Written Answers Nos. 222 - 238
222. Deputy Michael McCarthy asked the Tánaiste and Minister for Social Protection the position regarding an appeal for a disability allowance in respect of a person (details supplied) in County Cork; and if she will make a statement on the matter. [2846/15]
View answerThe Social Welfare Appeals Office has advised me that an appeal by the person concerned was registered in that office on 10 November 2014. It is a statutory requirement of the appeals process that the relevant Departmental papers and comments by or on behalf of the Deciding Officer on the grounds of appeal be sought. These papers were received in the Social Welfare Appeals Office on 12 January 2015 and the case will be referred to an Appeals Officer who will make a summary decision on the appeal based on the documentary evidence presented or, if required, hold an oral hearing.
The Social Welfare Appeals Office functions independently of the Minister for Social Protection and of the Department and is responsible for determining appeals against decisions on social welfare entitlements.
225. Deputy Brendan Griffin asked the Minister for Finance his views on an action initiated by the Revenue Commissioners in respect of the pension of a person (details supplied) in County Kerry; and if he will make a statement on the matter. [2317/15]
View answer226. Deputy Brendan Griffin asked the Minister for Finance if his attention has been drawn to the fact that the Revenue Commissioners have initiated action whereby they will take an entire weekly pension and monthly amounts due in respect of a person (details supplied) in County Kerry regarding their household benefits package; and if he will make a statement on the matter. [2544/15]
View answerI propose to take Questions Nos. 225 and 226 together.
I am advised by Revenue that the person in question has a significant tax debt and had declined to positively engage on the issue in spite of being afforded a number of opportunities to do so.
For this reason Revenue was left with no alternative but to start debt collection/enforcement proceedings against the person, which included placing an Attachment Order on his Department of Social Protection (DSP) payment.
However, Revenue has confirmed to me that the person has now engaged on the issue and various alternatives are being actively discussed, which will take account of his personal circumstances.
227. Deputy Brendan Griffin asked the Minister for Finance the reason consumers are required to pay VAT on the public service obligation levy on electricity bills; and if he will make a statement on the matter. [2844/15]
View answerWith regard to the application of VAT on electricity bills supplied by utility companies, in accordance with section 37(1) of the Value-Added Tax Consolidation Act 2010, the amount on which VAT is chargeable is the total consideration receivable by the supplier, "including all taxes, commissions, costs and charges whatsoever", but not including the VAT itself. This reflects EU VAT law, with which Irish tax law must comply. In this regard, Article 78 of the EU VAT Directive provides that the taxable amount shall include "taxes, duties, levies and charges, excluding the VAT itself". In this respect, where the charge for a supply of service, such as an electricity bill, includes the Public Service Obligation (PSO) levy, VAT law dictates that VAT should be calculated on the PSO levy element of the charge as well as the charge for the service. The same situation applies in the case of other excises, including for example excises on petrol, auto-diesel, tobacco and alcohol products.
228. Deputy Frank Feighan asked the Minister for Finance the reason the sale price of a property (details supplied) is not acceptable to the Revenue Commissioners as the valuation for property tax. [2213/15]
View answerI am advised by Revenue that the Finance (Local Property Tax) Act 2012 (as amended) sets out how residential properties are to be valued for LPT purposes.
The Act provides that property valuations must be determined on a specific valuation date and Section 14(1) further provides that where there is a change of ownership between consecutive valuation dates, the chargeable value, as stated on the first valuation date, will continue to apply until the next valuation date.
The first valuation date for LPT was 1 May 2013 and any valuation of a property set on that date is valid until 31 October 2016. The valuation is not affected by any repairs or improvements made to a property or by any general increase or decrease in property prices that might occur during the valuation period.
In regard to property sales, all purchasers of relevant residential properties, as part of the conveyancing process and prior to the completion of a sale, should satisfy themselves as to whether the LPT valuation declared by the vendor on the specific valuation date appears reasonable and honestly made (having obtained all relevant supporting documentation from the vendor). To facilitate this process, the vendor is obliged to provide the purchaser or the purchaser's solicitor with details of the Property ID, the valuation band as declared on the LPT Return and the basis for arriving at that valuation. Any concerns regarding the original valuation should be addressed at this point before ownership of the property is transferred.
Section 35(5) of the Act does however provide for the submission of a revised LPT Return in advance of the next valuation date where specific information or documentation supporting such a change comes to hand, or where the purchaser feels that the original valuation (by the vendor) could not have been reasonably arrived at. Supporting documentation in this regard could include a copy of a professional valuation or documented information on property sales for comparable properties in the local area. The supporting documentation must be relevant to the valuation date (1 May 2013) rather than to current property values.
With regard to the specific case to which the Deputy refers, I am advised that the original owner (the vendor) filed a 2013 LPT return confirming the property in Band 3 (€150,001-€200,000). The purchaser subsequently contacted LPT Branch requesting that she be allowed to pay the 2015 liability in Band 2 (€100,001-€150,000) but did not provide any documentation or evidence supporting the validity of such a reduction. The LPT team explained to the person that she would need to produce appropriate documentary evidence supporting her request for a reduction before Revenue could adjust the Valuation Band. The LPT team also advised the person that any uncertainty about the current valuation should have been addressed with the vendor before the sale of the property was finalised, but that she will have an opportunity to submit a revised valuation for the property on 1 November 2016.
Finally, Revenue has confirmed to me that it will re-examine the issue if the person produces documentation supporting her assertion that the property is more relevant to Band 2 than Band 3 but has no discretion to do so in the absence of such evidence.
229. Deputy Peadar Tóibín asked the Minister for Finance if he will provide in tabular form the annual number of PAYE construction workers and the tax paid by these workers between 2008 and 2014. [2244/15]
View answerI assume that the Deputy is referring to the amount of Income Tax paid in respect of PAYE construction workers. I am informed by the Revenue Commissioners that Income Tax paid in respect of PAYE construction workers, as well as the numbers of employments for such workers, for the period 2008 to 2013, the latest year figures are available for, is shown as follows.
|
Year |
Number of Employments |
PAYE Income Tax and USC €m |
|
2008 |
251,244 |
714 |
|
2009 |
170,739 |
468 |
|
2010 |
132,144 |
289 |
|
2011 |
117,012 |
349 |
|
2012 |
107,992 |
355 |
|
2013 |
110,675 |
367 |
It should be noted that these figures refer to PAYE employments in the construction sector. An individual PAYE employee may have one or more employments in a year. I am informed by the Revenue Commissioners that on the basis of P35 returns received, the number of individual PAYE employees in the construction sector for the same period is shown as follows.
|
Year |
Number of Employees |
|
2008 |
149,938 |
|
2009 |
98,240 |
|
2010 |
77,789 |
|
2011 |
64,513 |
|
2012 |
52,011 |
|
2013 |
64,999 |
230. Deputy Peadar Tóibín asked the Minister for Finance if he will provide in tabular form the annual amount of self-employed PRSI collected from construction subcontractors registered under the relevant contract tax for the years 2008 to 2014. [2245/15]
View answer231. Deputy Peadar Tóibín asked the Minister for Finance if he will provide in tabular form the annual amount of universal social charge collected from construction subcontractors registered under the relevant contract tax for the years 2008 to 2014. [2246/15]
View answer232. Deputy Peadar Tóibín asked the Minister for Finance if he will provide in tabular form the annual number of investigations the Revenue Commissioners have initiated into abuse of the relevant contract tax system between 2008 and 2014; and the number of cases of tax evasion identified in the same period. [2250/15]
View answer235. Deputy Peadar Tóibín asked the Minister for Finance the average turnaround time for the Revenue Commissioners to issue a contract confirmation letter to subcontractors following notification by a principal contractor through the electronic relevant contract tax system of a contract entered into. [2318/15]
View answer236. Deputy Peadar Tóibín asked the Minister for Finance if he will provide in tabular form the number of audit interventions initiated by the Revenue Commissioners into non-resident construction contractors between 2012 and 2014; if these audits have concluded; if on conclusion tax evasion was found to have occurred; and the value of the yield where tax evasion occurred. [2319/15]
View answerI propose to take Questions Nos. 230 to 232, inclusive, and 235 and 236 together.
In relation to Question No. 230 (Ref: 2245/15) and Question No. 231 (Ref: 2246/15), as I previously informed the Deputy in my response to Question No. 202 on 25 November last year, a Subcontractor will not generally describe him/herself as such when first registering for Income Tax with Revenue and this consequently limits the Revenue Commissioners ability to provide precise statistics on the annual amount of PRSI and USC paid in each year.
I am advised that all contractors in the construction sector, engaged under a relevant contract, are also required to register for Relevant Contracts Tax (RCT) some contractors though work outside the RCT system, for example, where there is no sub-contracting of work on a particular job. For those operating under a relevant contract, when registering for RCT, they declare themselves as Principal Contractors, Principal/Subcontractors which means that they can act as a principal on some contracts and a subcontractor on other contracts - or Subcontractors. Therefore, the details provided include all contractors who were registered as a Principal/Subcontractor or as a Subcontractor for any part of the years in question.
Furthermore, the details provided were compiled on the basis of contractors who were registered for RCT, not necessarily on whether they were active in that year within the RCT sector. In addition, for joint assessment cases, given the complexity involved in establishing which spouse is actively engaged in the RCT sector, only data on the assessable spouses PRSI and USC was extracted; therefore in joint assessment cases the non-assessable spouses PRSI and USC has been excluded.
As a result of the foregoing, the data set out in the following table are tentative and represent best estimates. The figures are based on declared PRSI and USC liabilities submitted by self-employed contractors (excluding companies) in their annual tax return and the most recent figures available are for the 2013 tax year.
|
Year |
PRSI |
USC |
|
2008 |
€35,761,693 |
N/A |
|
2009 |
€23,095,095 |
*N/A |
|
2010 |
€18,201,182 |
*N/A |
|
2011 |
€20,542,795 |
€29,429,853 |
|
2012 |
€19,716,784 |
€27,859,142 |
|
2013 |
€20,586,953 |
€28,204,585 |
*Income Levy data not available in the timeframe.
Regarding Question No. 235 (Ref: 2318/15), I am further advised that a Principal contractor has a statutory obligation to notify Revenue through the eRCT system of details of all contracts entered into with a subcontractor. On receipt of these contract details, the Contract Confirmation letter is generated and if the Subcontractor is registered for ROS, they will receive an electronic copy of the letter into their ROS Inbox immediately. In the vast majority of cases, the Subcontractor, or their agent, will be registered for ROS.
For the minority who receive the Contract Confirmation letter in paper form, these are printed and posted twice a week from Revenue's central dispatch centre and therefore the turnaround time is only a matter of days.
When the Subcontractor receives the Contract Confirmation letter, they are obliged to notify Revenue if they believe that they are not a subcontractor of this Principal or indeed if any of the details entered by the Principal were incorrect. This procedure acts as a safeguard for a Subcontractor who has any concerns as to the nature of their relationship with the Principal and the Subcontractor is fully entitled to clarify with the Revenue Commissioners any matters they are unsure about.
Regarding Question No. 232 (Ref: 2250/15), in my reply to Question 216 on 2 December last year I previously provided the Deputy with specific data on tax, interest and penalties recovered by the Revenue Commissioners where they uncovered non-compliance with RCT obligations.
Furthermore, in my reply to Question No. 13 on 3 December last year, I explained to the Deputy that the eRCT system had succeeded in taking away the vulnerabilities for fraud, mainly extraction fraud, based on bogus contractors and bogus documentation that attached to the previous paper-based RCT system. This is a critical feature of the electronic RCT system. The previous paper-based system was exploited by criminal gangs with extraction repayment frauds using bogus deduction cards and bogus sub-contractors to obtain significant fraudulent claims. The electronic RCT system has been designed to remove the opportunity to extract fraudulent claims from the Exchequer.
I also previously informed the Deputy that businesses have a number of tax obligations including obligations relating to tax returns, the payment of tax on the profits of the business, the VAT system, the PAYE system and, where appropriate, the eRCT system. In the course of a Revenue compliance intervention, a Revenue officer may investigate matters pertaining to those obligations and, where necessary, seek the relevant outstanding taxes, interest on late payment of tax and relevant penalties.
The Revenue Commissioners have provided the following information in relation to construction related compliance interventions carried out by them in the period 2008 to 2014, with respect to all taxes and not purely RCT.
|
Year |
Audits |
**Other Risk Management Interventions |
Total |
Total Yield (€) |
|
2008 |
2,928 |
0 |
2,928 |
€121.3m |
|
2009 |
2,537 |
0 |
2,537 |
€99m |
|
2010 |
2,044 |
2,175 |
4,219 |
€68m |
|
2011 |
1,819 |
9,644 |
11,463 |
€59.5m |
|
2012 |
1,291 |
28,373 |
29,664 |
€51.6m |
|
2013 |
1,075 |
51,248 |
52,323 |
€55m |
|
2014 |
889 |
52,359 |
53,248 |
€56.3m |
** The full recording in Revenue's case management system of non-audit interventions and the associated yield began in 2012.
I am further advised that Revenue has always committed a significant resource to monitoring activities in the construction sector and is involved in an ongoing programme of construction related audits, compliance interventions and site visits, directed at large public and private sector contracts, one-off housing and jobs involving repairs, maintenance and enhancements. Revenue's compliance approach is to make the appropriate intervention in a well chosen case. A well chosen case will be identified on the basis of risk, informed by all the information available to Revenue. While the taxpayer's use of the eRCT system will be examined in any compliance intervention, it will be only one of a range of issues to be reviewed.
As regards Question No. 236 (Ref: 2319/15), it is not possible in the timeframe available to provide the Deputy with the information requested for 2008-2013 in relation to non-resident subcontractors. However, the Revenue Commissioners have informed me that in 2014 they carried out 40 audits of non-resident contractors, representing 4.5% of all audits carried out in the construction sector. I am further advised that the Revenue Commissioners will write separately to the Deputy with the relevant details for the years 2008 to 2013.
|
Number of Audits |
Total |
Tax |
Interest |
Penalties |
|
40 |
€2,032,505 |
€1,448,704 |
€223,979 |
€359,822 |
I am also advised that apart from audits, Revenue also conducts more targeted interventions like aspect queries and profile interviews on specific risk areas and compliance activity on non-residents engaged in the construction sector needs to be considered in totality. I am further advised that the Revenue Commissioners will also write separately to the Deputy with the details of non-audit interventions for the years 2008 to 2014.
I am very satisfied that Revenue's policing of the construction sector, which is regarded by the Commissioners as one of the riskiest areas of business activity from a tax compliance perspective, is a high priority for them and will continue to be so as we see a welcome revival in the fortunes of the sector. I am also satisfied that the introduction of the electronic RCT system provides Revenue with significant realtime information with which to target their resources.
However, I note the Deputy's continuing interest in the construction sector and compliance with RCT obligations. In previous replies, I suggested that if the Deputy had any specific information in relation to tax evasion or abuses of the tax system, he should pass that information to my officials who will ensure that it gets to the Revenue Commissioners. I re-state that offer.
233. Deputy Michael Creed asked the Minister for Finance the number of mortgages in substantial arrears; the number of these mortgages that are provided by subprime lenders; his plans to address this cohort of home owners in substantial arrears with their mortgages to subprime lenders; and if he will make a statement on the matter. [2297/15]
View answerThe Central Bank has advised that there is no such regulated category as 'sub-prime' lender but that phrase is sometimes used to refer to some non-deposit taking 'retail credit firms'. Retail credit firms are a regulated category of entities which are authorised to provide credit (in the form of cash loans) directly to individuals. Some firms authorised in this category are mortgage lenders. Retail credit firms have been subject to regulation by the Central Bank since 1 February 2008. A register of all Retail Credit Firms is available on the Central Bank's website.
The Deputy will be aware that latest Central Bank mortgage arrears and restructures statistics were published in December and cover the period to end September 2014. This publication shows that overall arrears and arrears greater than 90 days fell for the fifth and fourth consecutive quarter respectively. There were 760,238 private residential mortgage accounts for principal dwellings held in the State at end-September 2014, with some 84,955 principal dwelling houses in arrears of greater than 90 days, representing a decline in the greater than 90 days arrears category of 6 per cent over the quarter. The Central Bank has advised that, at end-September 2014 non-bank lenders accounted for 5.2 per cent of the total stock of residential mortgage accounts outstanding at end-September 2014 (5.4 per cent in value terms). A total of 18,064 mortgage accounts issued by these lenders were in arrears of more than 90 days at end-September, this figure accounted for 15.5 per cent of total mortgages in arrears over 90 days. In addition, data published by the Department of Finance last week also showed that the number of accounts in mortgage arrears is declining.
The Central Bank has also informed me that the same consumer protection framework applies to retail credit lenders as to other regulated lenders including the Consumer Protection Code and the Code of Conduct on Mortgage Arrears. The CCMA sets out requirements for all mortgage lenders, including retail credit firms, dealing with borrowers in arrears or pre-arrears on a mortgage loan which is secured by their primary residence. It provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender and that long term resolution is sought by lenders with each of their borrowers. The Central Bank has advised that retail credit firms were also included in the scope of the Central Bank's review of the 'Implementation of the Revised CCMA' by mortgage lenders, the purpose of which was to ensure that mortgage lenders achieved full implementation of the requirements of the revised CCMA by end December 2013.
This Government tackled the issue of mortgage arrears head on. We overhauled the systems and structures to support customers in arrears to find solutions. We acknowledged from the outset that, due to the scale of the challenge, resolution for all customers in arrears was likely to take a significant period of time. The mortgage arrears resolution process is working. The number of mortgages in arrears is declining. There is, however, no doubt that the issue of longer terms arrears remains the biggest challenge. Borrowers in difficulty must engage with their lender as early as possible in order to identify the best solution to their debt situation. This will afford them the protection of the Code of Conduct on Mortgage Arrears (CCMA) and ensure that the resolution arrangement that is finally agreed is both affordable and sustainable. Of course, the Central Bank is also working with all mortgage lenders, including retail credit firms, in relation to lenders' mortgage arrears resolution strategies and approaches to dealing with borrowers in or facing arrears. Early and effective engagement between borrowers and lenders is key to resolving cases of mortgage difficulty.
234. Deputy Pearse Doherty asked the Minister for Finance his plans to facilitate a return of credit union services to the people of Newbridge, County Kildare; and his plans to use part of the building for these services. [2298/15]
View answerWhile the Government is absolutely determined to support a strengthened and growing credit union movement and has highlighted its support for the return of credit union services to Newbridge, my role as Minister for Finance is to ensure the legal framework for credit unions is appropriate for the effective operation and supervision of credit unions. In line with the Credit Union Act, 1997 (as amended) the registration of a new credit union and the extension of a common bond of an existing credit union is the responsibility of the Registry of Credit Unions at the Central Bank.
I have been informed by the Central Bank that as previously confirmed it is open to meeting any party interested in restoring credit union services to the Newbridge area. The Central Bank has received a proposal from a credit union to extend an existing common bond and they are currently considering this proposal. The Central Bank has further informed me that, to date they have not received any formal proposals from any local group in relation to the establishment of a new credit union, but have stated that they will consider any proposal received.
Separately, Mr Jim Luby of McStay Luby was appointed as liquidator of Newbridge Credit Union Limited (in liquidation) by the High Court on 16 December 2013, and this liquidation process is on-going. The liquidator has now signed contracts with the Office of Public Works to purchase NCU's former premises, with the sale expected to complete in Q1 2015.
In accordance with Section 46(6) of the Central Bank and Credit Institutions (Resolution) Act 2011, the sale proceeds generated (net of expenses) will be paid by NCU into the Credit Institutions Resolution Fund in due course. Under that Act, the Credit Institutions Resolution Fund is the principal creditor of NCU in the amount of the financial incentive paid or payable to permanent tsb.
237. Deputy Jack Wall asked the Minister for Finance if a person (details supplied) in County Kildare has received all tax allowances for a married couple since 17 March 2013; and if he will make a statement on the matter. [2417/15]
View answerI have been advised by the Revenue Commissioners that their records indicate that the person concerned was married in 2009 and that he has been treated as a married person for tax purposes since then.
The Revenue Commissioners will write to the person concerned to clarify the position.
238. Deputy Lucinda Creighton asked the Minister for Finance further to Parliamentary Question No. 205 of 16 December 2014, the number of meetings between the Minister or Minister of State and the MAC for years 2011 and 2012; and if he will make a statement on the matter. [2454/15]
View answerIn response to the Deputy's question and further to my response to Parliamentary Question No. 205 of 16 December 2014, as part of the day to day operation of the Department I meet with Senior Officials on a collective and individual basis. Such regular and ongoing meetings and discussions with my senior officials on a daily, weekly and monthly basis is an integral part of the operation of the Department.
A tally is not kept of the number of such meetings on a daily, weekly, monthly or annual basis.
