I have not seen any evidence of a negative impact on Exchequer returns and a change to self-employment in the construction sector and I cannot, therefore, accept the Deputy's assertion in that regard. I assume that the Deputy's reference to ensuring that RCT is "not used in a manner to deny workers in the sector basic rights" relates to the RCT system which is a tax deduction at source system that applies to payments made under a relevant contract in the construction, meat-processing and forestry sectors. As with any contract of engagement in the construction sector, whether a person is engaged under either a contract of service and is, therefore, an employee; or a contract for service and is, therefore, a self-employed person, is determined by the facts and evidence of each case and not by the RCT system of tax deduction. Guidance on whether a person is engaged as an employee or as a self-employed contractor is provided in the code of practice for determining employment or self-employment status of individuals, which was prepared jointly by the Irish Congress of Trade Unions, business representative bodies and relevant State agencies.
Both the electronic RCT, eRCT, system and the PAYE system of tax deduction at source are underpinned by tax legislation and not by employment legislation.
Neither such system determines whether a person in the construction sector, or, indeed, in any other sector, is engaged as an employee or as a self-employed contractor. On that basis, it is incorrect to attempt to link the RCT system of tax deduction with any denial of workers' statutory employment entitlements, such as rates of pay, holidays, holiday pay or sick leave.
As I have outlined in my responses to previous parliamentary questions in regard to the operation of the RCT system, monitoring of the construction sector for abuses of the tax and duty systems forms part of the Revenue Commissioners' ongoing compliance programmes. The Revenue Commissioners commit significant resources to compliance interventions in the construction sector. There were more than 15,000 tax compliance risk interventions in the sector in 2013 and nearly 17,000 such interventions in 2014. In addition, the Revenue Commissioners work closely with the Department of Social Protection and the National Employment Rights Agency, including by conducting joint operations in the construction sector.
Additional information not given on the floor of the House
If the Deputy has specific information relating to individuals or business groups in any sector who are involved in tax evasion, she should send that to the Revenue Commissioners, which has provided a tailored template on its website to facilitate reporting of tax evasion. The relevant links are provided for the Deputy's information:
http://www.revenue.ie/en/business/shadow-economy/index.html
https://www.ros.ie/online-enquiry-web/goodCitizen
