60% of annual salary. The CEO was entitled to be awarded a performance payment for 2012, but in view of the economic challenges facing the country, waived his entitlement to this payment. The 2012 salary reflects a 15% voluntary reduction.
As regards the CEO contracts, I received the following information from the banks.
AIB
David Duffy was appointed as Chief Executive Officer of Allied Irish Banks, p.l.c. in December 2011 on a fixed term contract of three years with an option to renew for up to a further three years by mutual agreement and a six months' notice period subject to a maximum compensation of six months' salary.
BOI
Information regarding the appointment and remuneration of Bank of Ireland Directors, including Group CEO, is contained within the 2012 Annual Report (pages 115-134).
PTSB
The CEO is not on a temporary contract so the detail does not apply. In accordance with the CBI code there are no Director's service contracts with notice periods exceeding twelve months or with provisions for pre-determined compensation on termination which exceeds one year's salary and benefits.
NTMA
The Chief Executive of the NTMA has a fixed term contract. No termination payments are provided for under the contract.
NAMA
The Chief Executive of NAMA has a specified purpose contract. No termination payments are provided for under the contract.
152. Deputy Pearse Doherty asked the Minister for Finance if he will provide in tabular form for each of Bank of Ireland, Allied Irish Banks, Permanent TSB, the National Treasury Management Agency and the National Asset Management Agency, the number of retired employees currently being paid a pension; if he will provide separately the number currently in the employment of the covered institution but who will in due course be entitled to a pension of between €100,000 and €200,000, between €200,001 and €300,000, between €300,001 and €400,000, between €400,001 and €500,000, and in excess of €500,000. [52985/13]
View answerThe following are the details of the number of retired employees at each of the institutions.
|
Institution |
No. of retired employees in receipt of a pension |
|
Bank of Ireland |
5,400 |
|
Allied Irish Bank(i) |
3,821 |
|
permanent tsb (ii) |
295 |
|
National Treasury Management Agency |
14 |
|
National Asset Management Agency |
- |
Notes:
i) AIB numbers as at 30 September 2013
ii) ptsb numbers as at 31 December 2012
In relation to your enquiry regarding the number of current staff who will receive pension payments on retirement of various levels, unfortunately, it is not possible to accurately forecast entitlements given the huge number of variables involved and then provide this on a comparable basis. For example in one institution there are 12 different pension schemes with 12 different sets of terms and conditions. Further given the fluidity of the current employment situation in the institutions e.g. the current schemes for early retirements and voluntary redundancies, freedom of personnel to leave on notice and the individual nature of retirement packages especially at executive level (transfer in arrangements), it is not possible to forecast figures in relation to future entitlements.
While the trustees of the schemes have actuarial models which allow them to forecast the financial state of the various schemes, these models are not available to my department and the institutions rely on their pension trustees for forecasting. In addition to the points above, due to the small number of individuals in some institutions, even if it were possible to calculate the data, it would not be possible to release the information due to data protection constraints on personal data.
NTMA employees are members of the NTMA defined benefit superannuation scheme or else have Personal Retirement Savings Accounts. The pension benefits of members of the NTMA superannuation scheme prior to 1 January 2010 are based on final salary. The pension benefits of members who joined the scheme on or after 1 January 2010 are based on career average earnings. Unlike most public pension schemes which are funded on a pay as you go basis, the NTMA superannuation scheme is a funded scheme. Pension entitlements are within the standard entitlements in the model public sector defined benefit superannuation scheme. Pension contributions are not paid to individual employees – they are paid into the scheme. The level of potential pension payments to members is dependent on length of service, based on final salary or career average earnings, with 1/80th of salary accruing for each year of service.
154. Deputy Pearse Doherty asked the Minister for Finance the number of staff who have left Irish Bank Resolution Corporation Limited or the National Treasury Management Agency since 1 January 2011 to join AIB, Bank of Ireland or Permanent TSB; if he will provide details of the posts which these persons vacated at Irish Bank Resolution Corporation and the posts they took up in AIB, Bank of Ireland or Permanent TSB; and the month in which they took up these positions. [52987/13]
View answerI have been informed that the institutions do not track or disclose this information. Due to data protection disclosures the Banks do not comment on individual staff matters. Employees are recruited though open market selection on the basis of skills and experience to meet the job requirements.
157. Deputy Pearse Doherty asked the Minister for Finance the latest volume of cash holdings by the National Asset Management Agency following the redemption of €500 million of senior bonds on 4 December. [52997/13]
View answerNAMA's cash balance following its redemption of €500m of Senior Bonds on 4th December is €3.6bn.
158. Deputy Michael McGrath asked the Minister for Finance his views on whether there are grounds for the appointment here of an independent professional to review possible mistreatment of small business customers in financial difficulty in a manner similar to the appointment by the Financial Conduct Authority in the UK of an independent professional into Royal Bank of Scotland; and if he will make a statement on the matter. [53002/13]
View answerI am aware of the content of the report to which the Deputy refers. My officials met with Ulster Bank officials on 27 November after the publication of the report. The report contained allegations about West Register and my officials were assured that West Register was involved with a very small number of Irish businesses. There is no reference to Ireland in the report. I understand that RBS has appointed Clifford Chance to independently review the treatment of distressed customers by the Global Restructuring Group and report early in the New Year. I also understand that the findings will be applied across the RBS Group.
I would refer the Deputy to the revised Code of Conduct for Business Lending to SMEs, which came into effect on 1 January 2012. A specific focus of the Code is the treatment of borrowers in financial difficulties. Lenders are required to provide information to SMEs in relation to the importance of engaging with the lender to address their financial difficulties, the procedures for dealing with SMEs in financial difficulties including timeframes, details of fees which may apply, the type of information they require in assessing cases and information on their right of appeal. Lenders must assess whether an alternative repayment arrangement can be put in place and allow the SME appeal that decision and meetings with SMEs which approach them with concerns about meeting repayments.
The banks are required to comply with the Code as a matter of law. The Code makes it clear that anybody acting for or on behalf of a bank is subject to its provisions. The Central Bank can invoke its statutory powers to require compliance with the Code. A breach of the Code is a breach of a regulatory requirement and may be the subject of enforcement action by the Central Bank. Additionally, as the Deputy is aware, the two main banks are subject to oversight by the Credit Review Office and the CRO has been active in overturning rejections by the banks of credit applications from the SME sector.
However, the Deputy can be assured that this is an area that I will keep under review given the importance of the SME sector to fostering and supporting economic recovery.
159. Deputy Damien English asked the Minister for Finance if an application for a tax clearance certificate by a community sporting organisation (details supplied) in County Limerick has been received; if a decision will be made shortly on this application; and if he will make a statement on the matter. [53013/13]
View answerI have been advised by the Revenue Commissioners that the person in question applied online for a Tax Clearance Certificate on 2 July 2013. A Tax Clearance Certificate issued to this person on 5 July 2013. This Certificate is valid until 4 July 2014.
160. Deputy Mattie McGrath asked the Minister for Finance further to the VAT rates section of the Revenue Commissioner's website which contains a subpage with respect to the supply and fit of cow mats, if he will provide details of when this subpage was published; the contents of this initial subpage; the changes that have been made to this subpage since it was initially published; the person who requested each one of these changes and the date of same; the person who approved these changes; the grade of the approving official; if there have been any requests for any of the details requested above by any Revenue district offices; when any such requests were made; the person who requested this information; if this information was provided on his behalf; and who is tasked with the responsibility of maintaining this critical and very important document. [53027/13]
View answer161. Deputy Mattie McGrath asked the Minister for Finance if he will indicate the way in which the Revenue Commissioners determine that a supplier invoice specified the reduced 13.5% VAT rate incorrectly and the standard 23% VAT rate was in fact applicable, that it is irrelevant whether the supplier invoice specified 13.5% if the applicable VAT rate is 23% and that the Revenue Commissioners consider the invoice to be charged at 23%, that VAT is calculated on the gross total and thereby the supplier has a liability for the difference between the lower rate included in the supplier's annual returns and the higher rate which the Revenue Commissioners deem the invoice to be charged at, proceedings are commenced to collect; if the person to whom the invoice was made out is also entitled to assume that the gross amount of the invoice included the 23% VAT; and if, where the invoiced person is a registered farmer for VAT purposes, they are they entitled to a further VAT rebate for the difference in the lower and the higher VAT rates. [53028/13]
View answer162. Deputy Mattie McGrath asked the Minister for Finance if the Revenue Commissioners' practice or interpretation is that agricultural buildings' non-residential immovable goods are subject to the two thirds rule for VAT purposes; and if the Revenue Commissioners implement this position in practice. [53029/13]
View answerI propose to take Questions Nos. 160 to 162, inclusive, together.
I am informed by the Revenue Commissioners that responsibility for the VAT (value added tax) pages of their website rests with Revenue's Indirect Taxes Division, which is responsible for VAT legislation, interpretation and information. Updates and changes to these pages are made exclusively by Indirect Taxes Division.
The Taxes and Duties section of the Revenue website contains a range of information regarding VAT. The VAT rates database, which contains details of an extensive listing of products and services, links to the applicable rate of VAT and other related information. The VAT treatment indicated is based on current practice and is not to be regarded as a statement of law or as a substitute for consulting the legislation.
The entire database is updated on a regular basis with rates on new goods or services or amendments to previously published rates based on changes in legislation, appeal decisions or the nature of the goods and services. When the database is updated, the rate shown for each good and service, whether it has been changed or not, is given the same update date. At present rates show an update date of 23 July 2013.
The 'cowmats' entry has been on the website database since the 1990s. The original entry read "Cowmats - Supply and Install Rate 21%", which was the standard rate of VAT at the time. In conjunction with the introduction of the Value-Added Tax Consolidation Act 2010 the database was upgraded to include an enhanced remarks field. Since 2010, the entry on the database makes reference to the two-thirds rule that may apply to cowmats in very exceptional circumstances. The entry on the database since the introduction of the VAT Consolidation Act 2010 reads “Cowmats – Supply and Fit Rate Standard Value-Added Tax Consolidation Act 2010 Ref: Section 46(1)(a) Remarks; However, some cowmats may be regarded as fixtures e.g. mats set in wet concrete or stuck down over their entire surface qualify as fixtures, subject to the 2/3 rule.”
Section 41 of the VAT Consolidation Act 2010 specifies that where the value of movable goods provided under an agreement for the supply of services exceeds two-thirds of the total consideration under the agreement for the provision of those goods and the supply of the services the consideration shall be deemed to be referable solely to the supply of the goods and tax shall be charged at the VAT rate appropriate for the goods. This is known as the two-thirds rule. The two-thirds rule applies to construction services for agricultural buildings and non-residential immovable goods. The two-thirds rule has been a feature of VAT since its introduction and is applied in all relevant cases.
Revenue select cases for intervention using a risk-based approach that considers the presence of various risk indicators and other information available, with the aid of their computerised risk analysis system, REAP. The type of intervention to be undertaken is, in any particular case, the one considered to be the most appropriate to target the specific risk identified. In many cases this may lead to a single tax head, multi tax head or single-issue audit rather than a comprehensive audit.
Section 46 of the VAT Consolidation Act 2010 provides that tax shall be charged in relation to the supply of goods or services at the rates set out in that section. Where an intervention results in the conclusion that a supplier has charged the incorrect rate of VAT, Revenue may recover the underpaid VAT by raising assessments under section 111 of the VAT Consolidation Act 2010. The recipient of a VAT invoice has an entitlement to an input credit only for the VAT shown on the invoice where the goods or services are used by him or her for the purpose of VAT-able supplies. The issuer of an invoice which shows VAT at a lower rate than the correct rate for the transaction may seek to justify their failure to correctly operate the VAT system by claiming that a loss of revenue does not arise where the recipient of the invoice, such as a VAT registered farmer, had full recoverability for the VAT.
Revenue has a clear responsibility to ensure the correct operation of the tax system, and the onus of proof that 'no loss of revenue' arises rests clearly with the taxpayer and the taxpayer and/or the tax adviser in any case must engage directly with their Revenue district to establish this. The procedures in relation to 'no loss of revenue' are clearly set out in Revenue's Code of Practice.
