Tuesday, 10 Nov 2015

Written Answers Nos. 190-199

Tax Credits

Questions (190)

Patrick O'Donovan

Question:

190. Deputy Patrick O'Donovan asked the Minister for Finance the cost of indexing tax credits and bands to wages in the period 2017 to 2021; and if he will make a statement on the matter. [39454/15]

Written answers

Minister for Finance

I am advised by the Revenue Commissioners that the Post-Budget 2016 Ready Reckoner available on the Revenue Statistics webpage at http://www.revenue.ie/en/about/statistics/ready-reckoner.pdf shows a wide range of information, including an indicative cost of indexation at 1% in respect of various bands, rates, credits, exemption limits and the Universal Social Charge. The 1% indexation estimates, on page 9 of the Reckoner, may be used on a pro-rata or straight-line basis to cost other levels of indexation.

I am further advised by the Commissioners that Revenue has no basis to predict the level of wage inflation over the period 2017 to 2021, and therefore is not in a position to cost a related indexation of tax credits and bands.

The relevant costs included in the Ready Reckoner are based on 2016 estimates from the Revenue tax forecasting model using actual data for the year 2013, adjusted as necessary for income, self-employment and employment trends in the interim. They are provisional and may be revised.

Construction Contracts

Questions (191)

Joan Collins

Question:

191. Deputy Joan Collins asked the Minister for Finance the number of workers registered with the Revenue Commissioners as self-employed for the purposes of electronic relevant contracts tax within the construction industry; the number of workers who are employed on a P60 basis within that sector; and his views on the loss to the State of employer's PRSI payments and whether this money can be considered as akin to a family income supplement for the rich rather than as a contribution to rebuilding the country (details supplied). [39514/15]

Written answers

Minister for Finance

I am informed by the Revenue Commissioners that, as with any contract of engagement between two parties in the construction sector or in any other sector, whether a person is engaged either

1. under a contract of service (that is, engaged as an employee and who pays tax under the PAYE system of tax deduction at source); or

2. under a contract for service [that is, as a self-employed contractor and who pays tax under the self-assessment system with a credit granted for tax paid by deduction at source under electronic Relevant Contracts Tax (eRCT) system],

is determined by the facts and evidence of each case and guidance on that matter is provided in the Code of Practice for Determining Employment or Self-Employment Status of Individuals was prepared jointly by the Irish Congress of Trade Unions, business representative bodies and relevant State agencies.  

The electronic Relevant Contracts Tax system applies to payments made to a sub-contractor by a principal contractor in the construction, meat processing and forestry sectors.  As regards the construction sector, I am informed by Revenue that there are 99,741 sub-contractors currently registered under the eRCT system, of which 23,202 are sole traders and the balance being companies or partnerships.

As to the Deputy's request for "the number of workers that are employed in a P60 basis within that sector", I am taking this to be an enquiry as to the number of employees in the construction sector.  I am informed by Revenue, based on employer end of year PAYE returns for 2014, that there were 75,386 individuals employed in construction related businesses.  

As to the alleged loss of employer PRSI to the Exchequer because of employers' behaviour, the construction sector is an acknowledged area of high risk from a tax compliance standpoint.  I am informed by Revenue that monitoring of the sector for abuses of the tax and duty systems forms part of its on-going compliance programmes and to which they commit significant resources.  In line with the welcome growth in activity in the sector, Revenue currently has an extensive dedicated focus on construction to target the various tax compliance risks associated with the sector.

As I have outlined in my responses to several previous Parliamentary Questions, if the Deputy has specific information relating to individuals or businesses in any sector who are involved in tax evasion, she may pass that information to my officials who will ensure that it sent to Revenue for investigation.  As an alternative, the information may be passed directly to Revenue who have provided a facility, on their website, to report tax evasion.  A link to the template is set out below:   

[Link: http://www.revenue.ie/en/business/shadow-economy/index.html and

https://www.ros.ie/online-enquiry-web/goodCitizen

Question No. 192 answered with Question No. 177.

Protected Disclosures in the Public Interest

Questions (193)

Clare Daly

Question:

193. Deputy Clare Daly asked the Minister for Finance further to Parliamentary Question No. 331 of 3 November 2015, regarding a case (details supplied), if he has been informed of the case and the wrongdoing involved; the specific actions or measures that he, in his capacity of having oversight of the Central Bank of Ireland, has taken to protect the whistleblower and ensure that this kind of wrongdoing ceases; and if he will make a statement on the matter. [39523/15]

Written answers

Minister for Finance

I, in my capacity as Minister for Finance, have no role in relation to the case to which the Deputy refers.  The Central Bank of Ireland's obligations in relation to protected disclosures are set out in the relevant legislation and under that legislation, the Central Bank does not report to the Minister for Finance on these matters. 

As required under section 22 of the Protected Disclosures Act 2014, the Central Bank published its 2015 Report on Protected Disclosures.  This Report stated the Central Bank had received one such protected disclosure in between 1 July 2014 and 30th June 2015. The report notes that "matters reported under the disclosure were investigated thoroughly by an independent party in line with Central Bank policy." 

Protections for those making a protected disclosure are provided for in Part 3 of the Protected Disclosures Act 2014.  I received correspondence in relation to this protected disclosure and I understand that the appropriate authorities are involved. 

Protected Disclosures in the Public Interest

Questions (194)

Clare Daly

Question:

194. Deputy Clare Daly asked the Minister for Finance if he will clarify the nature of the one case of protected disclosure which the Central Bank of Ireland reported it had received during the period 1 July 2014 to 30 June 2015. [39524/15]

Written answers

Minister for Finance

On 30 June 2015 the Central Bank published a report on its website relating to the number of protected disclosures made to it and action taken in response for the period between 1 July 2014 and 30 June 2015. This is in line with the duties of public bodies under Section 22 of the Protected Disclosures Act 2014.

That report noted the Central Bank had received one protected disclosure in the relevant time period, which was investigated thoroughly by an independent party, with the outcome communicated to the persons concerned.

It would not be appropriate for me to clarify the nature of the protected disclosure in question, particularly given section 22 requires that the report does not enable the identification of the persons involved.

Protected Disclosures in the Public Interest

Questions (195)

Clare Daly

Question:

195. Deputy Clare Daly asked the Minister for Finance further to Parliamentary Question No. 331 of 3 November 2015, his views on the allegations made under protected disclosure that auditors are, or have been, requested to delete significant findings from an internal audit report on the governance of the Central Bank of Ireland; his further views that these are serious concerns, and raise further concerns on the transparency and accountability of the Central Bank of Ireland; and if he will make a statement on the matter. [39525/15]

Written answers

Minister for Finance

Under Section 21 of the Protected Disclosures Act 2014, all public bodies must establish and maintain procedures for the making of protected disclosures by workers who are or were employed by the public body and for dealing with such disclosures. The Central Bank of Ireland is one such public body, and its internal procedures in this area contribute towards its good governance and accountability. 

In relation to the matter of transparency, section 22 of the Protected Disclosures Act requires the Bank to publish a report on the protected disclosures made and any action taken in response, which does not enable the identification of the persons involved.  I view this requirement as striking a balance between transparency and the protection of those making a protected disclosure.

In relation to the case raised by the Deputy, the Central Bank published such a report on its website, which stated the Central Bank had received one such protected disclosure in between 1 July 2014 and the publication date. The report notes that "matters reported under the disclosure were investigated thoroughly by an independent party in line with Central Bank policy."  Given this issue was considered by both the Central Bank and an independent party, I am satisfied that the matter has been thoroughly investigated.

Disabled Drivers and Passengers Scheme

Questions (196)

John McGuinness

Question:

196. Deputy John McGuinness asked the Minister for Finance if the refund of excise on petrol and diesel due to a person (details supplied) in County Kilkenny has been made in full; the consultation that took place with stakeholders regarding the change in payment times; if such payments will be made to a post office or to a credit union account; and if he will make a statement on the matter. [39566/15]

Written answers

Minister for Finance

From 1969 to 2014, the Disabled Drivers and Disabled Passengers (Tax Concessions) Scheme provided for the repayment of excise duty on fuel used by beneficiaries of the Scheme. Following a judgement of the Court of Justice of the European Union of April 2013, the repayment of excise element of the Scheme was found to be incompatible with the Energy Tax Directive. Following negotiations with the European Commission it was agreed that the repayment of excise duty should be discontinued as of 31 December 2014.

As a result of this, the Revenue Commissioners did not have the necessary legal authority to make repayments in respect of fuel used on and after 1 January 2015. Accordingly, if a beneficiary of the Scheme made a twelve month claim which started in 2014 and concluded in 2015, the portion of the claim in respect of 2014 was repaid.

As I stated in March 2014, to ensure that no beneficiary of the Scheme lost out as a result of the Court's ruling, I decided to introduce a new fuel grant effective from 1 January 2015. This fuel grant will maintain the current practice of paying the sum 12 months in arrears, so that my Department shall make the first payments of the fuel grant from 1 January 2016 in respect of all fuel used during 2015.

The Fuel Grant will be paid at the same rate as the rates for repayment of excise duty on fuel. Accordingly, the rate for petrol will remain at €0.59 per litre, the rate for diesel will remain at €0.48 per litre, and the rate for liquefied petroleum gas will remain at €0.10 per litres.

My officials and officials from the Office of the Revenue Commissioners have been preparing the necessary administrative and legislative measures to ensure the fuel grant is paid from 1 January 2016. With the assistance of the Revenue Commissioners, a number of improvements have been made to the administration of the Scheme. Beneficiaries will now be able to apply for the fuel grant online on the Revenue website through the 'my Account' feature. Revenue will process the applications for my Department, and my Department shall make the payment directly to the beneficiaries bank or credit union account.

My Department cannot make payments by cheque. Accordingly, payments must be made to an account at a financial institution through the Single Euro Payments Area (SEPA) mechanism. I understand that many credit union accounts are capable of taking SEPA payments.

On 14 October 2015, my Department wrote to beneficiaries of the Scheme informing them of the changes to the fuel grant, and informing them that they can log on to the 'my Account' feature of the Revenue website from 1 January 2016 and claim the grant. My Department also informed beneficiaries that they may continue to receive the grant using a paper form if required. 

Officials from my Department and officials from the Office of the Revenue Commissioners are in regular contact with the Irish Wheelchair Association and the Disabled Drivers Association, who represent many of the beneficiaries of the Scheme. Both organisations have been kept informed of developments as regards the fuel grant, including the necessity to make payments from 1 January 2016 with respect to all fuel used during 2015.

I have made provision in sections 77, 78, 79, and 80 of the Finance Bill 2015 (as published) to provide the necessary legislative underpinning for the fuel grant. Following the enactment of the Finance Bill 2015, I shall made regulations providing for the payment of the fuel grant.

I have been advised by the Revenue Commissioners that on 23 July 2015, a repayment claim was received by the Revenue Commissioners from the person (details supplied). This claim was in respect of diesel covering the period 22 July 2014 to 21 July 2015. A repayment was made on 4 August 2015 in respect of the fuel used up to 31 December 2014. The balance due can be included in the person's claim under the new Fuel Grant scheme  for the period from 1 January to 31 December 2015.

Tax Reliefs Eligibility

Questions (197)

Patrick O'Donovan

Question:

197. Deputy Patrick O'Donovan asked the Minister for Finance his proposals for tax relief for farmers who bought milk quotas prior to 2000, or single payments between 2005 and 2013; the workings of this relief relating to capital gains tax; and if he will make a statement on the matter. [39572/15]

Written answers

Minister for Finance

I am advised by the Revenue Commissioners that a claim for capital gains tax relief may arise under section 538 of the Taxes Consolidation Act 1997 in respect of losses incurred by the owners of milk quotas as a result of the abolition of those milk quotas earlier this year where those milk quotas were purchased by the persons concerned. The allowable loss is the capital loss equivalent to the amount incurred by the person when the milk quota was acquired. However, the amount of the loss allowable is restricted to the extent that it has been covered by the amount of capital allowances or renewals allowances granted for income tax purposes. This restriction applies to quotas which were purchased on or after 1 April 2000. 

As regards Single Farm Payment entitlements that were purchased between 2005 and 2013, a claim for capital gains tax relief may also arise under section 538 of the Taxes Consolidation Act 1997 in respect of the abolition of such entitlements. As in the case of milk quotas referred to above, the allowable loss is the capital loss equivalent to the amount incurred when the Single Farm Payment entitlements were acquired.

Claims for relief under section 538 of the Taxes Consolidation Act 1997 should be made to the Revenue District dealing with the tax affairs of the person concerned.

Tax Code

Questions (198)

Michael Healy-Rae

Question:

198. Deputy Michael Healy-Rae asked the Minister for Finance his plans to introduce tax saver schemes for persons (details supplied) who have no access to public transport to travel to work; and if he will make a statement on the matter. [39575/15]

Written answers

Minister for Finance

The purpose of the Travel Pass / Taxsaver scheme, introduced originally in Finance Act 1999, is to encourage greater use of public transport by providing an exemption from BIK (Benefit-In-Kind taxation) for employer-provided  travel passes. It is not intended simply as a  tax relief for travelling to and from work which would seem to be what the Deputy is requesting. I have no plans to introduce such a scheme.

I would also draw the Deputy's attention to the Cycle To Work scheme, which can provide a practical alternative to the use of a car in circumstances where the distances travelled are relatively short.

Universal Social Charge Application

Questions (199)

Robert Troy

Question:

199. Deputy Robert Troy asked the Minister for Finance his plans to cut the universal social charge for retired pensioners. [39605/15]

Written answers

Minister for Finance

I announced a number of changes to the Universal Social Charge (USC) in my recent Budget speech which will apply to all income liable to the USC, including occupational pension income of retired pensioners. From the 1st of January next, the entry threshold to USC is being increased from €12,012 to €13,000, removing over 40,000 individuals from the scope of the charge entirely. It is estimated that over 700,000 income earners will not be liable to USC at all from next year.

The three lowest rates of USC are being reduced from 1 January 2016.

- The 1.5 per cent rate is being reduced to 1 per cent. This applies on the first €12,012 of income;

- The 3.5 per cent rate is being reduced to 3 per cent. This applies on income in excess of €12,012 up to an increased threshold of €18,668.

- The 7 per cent rate is being reduced to 5.5 per cent. This applies on income in excess of €18,668 up to €70,044.

The exemption from the top rates of USC for all medical card holders and those over-70 earning less than €60,000 is being retained. This group will also benefit from the reductions in the two lowest USC rates.

These changes will see all those who pay USC in 2015, including retired pensioners, seeing a reduction in their USC bill next year where incomes are equal. I intend to continue to reform the tax system in future budgets, subject to having the required fiscal space.