Joan Collins
Question:17. Deputy Joan Collins asked the Minister for Finance his plans to abolish relevant contract tax in relation to private building contracts, particularly on Government funded projects. [39262/14]
View answerWednesday, 5 November 2014
Questions (17)
Written answers
It is not the function of the Tax Code or the Oireachtas to determine the employment relationship between parties. If the true relationship between parties is that of an employer/employee then the employer is required, under the Tax Code, to operate PAYE on payments made to the employee. If, however, the true relationship is not that of an employer/employee then, where the relationship relates to construction operations, as defined within the Tax Code, there is a requirement to operate the relevant RCT provisions. These provisions were placed on an electronic platform with effect from 1 January 2012. I am informed by the Revenue Commissioners that the eRCT system is working efficiently and that it has removed substantially the vulnerabilities for fraud, mainly from bogus documentation, that attached to the previous paper based relevant contracts tax system. It is not proposed to abolish Relevant Contracts Tax.
I wish to advise the Deputy that the 'Code of Practice for Determining Employment or Self-Employment Status of Individuals', which is available of my Department's website, was created to assist both parties to an engagement including an engagement in the construction sector - in determining if a contract of engagement is, by its nature, either a 'contract of service' (that is, an employer and employee arrangement) or a 'contract for service' (that is, not an employer and employee arrangement). The Code of Practice for Determining Employment or Self-Employment Status of Individuals' is not a Revenue Code but rather was compiled with the assistance of the Irish Congress of Trade Unions / Department of Jobs, Enterprise and Innovation / National Employment Rights Authority / Department of Social Protection / Department of Finance / Small Firms Association / Irish Business and Employers Confederation / Construction Industry Federation / Revenue Commissioners.
I am further informed by the Revenue Commissioners that they are committed to tackling all forms of shadow economy activity including that which is described as 'bogus self-employment status'. Their staff carry-out visits to a wide range of businesses, including temporary places of business such as building sites, as part of their on-going compliance operations. In some instances, such visits are undertaken jointly with other State agencies such as the Department of Social Protection and the National Employment Rights Authority.