Wednesday, 10 October 2018

Questions (57, 58, 59, 60, 61)

Joan Burton

Question:

57. Deputy Joan Burton asked the Minister for Finance the estimated increase in the number of high net worth individuals dealt with by the Revenue Commissioners large cases division if the threshold for inclusion was reduced to €30 million; the additional resources which would be required to provide for such a reduction; if such resources will be made available to the Revenue Commissioners; and if he will make a statement on the matter. [41283/18]

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Joan Burton

Question:

58. Deputy Joan Burton asked the Minister for Finance the estimated increase in the number of high net worth individuals dealt with by the Revenue Commissioners large cases division if the threshold for inclusion was reduced to €20 million; the additional resources which would be required to provide for such a reduction; if such resources will be made available to the Revenue Commissioners; and if he will make a statement on the matter. [41284/18]

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Joan Burton

Question:

59. Deputy Joan Burton asked the Minister for Finance the estimated increase in the number of high net worth individuals dealt with by the Revenue Commissioners large cases division if the threshold for inclusion was reduced to €10 million; the additional resources which would be required to provide for such a reduction; if such resources will be made available to the Revenue Commissioners; and if he will make a statement on the matter. [41285/18]

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Joan Burton

Question:

60. Deputy Joan Burton asked the Minister for Finance the number of new cases added to the high net worth individuals unit in the Revenue Commissioners large cases division in each year since the unit's formation in 2003; the number of cases dropped and moved to other units of the Revenue Commissioners; and if he will make a statement on the matter. [41286/18]

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Joan Burton

Question:

61. Deputy Joan Burton asked the Minister for Finance the estimated additional audit yield if a properly resourced high net worth individuals unit took responsibility for those with net assets greater than €10 million, €20 million and €30 million, respectively; and if he will make a statement on the matter. [41287/18]

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Written answers (Question to Finance)

I propose to take Questions Nos. 57 to 61, inclusive, together.

Tax administrations generally use assets and/or wealth as their main criteria for determining a HWI, while some also include income criteria. I am advised by Revenue that its criterion to be considered a HWI and come within the management of the HWI Units of its Large Cases Division is individuals with net assets of over €50 million.

I am advised by Revenue that there is no statutory obligation on individuals to return details of their net worth on returns of income. Accordingly, Revenue does not have the data required to estimate the number of individuals with a net worth within the thresholds requested.

Revenue has had a focus on High Wealth Individuals (HWIs) over a long period. HWIs have been managed by dedicated units within its Large Cases Division since it was established in 2003. Revenue has recently split its Large Cases Division into two divisions, one of which will now focus on HWIs, avoidance and pensions. The new Division is in the process, as reflected in one of the recommendations in the Annual Report by the Comptroller and Auditor General (C&AG), of reviewing the case base with a view to increasing the number of HWIs managed in the Division. The allocation of resources is a matter for Revenue but I understand that Revenue’s structural realignment, of which the setting up of the new Large Cases Division is a part, is being supported by an expansion in the number of specialist and experienced staff assigned to the oversight of the new Division’s case base. I also understand that Revenue is also establishing a new Division, the Medium Enterprises Division, to manage the affairs of the tier of cases, both corporate and individuals below the Large Cases Division.

I am advised by Revenue that the case base of the dedicated units within its Large Cases Division is adjusted periodically but not necessarily on an annual basis. The following Table provides the number of HWIs managed in the Division for the years indicated:

Year

Number of HWIs

2004

250

2006

300

2017

571

2018

480

I am advised by Revenue that cases not previously or currently meeting the criteria for inclusion in its Large Cases Division were and are subject to ongoing risk evaluation and, where necessary, intervention programmes. Revenue’s overall approach to managing compliance is to make the appropriate intervention following appraisal of the risk factors in each case. This applies to all taxpayers including those not within the responsibility of Large Cases Division.

I am satisfied that the structural realignment being advanced by Revenue combined with the use by Revenue of the powers available to them will continue to deliver an outcome where HWIs pay the appropriate tax in accordance with the legislation. Finally, I am advised by Revenue that it is not possible to estimate additional audit yield related to cases not currently within the responsibility of Revenue’s LCD. However, Revenue has pointed out that in the first instance there is a presumption of honesty regarding the behaviour of taxpayers who pay on a self-assessment basis and no category of taxpayer would be regarded, in advance of a case appraisal, as likely to give rise to audit yield. Secondly, all taxpayers are subject to risk evaluation and intervention as appropriate so bringing a particular category of taxpayers within the remit of the Large Cases Division would not, of itself, be a determinant of an increased audit yield.

Over the last number of Budgets/Estimates process I supported the business case put forward by Revenue in relation to additional resources, both personnel and ICT, and I will continue to examine any proposal put forward by Revenue in the future.