Written Answers Nos. 86-105
86. Deputy Billy Kelleher asked the Tánaiste and Minister for Foreign Affairs and Trade the embassies worldwide which have enterprise attachés stationed; and the number of such attachés stationed in each such specific embassy by city and country. [36921/18]
View answerAdvancing Ireland’s trade, tourism, education and investment objectives through economic diplomacy and related activities is at the forefront of Ireland’s foreign policy and is reflected in our approach to engaging with global challenges as set out in The Global Island: Ireland’s Foreign Policy for a Changing World. The Embassy network currently comprises 82 Embassies, Consulates and multilateral offices. It plays a crucial role in supporting Irish businesses to grow overseas; in promoting our wider trade interests including through EU and WTO regulation; in addressing market access issues; and in supporting Ministerial visits and trade missions, as part of Team Ireland. The Embassy network is an important resource for our state agencies through its active support of their daily work and strategic objectives in overseas markets. The Embassy network is an invaluable asset for trade promotion in locations with limited or no state agency presence. In an evolving and increasingly challenging global economic and trading environment, our Embassy network is working to further Ireland’s economic objectives overseas and promote Ireland’s attractiveness as a destination to live, study, work, visit, and do business. The strategy framework for this is our trade and investment promotion policy Ireland Connected. Approval has been given for the recruitment in a select number of Embassies and Consulates of additional local staff with the requisite skills and experience to expand and enhance economic and promotional activities, to deepen market penetration and diversification, to enhance our economic and public diplomacy, and to raise our global visibility.
A list is set out below:
|
Country |
City |
Number of Posts |
|
Argentina |
Buenos Aires |
1 (also covering Chile) |
|
Germany |
Berlin |
1 |
|
Indonesia |
Jakarta |
1 |
|
Italy |
Rome |
1 |
|
Kenya |
Nairobi |
1 |
|
Netherlands |
The Hague |
1 |
|
Nigeria |
Abuja |
1 |
|
Poland |
Warsaw |
1 |
|
Romania |
Bucharest |
1 (also covering Bulgaria) |
|
Vietnam |
Hanoi |
1 |
87. Deputy Robert Troy asked the Minister for Finance if the lengthy waiting times for appeals to be heard by the disabled drivers medical board of appeal will be investigated (details supplied). [35878/18]
View answerI have been informed by the Disabled Drivers Medical Board of Appeal that the current waiting list is around four to five months. I am further informed that the Board will endeavour to reduce waiting times in the coming months, with an increasing number of hearings in comparison to the summer months. My officials will continue to monitor the waiting times.
88. Deputy Tony McLoughlin asked the Minister for Finance if road hauliers will be protected from measures introduced in budget 2019 in regard to the carbon tax; if other compensatory measures will be introduced in order to offset a rise in fuel costs (details supplied); and if he will make a statement on the matter. [36245/18]
View answerAs the Deputy will be aware, it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.
89. Deputy Tony McLoughlin asked the Minister for Finance the reason road hauliers that have had to upgrade their fleets to more environmentally friendly vehicles have not been supported in regard to the carbon tax; if consideration will be given to those that have invested heavily in economically friendly vehicles; and if he will make a statement on the matter. [36247/18]
View answerAs the Deputy will be aware, it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.
90. Deputy John Curran asked the Minister for Finance the number of housing units delivered by NAMA to date; the details of these units by scheme; the further units that will be made available by NAMA by scheme for the remainder of 2018 and 2019 as part of its target to deliver over 23,000 housing units by the end of 2030; and if he will make a statement on the matter. [36515/18]
View answerAt the outset, it is important to note that NAMA does not build residential property. Instead, where commercially viable, it funds residential delivery on sites controlled by its debtors and receivers. NAMA is making a significant contribution to the supply of housing within the State and has committed to facilitating the delivery of 20,000 residential units by the end of 2020, when the agency is due to wind up.
As of August 2018, I am advised that NAMA has delivered over 7,800 new residential units as part of its residential delivery programme. A further 2,800 homes are under construction and full planning permission has been granted for 7,800 units. Planning has been lodged, or will be lodged in the next 12 months for an additional 10,200 homes. Finally, pre-planning or feasibility work is underway on sites that have a delivery capacity for just over 15,000 residential units.
In addition, NAMA has an established policy of identifying to Local Authorities and approved housing bodies, properties within its portfolio which may be suitable for social housing. To date 6,984 such properties have been identified, with demand confirmed for 2,717 and 2,474 delivered or committed. Part of this delivery has been through NAMA’s innovative National Asset Residential Property Services (NARPS) model, which has purchased nearly 1,300 properties from NAMA debtors and leased them on for social housing.
91. Deputy Danny Healy-Rae asked the Minister for Finance the reason a tax is imposed on movement of goods, that is, cars (details supplied); when tariff-free trade will be allowed; and if refunds will issue to persons that have been overcharged. [36780/18]
View answerI am informed by Revenue that the Finance Act 1992, Part II, Chapter IV provides for the application of a duty of excise on motor vehicles called Vehicle Registration Tax (VRT). Section 132 of the 1992 Act provides that the tax is to be charged at the time the vehicle is declared for registration or conversion. The tax is therefore not imposed on, and nor is it related to, the movement of goods.
The tax base used to calculate the VRT applicable, called the Open Market Selling Price (OMSP), is provided for in section 133 of the 1992 Act and is defined as “the price, inclusive of all taxes and duties” that a vehicle “might reasonably be expected to fetch on a first arm’s length sale thereof in the open market in the State by retail”. The definition provides that the market price, the OMSP, includes all taxes, including VRT, and does not constitute double taxation nor give rise to overpayments.
No tariffs apply to goods in free circulation in another EU Member State that are brought into Ireland. Tariffs on goods imported from other countries depend on the details of any trade agreement between the EU and that country.
92. Deputy Catherine Murphy asked the Minister for Finance the number of visits either planned or unannounced that were attended by officers from the Revenue Commissioners relating to immigration bureau officer visits to the 12 other public licensed aerodromes not including the three State airports and 13 private licensed aerodromes by aerodrome from 1 January 2016 to 2017 and to date in 2018; and if he will make a statement on the matter. [36452/18]
View answer151. Deputy Catherine Murphy asked the Minister for Finance the number of Revenue Commissioners customs and excise officer visits to the 12 other public licensed aerodromes not including the three State airports and the 13 private licensed aerodromes by aerodrome; the number of planned and unannounced visits from 1 January 2016 to 2017 and to date in 2018; the number of visits either planned or unannounced that were also attended by officers from An Garda Síochána; and if he will make a statement on the matter. [36450/18]
View answer152. Deputy Catherine Murphy asked the Minister for Finance the number of Revenue Commissioners customs and excise officer visits to sea and river ports and or docks by port and or dock; the number of planned and unannounced visits from 1 January 2016 to 2017 and to date in 2018; the number of visits either planned or unannounced that were also attended by officers from An Garda Síochána; and if he will make a statement on the matter. [36451/18]
View answerI propose to take Questions Nos. 92, 151 and 152 together.
In relation to Question 36450/18, I am advised by Revenue that according to the Irish Aviation Authority there are currently 10 public licenced aerodromes apart from the three State airports. These are the five regional airports at Donegal, Sligo, Ireland West (Knock), Kerry and Waterford and the five aerodromes licensed for public use at Connemara, Inis Mór, Inis Meáin, Inis Oírr and Weston.
I am advised by Revenue that a decision by them to undertake a visit to any aerodrome is based on Revenue's assessment of risk, having regard to a range of factors, including intelligence. Such visits are normally unannounced, but may from time to time be announced visits having regard to Revenue’s particular focus and engagement in the context of a visit. Officers from An Garda Síochána did not accompany Revenue officers on any of these visits.
A table detailing the statistical information requested is attached.
Table: Aerodrome visits by Revenue Customs from 1 Jan 2016 to 31 August 2018
|
Aerodrome/Airport |
Announced |
Unannounced |
|
Kerry |
0 |
136 |
|
Donegal |
0 |
9 |
|
Inis Meáin |
0 |
0 |
|
Inis Mór |
0 |
4 |
|
Inis Oírr |
0 |
0 |
|
Ireland West (Knock) |
0 |
275 |
|
Connemara |
8 |
17 |
|
Sligo |
0 |
17 |
|
Waterford |
0 |
10 |
|
Weston |
2 |
87 |
|
Grand Total |
10 |
555 |
In relation to Question 36451/18, I am advised by Revenue that in the period from 1 January 2016 until 31 August 2018 there were 4,794 visits to ports, harbours and marinas. A decision by Revenue to undertake a visit to any such facility is based on Revenue's assessment of risk, having regard to a range of factors, including intelligence. Such visits are normally unannounced, but may from time to time be announced having regard to Revenue’s particular focus and engagement in the context of a visit. Officers from An Garda Síochána accompanied Revenue officers on 144 visits.
The following table sets out the statistical information requested.
Table : Port, Harbour and Marina visits by Revenue Customs from 1 Jan 2016 to 31 August 2018
|
Ports, Harbours, Marinas |
|
Adrigole |
|
Arklow |
|
Askeaton |
|
Aughinish |
|
Arklow |
|
Ballyglass |
|
Ballynacally |
|
Ballysteen Pier |
|
Ballyvaughan |
|
Baltimore |
|
Bantry |
|
Belview |
|
Caherciveen |
|
Carrigaholt Piers |
|
Carlingford |
|
Castletownbere |
|
Castletownshend |
|
Cobh |
|
Cork City |
|
Crosshaven |
|
Customs House Quay, Cork |
|
Dingle |
|
Dinish Island |
|
Doonbeg pier |
|
Drogheda |
|
Dublin Port |
|
Dundalk |
|
Dun Laoghaire |
|
Dunmore East |
|
Fenit |
|
Foynes |
|
Galway |
|
Goleen |
|
Glandore |
|
Glin Pier |
|
Greencastle |
|
Greenore |
|
Greystones |
|
Horgan's Quay |
|
Howth |
|
Killadysert Pier |
|
Killybegs |
|
Kilmore Quay |
|
Kilrush |
|
Kilteery Pier |
|
Kinsale |
|
Lawerence Cove |
|
Limerick |
|
Liscannor Pier |
|
Marino Point |
|
Monkstown, Cork |
|
Moneypoint |
|
New Ross |
|
Passage |
|
Port Magee |
|
Querrin Pier |
|
Ringaskiddy |
|
Ringmoylan Pier |
|
Rossaveal |
|
Rosslare Harbour |
|
Schull |
|
Sherkin Island |
|
Sligo |
|
South Jetties |
|
Tarbert |
|
Tivoli |
|
Union Hall |
|
Valentia |
|
Wicklow |
|
Waterford |
|
Youghal |
|
Sub Total |
|
Other visits (These are visits by Revenue Maritime staff or Revenue Customs Cutters to locations e.g. piers and slipways, as part of a risk assessment of potential landing spots for prohibited and restricted goods. A breakdown by location is not available) |
|
Full Total |
In relation to Question 36452/18, I am advised by Revenue that according to the Irish Aviation Authority there are currently 10 public licenced aerodromes apart from the three State airports. These are the five regional airports at Donegal, Sligo, Ireland West (Knock), Kerry and Waterford and the five aerodromes licensed for public use at Connemara, Inis Mór, Inis Meáin, Inis Oírr and Weston.
I am advised by Revenue that between the period 1 Jan 2016 to 31 August 2018 there were 565 visits by Revenue Customs of which 10 visits were announced and 555 visits were unannounced. No officers from An Garda Síochána, which includes the Garda National Immigration Bureau, accompanied Revenue officers on any of these visits.
93. Deputy Paul Murphy asked the Minister for Finance if he will consider reintroducing tax relief on trade union subscriptions on a par with tax relief for professional bodies; the estimated cost of introducing the relief at the employee's marginal rate; and if he will make a statement on the matter. [35422/18]
View answer95. Deputy Thomas Pringle asked the Minister for Finance his plans to restore tax relief for union subscriptions, which was removed in budget 2011 and which is common practice in many other countries; the reason tax relief on subscriptions to professional bodies has been maintained while tax relief on trade union subscriptions have not been restored; and if he will make a statement on the matter. [35496/18]
View answerI propose to take Questions Nos. 93 and 95 together.
The review of the appropriate treatment for tax purposes of trade union subscriptions and professional body fees was carried out by my Department in 2016, and included in the 2016 report on tax expenditures published on Budget day 2016.
http://www.budget.gov.ie/Budgets/2017/Documents/Tax_Expenditures_Report%202016_final.pdf.
Regarding tax relief for trade union membership subscriptions, the review concluded that:
"...analysis of the scheme using the principles laid down by the Department’s Tax Expenditure Guidelines shows that it fails to reach the evaluation threshold to warrant introduction in this manner.
The reinstatement of this tax relief would have no justifiable policy rationale and does not express a defined policy objective. Given that individuals join trade unions largely for the well-known benefits of membership, and the potential value of the relief to an individual would equate to just over €1 per week, this scheme would have little to no incentive effect on the numbers choosing to join. There is no specific market failure that needs to be addressed by such a scheme, and it would consist largely of deadweight."
Regarding the issue of tax relief on subscriptions to professional bodies, I refer the deputies to the section of the review which addressed this matter, stating:
"There is a fundamental difference between membership of a professional body which is required to practice that profession and membership of a trade union, which is essentially, a personal choice.
Professional bodies often have a regulatory function, governing standards within a particular sector or industry, with practitioners or employees often required to be a member of a professional body in order to engage in employment in particular fields.
A person cannot be refused the right of employment for failure to join a trade union. By contrast, a person can be refused the right of employment as a solicitor, for example, if they fail to hold a practicing certificate."
Given the conclusion of the review, I have no plans to reintroduce such a relief.
Regarding the specific enquiry on the estimated cost of the relief if it were re-introduced and provided at the employee's marginal rate, the following table sets out details of the cost of the relief in the seven years immediately prior to its end.
|
Year |
Cost (€ million) |
No. of Claims |
|
Year |
Cost (€ million) |
No. of Claims |
|
2004 |
10.7 |
248,300 |
|
2005 |
11.8 |
272,100 |
|
2006 |
19.2 |
294,300 |
|
2007 |
20.7 |
316,300 |
|
2008 |
26.4 |
341,900 |
|
2009 |
26.7 |
345,800 |
|
2010 |
26 |
337,500 |
I am advised by Revenue that while these figures may not provide an accurate indicator of future costs of a new scheme, there is no other basis available to Revenue on which to estimate such costs.
94. Deputy Pat Deering asked the Minister for Finance the reason the vehicle registration tax calculator calculates a different value for a vehicle that been imported than for a similar vehicle being exported. [35437/18]
View answerI am advised by Revenue that it provides public access to a vehicle valuation database via an online VRT calculator, which is located on its website at www.revenue.ie. This VRT calculator is dual purpose and can be used to show the Open Market Selling Price ‘OMSP’ and VRT payable on imported vehicles as well as the ‘OMSP’ and VRT repayable on exported vehicles.
When using the calculator, the customer is provided with the option to select either a ‘vehicle VRT calculation’ or a ‘vehicle export enquiry’. Once the selection is made the VRT calculator takes account of the different rules that apply in arriving at a VRT payable amount as compared to a VRT repayable amount and I am assured it is operating correctly in this regard.
The calculator will provide different values if the user is not perfectly consistent in the inputs and selections made in each enquiry, such as mileage, age, transmission, doors, engine type, body type, engine capacity, and version. It will also provide different values if both enquiries are not made on the same day, and Revenue has amended the valuation details in the relevant statistical code.
Finally, Revenue has confirmed to me that its Central Vehicle Office will contact the Deputy’s office to ascertain if he wishes to discuss a specific case.
96. Deputy Eoin Ó Broin asked the Minister for Finance the cost of the contracting out of secure printing by his Department in 2016, 2017 and to date in 2018. [35531/18]
View answerThe Department has not incurred any costs in the contracting out of secure printing in 2016, 2017 or 2018, to date.
The Department has an in-house Print Room. None of the work completed would be considered secure printing.
97. Deputy Niall Collins asked the Minister for Finance if he will request a bank to issue a refusal letter to a person (details supplied); and if he will make a statement on the matter. [35558/18]
View answerThe Deputy may be aware that, as Minister for Finance, I have no direct function in the relationship between banks and their customers. Decisions taken by banks in this regard, and the manner in which they conduct their day-to-day operations, are matters for the board and management of the respective banks.
Notwithstanding the fact that the State has shareholdings in some of the banks, I must ensure that these institutions are run on a commercial, cost effective and independent basis to protect their value as assets to the State. Accordingly, it would not be appropriate for me to intervene in the case of an individual customer. Relationship Frameworks have been specified that define the nature of the relationship between the Minister for Finance and the banks and these Frameworks are available on my Department’s website.
As the circumstance described by you is a matter concerning a bank, the individual involved should continue to engage with the bank. Should the matter not be resolved to the individual’s satisfaction, they can refer the matter to the Financial Services and Pensions Ombudsman.
98. Deputy Michael McGrath asked the Minister for Finance if the Revenue Commissioners invoke section 122(3) of the Taxes Consolidation Act 1997 in circumstances (details supplied); and if he will make a statement on the matter. [35581/18]
View answerI would like to draw the Deputy’s attention to my reply to Parliamentary Question No. 188 of 29 May 2018 and to Parliamentary Question No. 171 of 10 July 2018 which are relevant to this matter.
I am advised by Revenue, and as I have stated in the replies to which I have referred, where an employer can show to the satisfaction of Revenue that the employee (current or former) has no loans on preferential terms and that the outcome of the write off would be the same for the employee or former employee as it would be for a non-employee customer of the bank, then any write off will not attract a tax liability in accordance with section 122(3) of the Taxes Consolidation Act 1997.
99. Deputy Sean Fleming asked the Minister for Finance the arrangements in place for the Revenue Commissioners to collect from self-employed persons combined income tax, USC and PRSI liability through the Revenue Commissioners' self-assessment system in respect of the year in which a self-employed person reaches 66 years of age; and if he will make a statement on the matter. [35636/18]
View answer100. Deputy Sean Fleming asked the Minister for Finance the situation in which the Revenue Commissioners collect the combined income tax, USC and PRSI liability in respect of all tax years up to and including when a self-employed person reaches 65 years of age; the number of persons this relates to; the arrangements the Revenue Commissioners have to collect the 66th year payment; the number of persons this payment is not collected from in respect of the 66th year; the estimated loss arising from same; and if he will make a statement on the matter. [35637/18]
View answerI propose to take Questions Nos. 99 and 100 together.
As the questions relate to the collection of combined income tax, USC and PRSI liabilities, I propose taking them together. I am advised by Revenue that self-employed persons are generally taxed under the self-assessment system in Part 41A of the Taxes Consolidation Act 1997. Under Part 41A, a taxpayer is required to submit a tax return to Revenue by 31 October in the year following the tax year to which the return relates (or by mid-November, if paying and filing through ROS) and pay any balance of the liability (net of preliminary tax paid) in respect of income tax, USC and PRSI for the year to the Collector-General at the same time. Where a self-employed individual discharges the combined income tax, USC and PRSI liability through the self-assessment system, a single payment is made in respect of the combined liability for all complete tax years up to and including the year in which he or she reaches their 65th year. Where an individual is aged 66 or over in a tax year, PRSI is not chargeable for that year under the self-assessment system. However, an individual who wishes to pay PRSI in respect of a period immediately prior to their 66th birthday should make the necessary arrangements with the Department of Employment Affairs and Social Protection, Client Eligibility Services, Government Buildings, Cork Road, Waterford.
A taxpayer who has income taxed under the PAYE system (such as a private pension or salary) and who also has taxable non-PAYE income (for example, from self-employment) may, in certain circumstances, where such income does not exceed €5,000 request Revenue to reduce their annual PAYE tax credits and rate band entitlements, so that the tax on their non-PAYE income is deducted by their pension provider or employer. Any such taxpayer is not considered a chargeable person for self-assessment purposes and has no obligation to file an annual tax return under the self-assessment system. Revenue may, however, request a tax return from such taxpayers.
Any further information that may be required in respect of PRSI liabilities for self-employed persons in their 66th year or the eligibility of such persons for social welfare benefits may be sought from the Minister for Employment Affairs and Social Protection. Revenue has confirmed that it does not maintain statistics in respect of either the number of persons the payment is not collected from or the estimated loss arising from same.
101. Deputy Róisín Shortall asked the Minister for Finance his plans to extend the home renovation incentive scheme for 2019; and if he will make a statement on the matter. [35646/18]
View answerIn accordance with the relevant provisions of the Taxes Consolidation Act 1997, the Home Renovation Incentive is due to expire at the end of this year. As with all such time limited incentives, I will consider the future of this measure in the context of my preparations for the forthcoming Finance Bill. As part of that work, my officials are carrying out the appropriate ex-post evaluation of the incentive having regard to the criteria set out in my Department's Tax Expenditure Guidelines.
102. Deputy Sean Fleming asked the Minister for Finance the number of cases in which the Tax Appeals Commission has made a determination and direction to the Revenue Commissioners in respect of cases in which it has not implemented the direction in full in each of the years 2016, 2017 and to date in 2018; the estimated tax liability involved in these cases in each year; and if he will make a statement on the matter. [35648/18]
View answerIn response to the Deputy's question, I am informed by the Tax Appeals Commission (TAC) that it does not have an enforcement role to ensure that the Revenue Commissioners (Revenue) comply with determinations made by the Appeal Commissioners. Revenue are legally bound to comply with these decisions in accordance with section 949AM of the Taxes Consolidation Act (TCA), 1997. Pursuant to that provision, Revenue shall give effect to any determination made by the Appeal Commissioners unless the appeal has been appealed to the High Court in accordance with sections 949AP and 949AQ TCA 1997.
I am advised by Revenue that the making of a determination by the TAC is typically the final stage of a tax appeal, unless the determination is then appealed to the High Court. In giving effect to a determination against a tax assessment, Revenue is required to calculate the tax chargeable (if any) in respect of the amount assessed to tax. The result will be a withdrawal or amendment of the assessment, the making of a refund or the collection of any outstanding tax.
Section 949E(1) TCA 1997 allows the TAC to give a direction to Revenue (and to appellants) in relation to the conduct or disposal of an appeal. It is open to both Revenue and appellants to apply to the TAC to have a direction amended, suspended or set aside. Such an application is typically made where the parties (i.e. Revenue and appellants) are not in a position to comply with the time limits imposed by the TAC for the submission of certain types of information or documentation and request additional time to comply with the direction. As directions are essentially related to procedural matters associated with the particular appeal, Revenue does not compile statistics on directions given to it by the TAC.
A determination of an appeal is not a direction and cannot be amended, suspended or set aside. As determinations are made by the TAC on an ongoing basis, at any point in time there will be determinations yet to be implemented by Revenue. However, statistics on such cases are not compiled and are not available. Such instances would be rare and of not unreasonable duration given the statutory requirement for Revenue to give effect to determinations made by the TAC. In any event, as the appeal has been determined at this stage, the tax liability would no longer be estimated but would be established in line with the TAC determination.
There are currently fewer than ten determinations made by the TAC that are under appeal to the High Court and in relation to which the final tax liability has not yet been decided. The tax in dispute for these cases is approximately €3 million.
103. Deputy Jonathan O'Brien asked the Minister for Finance the percentage of the total cost of the research and development tax credit which relates to expenditure incurred by businesses on items (details supplied). [35683/18]
View answerI am advised by Revenue that statistical information in respect of research and development tax credit is published on the Revenue website at www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/r-and-d-tax-credits.aspx.. It is not possible to provide a breakdown of the cost of the credit by business items as the amounts claimed in respect of plant and machinery, scientific research, buildings and other expenditure are aggregated before being offset against tax in the year or being carried forward to a later year as unused credit.
Additionally, information in respect of royalties and expenses deductible for trading purposes are not available in respect of claims of research and development tax credit.
104. Deputy Michael Healy-Rae asked the Minister for Finance the reason the average rate for a new mortgage here is so high (details supplied); and if he will make a statement on the matter. [35684/18]
View answerAs the Deputy will be aware, there are a number of factors that influence mortgage interest rates in Ireland. These include the high level of non-performing loans (NPLs), the low rate of repossessions, a reduced number of banks in the system and the high proportion of tracker rate mortgages on the bank books.
In line with the continuing economic recovery, the level of mortgage arrears and non-performing loans has now declined from the peak but they are still significantly higher than most other euro zone countries. High holdings of NPLs reduces profitability, increases funding costs and ties up bank capital, which has a negative impact on the supply of new credit. All of these factors feed through to higher interest rates for new mortgages. Ireland’s NPL ratio was 13.3% at Q1 in 2018 compared to an EU average of 4%.
There is a very low rate of repossessions in Ireland. The lower risk rating that secured lending attracts is compromised because the realisation of collateral is a lengthy and difficult process. As mentioned previously in relation to NPLs, our low rate of repossessions leads to a lower supply of new credit and higher interest rates than would otherwise be the case for the market as a whole in the future.
Competition has been reduced due to a decline in active lenders from 12 ten years ago to five now. This is likely to be a contributing factor, along with the high level of NPLs, to the fact that Central Bank research from May 2015 found that the spread between official ECB rates and standard variable rate is relatively high and that new lending rates are above average compared to European peers.
Furthermore, the Central Bank undertook research in the area of mortgage switching in 2017 through a public consultation with the objective of considering some possible changes to the Consumer Protection Code to further promote switching in the mortgage market. This was to build on the measures introduced last year which required lenders to provide more information to borrowers on how they set and adjust standard variable rate (SVR) mortgages and also to improve the level of information they provide to borrowers about their other mortgage products which could provide savings for the SVR borrower. The Central Bank published their responses to the submissions they received in June this year and an Addendum for Enhanced Mortgage Switching Measures: Transparency and Switching will come into effect on 1 January 2019. Among the changes that will be introduced are:
- The introduction of a fixed rate transparency measure which introduces a 60 day notification period for consumers whose rate is about to expire.
- There will be enhanced mortgage transparency measures on variable rates on Loan-to-Value (LTV) which would mean lenders would notify consumers on an annual basis of whether they can, or cannot, move LTV interest rate bands, subject to the provision of an up-to-date valuation to their lender. If the particular lender doesn’t allow for such movement between LTV bands, they must notify the consumer that other banks may offer such movement.
- A measure to improve the transparency of incentives linked to mortgages will be introduced to ensure sufficient clarity for the consumer and the advertising of same.
- In terms of potential switching savings measures, on request of the consumer, lenders will be required to provide existing borrowers with an indicative comparison with alternative or new rates offered by that regulated entity only but also they will have to provide a link to the CCPC website that allows customers make sure they are availing of the best available interest rate.
- All lenders will provide standardised information on the mortgage process and if switching, both the original and new mortgage lender will establish a switching point of contact/switch team.
- All lenders will provide redemption figures to the consumer or their legal representative within 5 days and will keep the consumer updated throughout the mortgage process with specific timelines for the different parts of the process.
As the Deputy can see, the higher rates charged for new mortgages in Ireland versus other European countries stem from a range of factors such as the high level of NPLs. The ongoing recovery in our economy, which is reflected in strong employment growth, is helping to reduce the levels of NPLs, together with the range of initiatives and protections introduced for those in mortgage arrears.
The Government is of the opinion that increased competition and switching in the market, rather than administrative controls, remains the best way to ensure that retail lending rates are driven down in a sustainable way for the market as a whole but without giving rise to potentially undesirable consequences for the provision of new mortgage lending.
105. Deputy Fiona O'Loughlin asked the Minister for Finance the status of an application by a person (details supplied). [35714/18]
View answerStart Up Refunds for Entrepreneurs (SURE) is an income tax incentive aimed at encouraging individuals to become entrepreneurs. Where an individual who was in full time employment sets up their own company, and takes up full time employment with that company, they are entitled to set the amount invested against their taxable income in the six years prior to their investment. In this way, they receive a tax refund to support them in their new venture.
With regard to the specific query raised by the Deputy on behalf of a taxpayer, Revenue have advised me that the application was approved for relief on 1 August 2018.
