Dáil Éireann Debate, Wednesday - 9 July 2014
66. Deputy Kevin Humphreys asked the Minister for Finance with respect to the June 2014 target and outturn for corporation tax receipts to the Exchequer, the reason for the €297 million shortfall; and if he will make a statement on the matter. [30215/14]
View answerAs the Deputy may be aware, the impact of SEPA on direct debits was most noticeable in the opening months of the year, with VAT and Income Tax particularly affected. While the vast majority of SEPA related delays have unwound, there will still be some residual impacts over the rest of the year and in future years where a shortage of banking days could be an issue.
By way of background, when an initial payment is made via direct debit, it takes up to seven working days from the bank being notified of the direct debit to payment being made (this was previously two days). For subsequent direct debits, this is reduced to four days.
The end-June 2014 Exchequer returns showed that Corporation Tax (CT) receipts for the month of June were €297 million (27.7%) below profile. However, this was primarily due to SEPA with €285 million estimated to have been delayed from June into July.
The SEPA effect occurred as many companies were making the first CT payment via direct debit, and therefore it took seven working days to process these payments rather the previous two days. However, it should be noted that as expected, over €285 million in CT receipts was received in the first working days of July 2014.
