Written Answers Nos. 102-117
102. Deputy Jack Wall asked the Minister for Finance the reason a person (details supplied) in County Kildare has been assessed for tax purposes with an additional payment when they have not received this payment to date; and if he will make a statement on the matter. [55189/13]
View answerI have been advised by the Revenue Commissioners that they were notified in November 2013 by the Department of Social Protection that the person concerned was awarded the additional payment. Following receipt of that advice a revised tax credit certificate issued so that income tax on that additional payment for November 2013 and December 2013 would be collected during that year. No other amounts in respect of arrears have yet been subject to income tax. The position for 2012 and 2013 will be definitively established when the amount of arrears of pension are received by the person concerned.
It will be necessary for Revenue to review the tax liability of the person concerned when the arrears of pension are paid and credit will be given for the tax already paid in November and December in respect of the pension in question.
A Tax credit certificate for 2014 issued to the person concerned on the 16 December 2013. That certificate includes only the pension actually payable for 2014 by the Department of Social Protection and the tax credits appropriate to the person's spouse.
103. Deputy Michael Healy-Rae asked the Minister for Finance his views on correspondence (details supplied) regarding the Irish Bank Resolution Corporation. [55194/13]
View answerI am advised that the contractual terms and conditions of customer mortgages and other borrowings have not changed as a result of the appointment of the Special Liquidators nor will they change following the ultimate sale of the obligations to a third party. However as IBRC is in liquidation it is limited in terms of the supply of further credit to customers.
The Special Liquidators have confirmed that the residential mortgage customers of IBRC Limited (in Special Liquidation) continue to enjoy the protection of the Central Bank Code of Conduct on mortgage arrears and other protections in Irish consumer law. The Special Liquidators continue to engage with customers who are in difficulty through the implementation of CCMA and are entering into appropriate MARS strategies with them. Any borrower who is in difficulty should contact the Mortgage Arrears Unit in IBRC (now in special liquidation). The address is as follows: IBRC Mortgage Arrears Support Unit, IBRC (in Special Liquidation), Stephen Court, 18/21 St Stephens Green, Dublin 2. They could also contact the Mortgage Arrears Unit by phone @ 01 609 6182 or by email at asu@ibrc.ie. There is also additional information available on the website www.ibrc.ie.
The Special Liquidators have given significant consideration to and have sought independent advice from PWC in relation to how the residential mortgage portfolio and other loans in IBRC are to be dealt with. Following that independent advice, the Special Liquidators have decided that the residential mortgage book would be split into four segments consisting of performing, non-performing, owner occupier and buy to let mortgages with a view to maximising market interest. Therefore the Special Liquidators have decided not to accept any bids from individual mortgage holders. The Special Liquidators have confirmed that all Borrowers are permitted to buy-out their mortgage at par value and that there are no legislative barriers for such Borrowers to do so.
The decision concerning how the loans will be packaged for sale and what bidders constitute qualifying bidders for the purposes of the sales process has been made by the Special Liquidators and I will not intervene in this matter.
104. Deputy Peter Mathews asked the Minister for Finance the reasons the European Central Bank reduced interest rates were not passed on to the variable mortgage holders; and if he will make a statement on the matter. [55204/13]
View answerI, as Minister for Finance, have no statutory role in relation to the mortgage interest rates charged by regulated financial institutions. It is a commercial matter for the banks concerned.
The mortgage interest rates that financial institutions operating in Ireland charge to customers are determined as a result of a commercial decision by the institutions concerned. This interest rate is determined taking into account a broad range of factors, including European Central Bank base rates, deposit rates, market funding costs, the competitive environment and an institution’s overall funding.
105. Deputy Noel Grealish asked the Minister for Finance his views on whether buying houses or apartments for rent is a business; if he will ensure that all the normal and legitimate expenses of a business are therefore available for landlords, including restoration of 100% of mortgage interest payments and the immediate application of local property tax as an expense; if he can require the Revenue Commissioners to include particular types of business expense on the Revenue schedule of allowable expenses; and if he will make a statement on the matter. [55208/13]
View answerI am assuming that the Deputy's question on whether the purchase of property for rent is a business relates to the renting of the property, rather than to its purchase. I am advised by the Revenue Commissioners that under existing legislation income tax is charged under Schedule D of the Taxes Consolidation Act (TCA) 1997 in respect of a number of sources of income, which are classified into five separate Cases. Under this provision, rent received by landlords (both individuals and companies) from property in the State is chargeable to tax under Case V, while income from trading activity in the State is chargeable under Case I.
In the case of trading activity, the law provides that taxable income is closely aligned to the accounting profit (subject to certain explicit prohibitions). In the case of rental activity, however, taxable income is the gross rent as reduced by a limited number of specified deductions as set out in section 97 (2) TCA 1997.
These are:
- any rent payable by the landlord in the case of a sub-lease;
- the cost to the landlord of any goods provided or services rendered to a tenant;
- the cost of maintenance, repairs, insurance and management of the property;
- the interest paid on borrowed money used to purchase, improve or repair the property (which, in the case of residential property, is restricted to 75% of the interest and is subject to compliance with PRTB registration requirements for all tenancies that existed in relation to the property in the relevant year); and
- payment of local authority rates.
In addition, wear and tear capital allowances are available in respect of the capital expenditure incurred on fixtures and fittings provided by a landlord for the purposes of furnishing rented residential accommodation. These allowances are granted at the rate of 12.5% per annum of the actual cost of the fixtures and fittings over a period of 8 years.
In relation to the provision of a deduction for local property tax, it is the intention of the Government to introduce such a provision on a phased basis but the manner in which this will happen has not been decided. Any such change would have to be provided for by primary legislation.
As the provisions relating to deductible expenses for rent purposes are specifically provided for in legislation, Revenue cannot allow deductions other than in accordance with the legislation and I cannot require them to do otherwise. Any change to the range of deductible expenses would have to be dealt with by way of changes to the primary law. In that regard, however, apart from the intention to allow for a deduction for local property tax mentioned above, I have no plans to otherwise broaden the range of expenses deductible in relation to rental income or to remove the existing restriction on interest deductibility.
106. Deputy Kevin Humphreys asked the Minister for Finance if a business can deduct the costs of petty theft of stock from a store against a tax bill; the rules for same; and if he will make a statement on the matter. [55234/13]
View answerI am informed by Revenue that the starting point for determining the taxable profits of a business is the accounting profits of that business, calculated in accordance with Generally Accepted Accounting Practice (GAAP ). Under GAAP, stock must be valued at the lower of cost or net realisable value. Accordingly, stock which has been stolen will have a Nil valuation and as the cost of acquiring such stock will be allowed as a deduction a business will obtain full relief for any stock that is stolen. A Revenue official, in some instances, may need to be satisfied that a low gross profit rate is correctly attributable to the theft of stock and in this regard it may be necessary to examine stock sheets, books and records and the steps taken to recover the alleged theft of such stock.
There are no VAT implications for a business relating to stock thefts and, where a business has incurred VAT on the acquisition of stock, the business is entitled to claim a credit for the VAT element of such purchases notwithstanding that the stock may subsequently be stolen.
107. Deputy Michelle Mulherin asked the Minister for Finance the person responsible for setting up a management company and ensuring a unit is multi-unit development compliant in the event that the unit being sold through the National Asset Management Agency; the way a prospective purchaser can complete the purchase of a unit where there is no such compliance; and if he will make a statement on the matter. [55267/13]
View answerI am advised this is ultimately a matter between the vendor of a residential property (who may be a debtor or receiver) and the purchaser and their respective legal advisers. As the Deputy is aware, NAMA does not own or sell property. Rather, NAMA’s role is, like a bank, that of a secured lender. In the context of its role as a secured lender, NAMA applies significant resources to resolving planning and building compliance issues, including compliance with the Multi-Unit Developments Act 2011, relating to property over which it holds security.
108. Deputy Michael McNamara asked the Minister for Finance if there is any legal impediment to local authorities passing on, or charging a levy in respect of, the local property tax payable in respect of local authority owned properties to the tenants thereof; and if he will make a statement on the matter. [55297/13]
View answerLocal authorities are liable for the Local Property Tax (LPT) as owners of residential properties. However, an exemption from LPT applies where such properties are used to provide "special needs accommodation", meaning properties provided to people who require support to enable them to live in the community, such as sheltered accommodation for the elderly or the disabled. The Revenue Commissioners have published guidelines to assist local authorities in identifying such accommodation. All local authority residential properties which are liable to LPT will be in the lowest valuation band for the initial valuation period (2013 to 2016). Nothing in the LPT legislation prevents a local authority from recouping all or part of the LPT from its tenants through rent increases or levies. This decision is a matter for individual local authorities.
I am advised by my colleague, the Minister for Environment, Community and Local Government, that under the current statutory basis for the charging of rent by local authorities for their dwellings, section 58 of the Housing Act 1966, housing authorities are responsible for determining the rents of their dwellings, subject to complying with broad principles laid down by his Department, notably that the rent payable should be related to income and that low-income households should pay a lower proportion of income in rent. This current statutory basis does not provide for a specific levy or charge in respect of works or services provided otherwise than under the Housing Acts 1966 to 2013. However, the enactment does not prevent the amount of rent from being set at a level that will generate funds that could be used by a local authority to pay LPT in respect of a dwelling.
I am further advised by the Minister for the Environment that the current arrangements for determining local authority rents will be substantially replaced on the coming into force of section 31 of the Housing (Miscellaneous Provisions) Act 2009, which predates and does not refer to the LPT legislation. Following the enactment of the Housing (Amendment) Act 2013 in July, regulations are being finalised under section 31 of the 2009 Act re-affirming the principle that rents should be related to household income and composition, and reflecting the requirement that housing authorities should set rent levels that take account, as far as practicable, of the cost of providing works and services to, and managing and maintaining, their rented accommodation.
109. Deputy Clare Daly asked the Minister for Finance if Danske Bank, when it announced it was withdrawing from Ireland in October, submitted plans to the Central Bank of Ireland for an orderly withdrawal from the market; and the reason these are not being communicated to clients either by Danske Bank or the Central Bank. [55298/13]
View answer110. Deputy Clare Daly asked the Minister for Finance the actions the Central Bank of Ireland has taken to facilitate an orderly withdrawal of Danske Bank from the Irish market; and if it has considered organising a mass switch on existing terms and conditions to one of the pillar banks, into which taxpayers have already injected so much money. [55299/13]
View answerI propose to take Questions Nos. 109 and 110 together.
The Central Bank has informed me that prior to Danske Bank Ireland’s public announcement, the bank informed the Central Bank of its commercial decision to withdraw existing day to day personal customer products and services on a phased basis during the first half of 2014, and also to discontinue the provision of personal and business banking products to new customers. Danske Bank has advised it will continue to operate in Ireland but will re-focus its business towards its Corporate and Institutional clients.
Danske Bank remains authorised by the Danish FSA and customers continue to receive the protections of Irish financial services legislation, specifically the protections of the Central Bank’s Codes of Conduct. The Central Bank does not get involved in the commercial decision of a European Bank to withdraw services from the Irish market other than to ensure it does this in line with the appropriate rules and regulations, including consumer protection requirements such as communications with customers. The Central Bank continues to monitor Danske Bank's adherence to these rules and is engaging with the bank as the withdrawal progresses.
Other banks continue to be open for new current account business and have confirmed that they will accept accounts switching from Danske Bank where appropriate. Consumers could look at the National Consumer Agency’s website www.consumerhelp.ie for information about choosing a current account. All banks providing current accounts in Ireland are subject to the Central Bank’s Switching Code, which is designed to make the process of switching current accounts easier and quicker and to offer protection and support for consumers when switching bank account. The Switching Code places obligations and time limits on both the old and new bank when completing the switching process. Where accounts include credit facilities, such credit facilities will be subject to the credit assessment process applicable at the receiving bank.
It is for each customer to decide whether to switch a closing account to another bank, and which bank to switch to.
Customers with any concerns or questions about their accounts are advised to contact Danske Bank Ireland directly. Other information is available on Danske Bank’s website www.danskebank.ie. If customers are not satisfied with how the bank is dealing with them, they should firstly complain to Danske Bank. If customers have made a complaint to Danske Bank and are not satisfied with the outcome, they have the right to escalate the complaint to the Financial Services Ombudsman.
111. Deputy Dan Neville asked the Minister for Finance if he will issue the appropriate documentation in respect of property tax to a person (details supplied) in County Limerick. [55367/13]
View answerI am advised by the Revenue Commissioners that they issued letters in late October 2013 to certain property owners concerning their 2014 Local Property Tax (LPT) obligations. Those contacted were property owners who filed their 2013 LPT Returns and paid their liabilities by lump sum or by way of regular cash payments. Revenue further advised me that it did not write to certain other categories of property owners, including those on phased payment arrangements and those who had not filed Returns in respect of 2013.
In the case raised by the Deputy, I am advised the difficulties arose because, while the person in question made payments amounting to €120 in respect of the 2013 'half year' liability he did not file an LPT Return and for that reason did not receive communication about his LPT for 2014.
A member of the LPT team has conacted the person in question. The LPT process was explained to him in detail and he was assisted in filing the 2013 Return. As a consequence of filing the return and selecting 'Band 1' as the most appropriate valuation of his property, an overpayment of €75 has arisen. This overpayment has been set against the person's 2014 liability leaving a balance of €15 outstanding. The person has committed to pay the outstanding balance through one of the third party "payment service providers" at which point his LPT obligations for both 2013 and 2014 will be fully up to date.
112. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which agency staff have been used in his Department in each of the past five years to date for the purpose of answering and transferring calls on their switchdesk; and if he will make a statement on the matter. [55434/13]
View answerIn response to the Deputy s question, my Department uses its own staff and staff supplied under an arrangement with the National Council for the Blind for the purposes of answering and transferring calls on our switch board during office hours. Outside of these hours calls are handled by Department staff. My Department also looks after this service for the Department of Public Expenditure and Reform.
113. Deputy Mary Lou McDonald asked the Minister for Finance the advice he will provide to a person (details supplied) in Dublin 22 who is owed €3,000 by Home Payments limited following the company going bankrupt in 2013; and the action the Government is taking to ensure that all of the customers of Home Payments are fully compensated for their losses. [55454/13]
View answerThe Central Bank has informed me that Home Payments Limited was not authorised by the Central Bank of Ireland (‘Central Bank’). At the time Home Payments Limited was in operation, there was no regime in place targeting specifically, the authorisation and supervision of businesses labelled “bill payment”, “debt management” or “debt advice”.
Eamonn Richardson of KPMG and Eamonn Leahy of Leahy & Co were appointed by the High Court as joint liquidators to Home Payments Limited on 24th August 2011. The liquidators took control of the company to secure all assets, records and bank accounts and contacted customers regarding repayment of any funds owed to them by Home Payments Limited. Any constituents who suffered losses through their dealings with Home Payments Limited should contact the liquidators for information on the repayment process.
I, as Minister for Finance have no statutory role in relation to the resolution of the liquidation of this company.
The Government is not in a position to compensate clients of this company for losses incurred due to the liquidation.
The Deputy may be aware that, since the liquidation of that company, a new regulatory regime for debt management firms has been put in place under Section 59 of the Central Bank (Supervision and Enforcement) Act 2013.
A debt management firm is defined as “a person who for remuneration provides debt management services to one or more consumers, other than an excepted person”.
‘Debt management services’ are defined in the legislation as
“(a) giving advice about the discharge of debts (in whole or in part), including advice about budgeting in connection with the discharge of debts,
(b) negotiating with a person’s creditors for the discharge of the person’s debts (in whole or in part), or
(c) any similar activity associated with the discharge of debts.”
Where debt management firms propose to receive client funds and make payments on behalf of clients to their creditors they may require a payment institution authorisation under the European Communities (Payment Services) Regulations 2009 or a money transmission business authorisation under Part V of the Central Bank Act 1997 (as amended) depending on their business model. It is under these regimes that the appropriate protection for client funds is provided for.
114. Deputy Aengus Ó Snodaigh asked the Minister for Finance his plans to force banks and credit card companies, as part of their strategy to reduce credit card fraud and theft, to text cardholders after each transaction, thus making them aware instantly that their card has been used or abused. [55484/13]
View answerI have no plans to require banks and credit card companies to text the card holder after each transaction.
According to the Irish Payment Service Organisation, there are approximately 300 million card transactions each year. Such a proposal would impose significant additional costs on card suppliers. The Deputy may wish to put his proposals to the individual card companies.
115. Deputy Pearse Doherty asked the Minister for Finance the number of contacts, unsolicited and otherwise, that the National Asset Management Agency and its developers have received from former employees regarding the possible acquisition of the developers' properties. [55510/13]
View answerI am advised by NAMA that it does not maintain a register of all individual contacts between former employees and the Agency. Nor would it be feasible to do so, given that there currently are over 330 staff assigned to NAMA and that over 60 staff have left the Agency since its inception. Furthermore, some former staff members would not possess any specific knowledge relating to either debtors or their properties as they were engaged in areas of technical expertise in law, accounting or IT. In any event, NAMA requires that the sale of property is conducted by professionally qualified selling agents on a competitive, open market basis.
116. Deputy Michael McGrath asked the Minister for Finance the total number of staff employed by National Asset Management Agency; the total number of staff that have left the organisation in each year since its inception; and if he will make a statement on the matter. [55522/13]
View answerAll National Asset Management Agency (NAMA) staff are employees of the National Treasury Management Agency (NTMA). Under section 42 of the National Asset Management Agency Act 2009, the NTMA assigns staff to NAMA. 331 staff were assigned to NAMA at end 2013. Numbers of staff assigned to NAMA who have left the organisation are as follows:
2010 3
2011 8
2012 22
2013 29
117. Deputy Michael McGrath asked the Minister for Finance the total amount of taxation raised from motorists in 2011, 2012 and 2013 from mineral oil tax, VRT, VAT, carbon tax and motor tax including driver licensing receipts; and if he will make a statement on the matter. [55523/13]
View answerI am informed by the Revenue Commissioners that the yield from motorists from Mineral Oil Tax, VRT, VAT, Carbon Tax in 2011, 2012 and 2013 is shown in the tables.
|
|
MOT |
Carbon Tax |
VAT (Estimated) |
Total |
|
€m |
€m |
€m |
€m |
|
|
Petrol |
|
|
|
|
|
2011 |
992.6 |
60.1 |
459.0 |
1,511.7 |
|
2012 |
904.1 |
74.6 |
510.7 |
1,489.4 |
|
2013 |
849.5 |
69.6 |
480.0 |
1,399.1 |
|
Auto Diesel |
|
|
|
|
|
2011 |
1,078.3 |
97.5 |
62.0 |
1,237.8 |
|
2012 |
1,071.4 |
130.8 |
73.4 |
1,275.6 |
|
2013 |
1,130.0 |
137.2 |
77.0 |
1,344.2 |
|
VRT |
€m |
VAT on Cars |
€m |
|
|
2011 |
388.4 |
2011 |
282.9 |
|
|
2012 |
379.4 |
2012 |
287.9 |
|
|
2013 |
436.9 |
2013 |
267.3 |
Please note that the VAT receipts are estimated, as the VAT returns do not require the yield from a particular sector or sub-sector of trade to be identified and the actual VAT yield for each category cannot therefore be determined.
Please note that the receipts shown for Mineral Oil Tax, VRT and Carbon Tax for 2013 are provisional and may be subject to revision.
