Written Answers Nos. 50-59
50. Deputy Róisín Shortall asked the Minister for Finance if he will arrange for the Revenue Commissioners to contact a person (details supplied) in Dublin 11 to arrange payment of their local property tax through a payment service provider or single debit authority. [9809/14]
View answerI am advised by Revenue that information on all aspects of Local Property Tax (LPT), including details of the various payment options is available on its website at www.revenue.ie. Revenue also confirmed to me that it continues to provide a dedicated LPT Helpline at 1890 200 255 to assist people in meeting their filing and payment obligations and to provide any other information or assistance that might be required.
In regard to the specific case referred to by the Deputy, I am advised that the person in question selected approved payment service provider as her preferred 2014 payment option in December 2013. Notwithstanding this, a member of the LPT team made direct contact with her and discussed the range of alternative options available to her if she wished to change from her stated choice. Having considered the other payment options the person confirmed that she is now satisfied to remain with her original selection. She committed to pay the 2014 amount due in the coming days. The LPT agent also arranged to reissue the person s Property ID and PI number to her as she has mislaid the original notification.
51. Deputy Mattie McGrath asked the Minister for Finance the reason he has never raised at European level the consistent calls from the farm contractors of Ireland's for a invoice system for farm-agriculture contract work in an effort to combat the so-called black economy; and if he will make a statement on the matter. [9812/14]
View answerAs I explained to Deputy McGrath on 16 January last in response to Parliamentary Questions Nos. 14 and 16, I am informed by the Revenue Commissioners that farmers and agricultural contractors are subject to the same requirements in relation to record keeping as are other businesses. All businesses are required to keep proper books and records and to retain such books and records for a period of six years. In particular, any farming or other business that claims a tax deductible expense for any expenditure must have a satisfactory record of that expenditure.
As I outlined previously, I am conscious that the need to tackle the shadow economy is balanced against imposing additional administrative burdens and costs on business. New measures to improve tax compliance are always considered and it is important that any new measures are proportionate. I am of the opinion that the introduction of a new system of receipts to tackle the shadow economy in the agricultural contractor sector is not a matter for the EU and, as I further explained on 16 January last, I will respond positively where Revenue makes a persuasive case for further powers or new obligations on businesses that will strengthen their hand in dealing with shadow economy activity.
I have previously advised farm contractors that if they have specific details of non-compliance or tax evasion, these should be passed to Revenue where they will be fully investigated. Contact details for a specific individual in Revenue with responsibility for this area were supplied. In this context, I would ask the Deputy to encourage anyone or any representative body that has information on non-compliance or tax evasion to pass this information on to the Revenue Commissioners.
52. Deputy Eric Byrne asked the Minister for Finance if he will clarify a situation regarding Bank of Scotland (Ireland) and its loan book, customers of this bank have been informed that the Bank of Scotland (Ireland) have sold off a portion of its loan book to an American Company, Apollo, in view of this fact the protection that will be afforded to Bank of Scotland (Ireland) mortgage holders here from the Central Bank of Ireland; and if he will make a statement on the matter. [9820/14]
View answerIn December 2013, Lloyds Banking Group sold its Irish residential portfolio of 2,000 mortgages to Apollo Global Management. Apollo Global Management met the Central Bank and the Department and indicated clearly that it intended to voluntarily adopt the Code of Conduct on Mortgage Arrears (CCMA) to manage the acquired loans. Apollo Global Management believes following CCMA is in the best interests of both and forms part of its core strategy.
A number of the purchasers of mortgage loan books are abiding by the Central Bank Code of Conduct on Mortgage Arrears on a voluntary basis. I accept that this is not the same as the consumer having the right to the free service provided by the Financial Services Ombudsman; such a consumer would have recourse to the Courts in the usual manner. However, voluntary adherence to the Code seems to be in the interests of both the consumer and the purchasing entity.
53. Deputy Seán Ó Fearghaíl asked the Minister for Finance if he will give consideration to the issues raised in correspondence (details supplied); if the VAT rebate which is due will be issued by the Revenue Commissioners; and if he will make a statement on the matter. [9855/14]
View answerI have been advised by the Revenue Commissioners that the company in question made a VAT repayment claim for €17,034 in respect of the period November/December 2013 on the 8th January 2014. A Revenue officer from the Kildare District contacted the Director of the company on the 10 January 2014 with a view to seeking documentation (including a purchase listing) in support of this VAT repayment claim.
Subsequent to this request for supporting documentation an amended VAT return was filed on ROS on the 14 January 2014 revising the refund claim down from €17,034 to €9,562. A number of contacts took place between the Revenue officer and the Director of the company between 10 January 2014 and 15 February 2014 seeking clarification of the circumstances giving rise to this amendment. Based on content of the Director s email of the 15th February 2014, the Revenue officer is now satisfied with the background giving rise to the amended claim.
However, the Revenue officer is still awaiting the purchase listing for the period. This was first requested in a telephone conversation with the Director of the company on the 10 January 2014 and again on 21 February 2014. It is important that this listing is now submitted as it is not possible to validate the amounts claimed until it is received and examined by Revenue. Until this purchase listing is received the VAT repayment cannot be made.
54. Deputy Michael Healy-Rae asked the Minister for Finance if he will consider measures such as the extension of EIIS to nursing homes or the application of a zero or very low rate VAT to nursing home construction expenditures. [9863/14]
View answerI am advised by the Revenue Commissioners that there were various schemes of accelerated capital allowances in operation from the late 1990's until 2010 and 2011 in relation to expenditure incurred on the construction of registered nursing homes, convalescent homes and certain residential units associated with registered nursing homes. The allowances were claimed at the rate of 15% per annum over 7 years (10% in the final year). It is likely, therefore that some of these allowances are still being claimed in respect of pre 2011 expenditure. At the present time, expenditure on the construction of these types of buildings does not qualify for any capital allowance.
The Employment and Investment Incentive (EII) is provided for in Part 16 of the Taxes Consolidation Act 1997. Income tax relief is given to individuals investing up to a maximum of €150,000 per annum through the purchase of shares in qualifying small and medium sized trading companies. The relief is restricted to investments which are used by the company for the purposes of carrying on relevant trading activities. The limitation of the relief to trading activity excludes the application of the relief to capital investment such as the acquisition or construction of nursing homes. Additionally the definition of "relevant trading activities" in the legislation specifically excludes "operating or managing nursing homes".
Services consisting of the development of non-residential immovable goods are, in general, liable to VAT at the reduced rate, currently 13.5%, in accordance with paragraph 15 of Schedule 3 of the Value-Added Tax Consolidation Act 2010. The Deputy suggests that a lower rate of VAT be applied to a sub-set of non-residential development, namely, construction of nursing homes. The VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. A change in VAT rates must be in compliance with the EU VAT Directive. The European Court of Justice (CJEU), which is the final arbiter on VAT matters, has ruled in a number of cases, most recently in the Bridport & West Dorset Golf Club Limited case (C-495/12), that the application of VAT must be uniform across all categories of recipients of services. Therefore, it is not possible to provide for a lower rate of VAT on construction services for a specific category of recipient only, such as, the nursing home sector.
55. Deputy Michael McGrath asked the Minister for Finance the total number of both buy-to-let and residential mortgages that have been sold to unregulated entities since 2010; the institutions who sold and to whom they were sold; the current rate of arrears on these mortgages; and if he will make a statement on the matter. [9875/14]
View answerThe Central Bank has informed me that it cannot comment on commercial decisions of lenders or on the agreements entered into by regulated firms and it does not have data on the total number of both buy to let and residential mortgages that have been sold to unregulated entities since 2010 or the rate of arrears on these mortgages. However, information from company announcements in the public domain would suggest that some 5,500 residential mortgages in total have been sold in 2012/2013. As the Deputy is aware, by virtue of an exemption in Part V of the Central Bank Act 1997, an unregulated entity to whom a cash loan is transferred by a regulated entity is not subject to Central Bank supervision.
The Central Bank expressed its concerns that the consumer protections available to mortgage holders under the statutory Codes could be impacted by the sale of mortgage books to unregulated firms. My Department is working closely with the Central Bank on the issue. The Central Bank has also communicated to firms its preference that the outcome of any sale of mortgage books by regulated entities would ensure continuity of borrower protections under Codes and also that the purchaser would have relevant policies and procedures, systems and control checks to appropriately manage a mortgage loan book.
56. Deputy Michael McGrath asked the Minister for Finance the level of interaction the Central Bank of Ireland has had with unregulated institutions who have purchased mortgage loans since the date of purchase; and if he will make a statement on the matter. [9876/14]
View answerThe Central Bank of Ireland has informed me that by virtue of an exemption in Part V of the Central Bank Act 1997, an unregulated entity to whom a cash loan is transferred by a regulated entity is not subject to Central Bank supervision. The Central Bank has expressed its concern that the consumer protections available to mortgage holders under the statutory Codes could be impacted by the sale of mortgage books to unregulated firms and my Department is working closely with the Central Bank on the issue. The Central Bank has also communicated to firms its preference that the outcome of any sale of mortgage books by regulated entities would ensure continuity of borrower protections under Codes and also that the purchaser would have relevant policies and procedures, systems and control checks to appropriately manage a mortgage loan book. The Central Bank has met a number of firms which have expressed interest in purchasing loan books in Ireland and specified its preference that such firms voluntarily comply with the Code of Conduct on Mortgage Arrears.
A number of the purchasers of mortgage loan books are abiding by the Central Bank Code of Conduct on Mortgage Arrears on a voluntary basis. I accept that this is not the same as the consumer having the right to the free service provided by the Financial Services Ombudsman; such a consumer would have recourse to the Courts in the usual manner. However, voluntary adherence to the Code seems to be in the interests of both the consumer and the purchasing entity.
57. Deputy Michael McGrath asked the Minister for Finance the relevant legislation which covers the regulation of the insurance sector and the rights of consumers in respect of insurance policies; and if he will make a statement on the matter. [9877/14]
View answerThe insurance sector is regulated by the Central Bank of Ireland under the Central Bank Act 1942 and the treatment of consumers of insurance products is governed by the Consumer Protection Code 2012. The Central Bank of Ireland has additional responsibilities in relation to Branch establishments of European Economic Area (EEA), authorised Life/Non-Life Insurance undertakings; EEA authorised Life/Non-Life Insurance undertakings conducting business by way of services and third country branch establishments. The Central Bank's Consumer Protection Code is issued pursuant to powers under the following legislation: Section 117 of the Central Bank Act 1989; Section 23 and Section 37 of the Investment Intermediaries Act 1995; Section 8H of the Consumer Credit Act 1995; and section 61 of the Insurance Act 1989. The Central Bank has the power to administer sanctions for a contravention of this Code, under Part IIIC of the Central Bank Act 1942.
58. Deputy Michael McGrath asked the Minister for Finance the number of persons who have been approved for the home renovation incentive since its inception; and if he will make a statement on the matter. [9894/14]
View answerAs the Deputy will be aware, I announced the Home Renovation Incentive in the recent Budget. This scheme came into operation on 25 October 2013 and will run until 31 December 2015. It provides for tax relief for home owners by way of a tax credit at 13.5% of qualifying expenditure incurred on repair, renovation or improvement work carried out on a principal private residence.
Qualifying expenditure is expenditure subject to the 13.5% VAT rate. The work must cost a minimum of €5,000 (inclusive of VAT). Where the cost of the work exceeds €30,000 (exclusive of VAT) a maximum credit of €4,050 will apply. The credit is payable over the two years following the year in which the work is carried out. The scheme will be administered through Revenue s online systems. Contractors will be required to inform Revenue in advance of details of works to be carried out and will also be required to notify Revenue in relation to any payments received in respect of the works. Home owners will be able to view the information provided to Revenue by the contractor through the Revenue electronic systems and will also claim the relief through those systems. It is anticipated that this system will 'go live' in early April 2014. Contractors will need to enter the details of works carried out within 28 of the electronic system becoming available. Until the system is live and details of works carried out are entered, there are no figures available on the incentive.
Full details of the scheme are available on the Revenue website at http://www.revenue.ie/en/tax/it/reliefs/hri/index.html along with a newly produced Guide for Homeowners. Copies of the Guide are being distributed to all local Revenue Offices and Citizens Advice centres.
59. Deputy Michael McGrath asked the Minister for Finance the number of persons who have been approved for the start your own business relief since its inception; and if he will make a statement on the matter. [9895/14]
View answerAs the Deputy is aware, I announced the Start Your Own Business initiative, which provides an exemption from Income Tax for individuals who have been unemployed for a period of 12 months and who start a new, un-incorporated business between 25 October 2013 and 31 December 2016. An exemption from Income Tax will be provided on profits up to a maximum of €40,000 per annum for the first two years of trading. However, USC and PRSI will continue to be payable. If a loss is incurred then loss relief will be available in the normal manner. The business must be un-incorporated i.e., it must not be registered as a company. In order to claim this relief, the individual must file a tax return notwithstanding that there may be no liability to tax. This initiative is an employment activation measure that provides a much-needed incentive for people to start their own business and to reduce their dependence on welfare payments. There is no requirement for an individual to register in order to claim the relief. Instead, the individual will claim the relief by completing the relevant boxes in his or her annual income tax return. Therefore, until the individuals who avail of this relief file their tax returns for the 2014 tax year next year, it will not be possible to know how many individuals are availing of this relief. Full details of the initiative can be found on the Revenue website at: http://www.revenue.ie/en/tax/it/reliefs/own-business-scheme/index.html.
