Written Answers Nos. 47-72
47. Deputy Brendan Smith asked the Tánaiste and Minister for Foreign Affairs and Trade the position on the talks with the political parties in Northern Ireland and the Secretary of State for Northern Ireland regarding the need to have the Northern Ireland Assembly and Executive restored at an early date; and if he will make a statement on the matter. [36505/19]
View answerThe continuing absence of the power-sharing Executive and Assembly in Northern Ireland and the North South Ministerial Council is of grave concern for the Government as it is for the British Government.
The Government will continue to do everything in its power, in accordance with its responsibilities as a co-guarantor of the Good Friday Agreement, to secure the effective operation of all of its institutions.
I have engaged extensively with the Secretary of State for Northern Ireland throughout the latest talks process, to encourage the parties to reach an accommodation. I continued this engagement over the summer months and I remain in regular and ongoing contact with Secretary of State Smith at the present time, to work to secure agreement between the parties to get all of the institutions of the Agreement up and running again.
All five political parties have engaged constructively in the talks process with that objective over the last number of months. Progress has been made across a range of important issues. However, some key outstanding issues remain and finding final agreement on these issues will require genuine and courageous dialogue and leadership by the party leaders in Northern Ireland. The two largest parties have a particular responsibility to reach an accommodation to secure the formation of a new power-sharing Executive.
The awful murder of Lyra McKee and the outpouring of public feeling that followed demands a serious response at political level. People want the devolved power-sharing institutions up and running again to represent their interests and deal with the issues and challenges that Northern Ireland faces at present, not least the difficulties raised by the UK exit from the European Union. The functioning of the North South Ministerial Council is also urgently required, to bring together the Executive and the Government to oversee and develop co-operation on the island, and as a vital part of the Good Friday Agreement.
In this context, the political parties, in particular the two largest parties, must live up to their responsibilities and be open to fair and workable compromises on the small number of outstanding issues, to secure the overall interests of people in Northern Ireland and to protect and operate again the institutions of the Good Friday Agreement again.
This will be difficult, but the two Governments believe that this can, and must, be achieved. Accordingly, the Government will continue to do everything possible to support continuing engagement and progress in discussions between the political parties, working with the UK Government in any scenario, as co-guarantors of the Good Friday Agreement.
48. Deputy Lisa Chambers asked the Tánaiste and Minister for Foreign Affairs and Trade the background of the campaign his Department and others commenced on 4 September 2019 regarding increasing Brexit preparation; the details of the procurement process; the person or body responsible for co-ordinating same; the costs involved; and if he will make a statement on the matter. [36782/19]
View answer49. Deputy Lisa Chambers asked the Tánaiste and Minister for Foreign Affairs and Trade the involvement of his Department in the public relations campaign that started on 4 September 2019 on national and local radio on Brexit preparation; and if he will make a statement on the matter. [36800/19]
View answerI propose to take Questions Nos. 48 and 49 together.
The Government-wide ‘Getting Ireland Brexit Ready’ public information campaign was launched on 20 September 2018.
In the initial phase of this campaign, my Department organised “Getting Ireland Brexit Ready” public information events in Cork, Galway, Monaghan, Dublin, Limerick and Donegal throughout autumn 2018 to inform and advise citizens and businesses about Brexit preparedness and the range of support measures and resources that the Government has put in place. These events brought together over a dozen Agencies and their parent Departments – the Department of Business, Enterprise and Innovation, the Department of Agriculture, Food and the Marine, and the Department of Transport, Tourism and Sport - under one roof and were attended by approximately 2,500 people over the October-November period.
In the lead up to the March and April Brexit deadlines, my Department working closely with the Department of the Taoiseach and other Government Departments initiated a Brexit preparedness public information campaign, This campaign ran to ensure that key audiences are aware of the potential impact of a no deal Brexit and the mitigation measures that they can take, with the support of Government where appropriate and with particular reference to the gov.ie/Brexit website. This campaign activity was across TV, radio, print, internet and social media.
Building on the ‘Getting Ireland Brexit Ready’ roadshows and the broad ranging information campaign in advance of the March and April Brexit deadlines, I along with Minister Heather Humphreys and Minister Helen McEntee launched ‘Getting Your Business Brexit Ready – Practical Steps’ campaign on 4 September. This campaign informs businesses and consumers on the practical steps that all businesses should take now to prepare for the UK’s departure from the EU. Central to this campaign is a user-friendly digital booklet, which provides a comprehensive overview for businesses on the core steps they should take and can be accessed at gov.ie/Brexit. The Practical Steps campaign will complement existing business focussed Government initiatives and events taking place in September and October.
In addition to this booklet, a two week national and local radio campaign is urging businesses to take action and review readiness under 9 key areas. This campaign targets businesses and other affected sectors and encourages them to take the necessary steps to help mitigate the risk of a no deal Brexit on 31 October 2019.
Under the auspices of the Department of the Taoiseach, through the Office of Government Procurement, a contract was awarded to TBWA for the provision of integrated creative and digital campaign services. This contract was procured in accordance with standard public procurement rules. As the campaign is currently on going, it is not possible to provide full costs at this time to the Deputy, but they will be available on its conclusion.
50. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Foreign Affairs and Trade the extent to which he remains satisfied that all possible actions have been taken by his Department in anticipation of a UK crash-out from the EU; and if he will make a statement on the matter. [36922/19]
View answerGovernment remain firmly of the view that the best way to ensure an orderly UK withdrawal, in a way that addresses the unique circumstances on the island of Ireland, is to ratify the Withdrawal Agreement. It still offers the best path to an orderly Brexit.
It is the Government’s assessment that there is a significant risk of a no deal Brexit on 31 October. Work on no deal Brexit preparations therefore has the highest priority across Government. To be clear, a no deal Brexit will have profound implications for Ireland on all levels. These include macroeconomic, trade and sectoral challenges, both immediately and in the longer term. It will also pose particular risks for the Good Friday Agreement, for the all-island economy and for Northern Ireland’s economy, political stability and community relations.
In terms of Ireland's preparedness measures, the Brexit Contingency Action Plan Update, published on 9 July, reflects the extensive work which has taken place at EU level and on a whole-of-Government basis, including the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019 (Brexit Omnibus Act), to prepare for a no deal Brexit.
The Action Plan sets out the next steps to be taken, by Government Departments and State Agencies, businesses and individuals, between now and 31 October. It puts particular emphasis on the need for increased preparedness measures, by exposed businesses in particular.
As part of Government's work to support businesses in preparing for Brexit, on 4 September I launched 'Getting Your Business Brexit Ready - Practical Steps', which highlights the nine key steps all businesses should take now to prepare for the UK's departure from the EU.
In parallel with our preparedness work at national level, the Government is working closely with the European Commission on how, in the absence of the Withdrawal Agreement, to meet the shared twin objectives of protecting the integrity of the Single Market and Ireland’s place in it, and protecting the Good Friday Agreement.
It is only by Government, business and citizens working together nationally and with our EU partners that we can aim to mitigate as far as possible the impacts of a no deal Brexit, and ensure that we are as prepared as we can be for the changes it will bring.
51. Deputy Catherine Murphy asked the Minister for Finance if his attention has been drawn to the cessation by a company (details supplied) to provide specialist insurance here; if he has engaged with the company on the matter; if he has sought to engage other insurance providers regarding providing an alternative specialist cover here; and if he will make a statement on the matter. [34783/19]
View answer52. Deputy Michael Healy-Rae asked the Minister for Finance if he will address a matter (details supplied) regarding insurance costs; and if he will make a statement on the matter. [35034/19]
View answerI propose to take Questions Nos. 51 and 52 together.
I am aware of the issues facing many businesses in the leisure, sports and tourism sectors when it comes to the affordability and availability of insurance. Unfortunately, neither I, nor the Central Bank of Ireland, can compel any insurer to continue operating in the Irish market as this is a matter of a commercial nature, and the company in question has made its decision based on an assessment of the risks they are willing to accept. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. Consequently, the Government cannot direct insurance companies to cover certain types of risk, such as those in the leisure, sports or tourism sectors. A further constraint is the fact that for constitutional reasons, Government cannot direct the courts as to the award levels that should be applied.
While there is unfortunately no quick fix solution to this complex matter, I wish to re-emphasise however that this issue remains a priority for the Government. The Cost of Insurance Working Group (CIWG), which was established in July 2016, and which produced two reports, is continuing to work to implement the recommendations of the Cost of Motor Insurance Report and the Cost of Employer and Public Liability Insurance Report. Its most recent Progress Update, the Ninth, was published in July 2019 and shows that the vast majority of recommendations and actions due by Q2 2019 have been completed. To that end, the key achievements to date from the two reports, including the following:
- The establishment of the Personal Injuries Commission and the publication of its two reports, which included a benchmarking of award levels between Ireland and other jurisdictions for the first time. This showed that award levels for soft tissue injuries in Ireland were 4.4 times higher than in England and Wales;
- The enactment of the Judicial Council Act 2019, in July which provides for the establishment of a Personal Injuries Guidelines Committee. It is now a matter for the Judiciary to put in place the Judicial Council and to operationalise the Personal Injuries Guidelines Committee, which will introduce new guidelines to replace the Book of Quantum. While the Government cannot interfere in their deliberations, I would hope that the Judiciary will recognise the importance of this issue and prioritise it accordingly;
- The commencement and prioritisation by the Law Reform Commission (LRC) of its work to undertake a detailed analysis of the possibility of developing constitutionally sound legislation to delimit or cap the amounts of damages which a court may award in respect of some or all categories of personal injuries, as part of its Fifth Programme of Law Reform;
- The establishment of the National Claims Information Database in the Central Bank of Ireland (CBI) to increase transparency around the future cost of private motor insurance. The CBI is due to make its first report by the end of 2019, and will also make recommendations to me regarding potentially expanding its scope to include employer and public liability insurance;
- Reforms to the Personal Injuries Assessment Board through the Personal Injuries Assessment Board (Amendment) Act 2019 to strengthen the powers of PIAB around compliance with its procedures;
- Commencement of the amendments to Sections 8 and 14 of the Civil Liability and Courts Act 2004 to align the timeframes by which claims should be notified to businesses with GDPR time limits on the keeping of CCTV footage to make it easier for businesses and insurers to challenge cases where fraud or exaggeration is suspected;
- The reform of the Insurance Compensation Fund to provide certainty to policyholders and insurers, resulting from the failure of Setanta Insurance; and,
- Various reforms of how fraud is reported to and dealt with by An Garda Síochána, including increased co-ordination with the insurance industry, as well as the recent decision by the Garda Commissioner to develop a divisional focus on insurance fraud which will be guided by the Garda National Economic Crime Bureau (GNECB) which will also train Gardaí all over the country on investigating insurance fraud, and the recent success under Operation Coatee, which targets insurance-related criminality.
I believe that these reforms are having a significant impact with regard to private motor insurance (CSO figures from July 2019 show that the price of motor insurance is now 24.5% lower than the July 2016 peak). The Government is determined to continue working to ensure that these positive pricing trends can be extended to other forms of insurance, particularly those relevant to businesses.
With respect to insurance for the leisure, sports and tourism sectors, I am aware of the withdrawal of a number of underwriters from the Irish market recently, including the company in the details supplied and that this has caused a problem for a number of small businesses which were or are due to renew their premiums since then. The company is a UK-authorised company and conducted its business in the Irish market on a Freedom of Services basis, and cited Brexit as its primary reason for its departure. Minister of State for Financial Services and Insurance, Michael D’Arcy TD, has met with the company and it is understood that certain parts of the company’s leisure book were not profitable over the last number of years so it is likely that this has played a key part in its decision to exit the Irish market. However, the underwriter remains committed to the other parts of the Irish market it serves.
I acknowledge that the level of awards and the inconsistency in such awards is undoubtedly a factor in many insurers’ decisions not to continue in the Irish market. It is for this reason that I believe it is important to emphasise that the single most essential challenge which must be overcome if there is to be a sustainable reduction in insurance costs is to bring the levels of personal injury damages awarded in this country more in line with those awarded in other jurisdictions, and the establishment of the Judicial Council in the coming months is very important in this regard.
In light of this you should note that Minister of State D’Arcy is due to meet with a number of UK insurers/underwriters in London next week to advise them of these recent legislative changes and promote Ireland as a place to continue to write business. I think this is an important exercise as hopefully it will encourage some insurers to rethink their position about the Irish market.
I believe that Irish based insurers should also reflect on these reforms and in that context Minister of State D’Arcy has been engaging with them in order to seek a commitment that they will reduce premiums and widen their risk appetite to reflect savings made or potential savings, in particular if there is a recalibration of award levels downwards. I am also encouraged by the comments made by a number of insurers at the Finance, Public Expenditure and Reform and Taoiseach Oireachtas Committee in July about the passing on of savings arising from a recalibration of award levels downwards.
In conclusion, I would like to assure the Deputies that important reforms are taking place and that I am confident that if the level of awards are reduced as a results of the operationalisation of the Personal Injuries Guidelines Committee, then the insurance premium and coverage issues that are being experienced by the leisure, sports and tourism sectors and many businesses more generally should recede.
53. Deputy Margaret Murphy O'Mahony asked the Minister for Finance his plans to review the criteria for the primary medical certificate in order for persons with disabilities to avail of VRT reductions; and if he will make a statement on the matter. [35419/19]
View answerThe Disabled Drivers and Disabled Passengers (Tax Concessions) Scheme provides relief from VAT and VRT (up to a certain limit) on the purchase of an adapted car for transport of a person with specific severe and permanent physical disabilities, payment of a Fuel Grant, and an exemption from Motor Tax.
To qualify for the Scheme an applicant must be in possession of a Primary Medical Certificate. To qualify for a Primary Medical Certificate, an applicant must satisfy one of the following conditions:
- be wholly or almost wholly without the use of both legs;
- be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs;
- be without both hands or without both arms;
- be without one or both legs;
- be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg;
- have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.
The Scheme represents a significant tax expenditure. Between the Vehicle Registration Tax and VAT foregone, and the fuel grant, the scheme cost €65m in each of 2016 and 2017, rising to €70m in 2018. This figure does not include the revenue foregone in respect of the relief from Motor Tax provided to members of the Scheme.
I understand and fully sympathise with any person who suffers from a serious physical disability and can’t access the scheme under the current criteria. However, given the scope and scale of the scheme, any possible changes to it can only be made after careful consideration, taking into account the existing and prospective cost of the scheme as well as the availability of other schemes which seek to help with the mobility of disabled persons, and the interaction between each of these schemes.
Accordingly, I have no plans to amend the qualifying medical criteria for the Disabled Drivers and Disabled Passengers Scheme at this time.
54. Deputy Marc MacSharry asked the Minister for Finance the number of second-hand private vehicles imported here from the United Kingdom in each of the past five years in tabular form. [35420/19]
View answer55. Deputy Marc MacSharry asked the Minister for Finance the number of valuation tests carried out by the National Car Testing Service on second-hand private vehicles imported from the United Kingdom in each of the past five years in tabular form. [35421/19]
View answerI propose to take Questions Nos. 54 and 55 together.
I am informed by Revenue that the numbers of used Category A vehicles registered in Ireland from 2014-to date, having previously been registered in the UK, are as follows:
|
Year |
Total used VRT category A importations from UK |
|
2019 to end July |
60,289 |
|
2018 |
97,511 |
|
2017 |
91,386 |
|
2016 |
69,541 |
|
2015 |
45,495 |
|
2014 |
52,468 |
The registration figures relate to cars, SUVs and similar vehicles and include registrations completed by private individuals and authorised motor dealers.
Under the provisions of section 133, Finance Act 1992, all vehicles, both new and used, are assigned a value by Revenue that is called the open market selling price (OMSP). The OMSP is the price, inclusive of all taxes and duties, that a vehicle might reasonably be expected to fetch on a first arm’s length sale in the open market of the State by retail. Every vehicle is also assigned a statistical code by Revenue. The statistical code contains data particular to a vehicle such as the make, model and version and the OMSP. When a previously registered vehicle is declared for registration the OMSP taken from the statistical code is depreciated by Revenue in line with the age, mileage and condition of the vehicle. This depreciated value is then used by Revenue for the purposes of applying the tax.
Examination of cars at the NCTS Centres is carried out on Revenue’s behalf by the NCTS operators, Applus. However, the assignment of vehicle values is a function carried out by Revenue.
56. Deputy Margaret Murphy O'Mahony asked the Minister for Finance his plans to provide exemptions to islanders to use tractor diesel for boats used for personal use particularly in circumstances in which they are returning to the island when the ferries have ceased with crossings; and if he will make a statement on the matter. [36319/19]
View answer152. Deputy Michael Collins asked the Minister for Finance the provision made for persons using private pleasure craft such as, boats, sea crafts and so on to access their island homes on a regular basis when the impending changes to the law regarding the use of marked gas or oil or MGO in private pleasure craft is implemented from 1 January 2020; and if he will make a statement on the matter. [36483/19]
View answerI propose to take Questions Nos. 56 and 152 together.
I take it that the reference ‘tractor diesel’ in Parliamentary Question number 36319/19 is referring to Marked Gas Oil, commonly known as MGO or green diesel. MGO is diesel that has been marked with fiscal markers to indicate that it has been released for consumption at a reduced rate of taxation. Council Directive 95/60/EC on the fiscal marking of gas oil and kerosene sets out the legal framework for the use of a common fiscal marker across the EU. It obliges all Member States to ensure that fuel released for consumption at a reduced rate of taxation is marked with the appropriate Euromarker and that controls are in place to ensure that such marked fuel is not used improperly, i.e. for non-relieved purposes.
MGO that is used for a relieved purpose, such as in an agricultural tractor, is subject to Mineral Oil Tax (MOT) at a reduced rate of €102.28 per 1,000 litres. Diesel that is used as a fuel in road vehicles is subject to MOT at the standard rate of €479.02 per 1,000 litres. A full relief from MOT for fuel used in commercial sea navigation is provided for in Section 100(2)(a) of Finance Act 1999. This exemption from taxation for fuel used for commercial navigation is mandatorily prescribed in Council Directive 2003/96/EC on the taxation of energy products and electricity (the Energy Tax Directive).
Commercial sea navigation includes commercial sea-fishing, the carriage of goods or passengers or the supply of services for a consideration, and navigation for public authority purposes. As fuel used for commercial navigation is exempt from taxation, MGO may legitimately be used for this purpose. Where the reduced rate of taxation of €102.28 per 1,000 litres has been paid, the entity using the fuel for commercial navigation may apply to Revenue for a repayment.
Fuel used for navigation for non-commercial purposes (defined in EU and national legislation as private pleasure navigation) is subject to MOT at the standard rate of €479.02 per 1,000 litres. I am taking it that the Deputy’s reference to ‘boats used for personal use’ in Parliamentary Question 36319/19 means private pleasure navigation. Section 97A of Finance Act 1999 allows the use of MGO for private pleasure navigation subject to the owner of the craft submitting an annual return to Revenue and paying the difference between the MGO reduced rate of MOT and the standard rate that applies to private pleasure navigation. This means that where MGO is used for private pleasure navigation the owner must pay €376.74 per 1,000 litres of fuel used, €376.74 being the difference between €479.02 (the standard rate of MOT that applies to private pleasure navigation) and €102.28 (the reduced rate for MGO used for relieved purposes).
In 2013 the European Commission raised certain questions in relation to the arrangements provided for in Section 97A of Finance Act 1999. The Commission questioned whether the arrangements constituted a proper implementation of the Energy Tax Directive and whether they adhered to the requirements of Directive 95/60 on fiscal marking of gas oils and kerosene. In 2014 the Commission formally requested Ireland, by way of reasoned opinion, to amend its national legislation to ensure that MGO could no longer be used in private pleasure craft. In the absence of a satisfactory response the matters were referred to the Court of Justice of the European Union (CJEU). In October 2018 the CJEU declared that Ireland had not applied the minimum level of taxation for motor fuels and was in breach of the Energy Tax Directive. The Court further declared that as the use of marked fuel in private pleasure craft had been permitted, where there is no entitlement to an exemption or reduction, Ireland had breached Directive 95/60 on the fiscal marking of gas oils and kerosene.
Ireland has notified the Commission that it accepts the judgement of the Court and has undertaken to amend the relevant provisions of excise law. On this basis, I intend to bring forward amending legislation in Finance Bill 2019, to the effect that the use of MGO for private pleasure navigation in the State will no longer be permissible. Fuel used for private pleasure navigation will continue to be subject to the standard rate of MOT. It is important to note that the use of MGO for commercial navigation will continue to be permitted and there will be no change to the exemption from MOT for fuel used for commercial navigation.
57. Deputy Niall Collins asked the Minister for Finance if his attention has been drawn to the fact that vehicles can have ownership registered to persons under 17 years of age and minors and also to fake names with bogus addresses and that in many instances these vehicles are being used in criminal and illegal activity; his plans to address same; and if he will make a statement on the matter. [36723/19]
View answerI am informed by Revenue that the current legislation governing the registration of vehicles, provided for in Finance Act 1992, Part II, Chapter IV. Section 131(2), does not specify a minimum age for owners.
The question of persons using fake names and bogus addresses to acquire a vehicle for illegal activities is a law and order issue.
58. Deputy Richard Boyd Barrett asked the Minister for Finance the estimated amount of revenue generated by applying the financial transactions tax currently applied in a number of EU countries to financial transactions here. [34713/19]
View answerI am advised by the Revenue Commissioners that it is not possible to accurately estimate from data held by Revenue the yield of a financial transactions tax. The Deputy may be interested to note, however, that the yield from the Irish stamp duty of 1% on transactions in shares, stocks and marketable securities was €420.7m in 2018 and €425.3m in 2017.
59. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 194 of 11 July 2019, the number of the 57 credit institutions and 59 insurance firms from the UK or Gibraltar that have applied for or have already received authorisation from the Central Bank which would enable them to continue to do business here in the event of a disorderly Brexit; the value of the business done or the market share of firms that have not to-date sought authorisation from the Central Bank; the exposure here in this regard in the event of a disorderly Brexit; and if he will make a statement on the matter. [34812/19]
View answerSince the UK voted to leave the EU, the Central Bank has instructed firms on the need to have appropriate contingency plans in place to ensure continuity of business and to address key risks that may arise from Brexit.
In relation to credit institutions, as at end July, the majority of the 57 credit institutions selling financial products and services from the UK and Gibraltar to Ireland, are implementing plans to mitigate the risks to Irish customers. However, some risks to customers still remain including disruption / discontinuation of services or, where firms engage in unauthorised activity, lack of access to the Irish Consumer Protection Framework or the Financial Services and Pensions Ombudsman. While the Central Bank is not the home regulator for these credit institutions, through continued engagement with both credit institutions, the home regulator and subsequent analysis, the Central Bank believes that the exposure is quite small. Nonetheless, the Central Bank will continue to press credit institutions to continue to minimise this risk. The Central Bank will also consider the use of their regulatory powers on a case-by-case basis if a firm continues to conduct business in Ireland without the required authorisation.
In relation to how many credit institutions have applied for authorisation from the Central Bank. The Central Bank does not publish data on the number of applications for authorisation received. The Central Bank does however publish a list of firms that are granted authorisation by them on their public Registers on their website (http://registers.centralbank.ie/DownloadsPage.aspx ).
In relation to the information sought on credit institutions in terms of the value of the business done or the market share of firms that have not, to date, sought authorisation from the Central Bank and the exposure here in relation to same in the event of a disorderly Brexit; I have been informed by the Central Bank that as these firms are prudentially regulated by their home authority and the Central Bank is not the home regulator, they cannot provide such information.
The Central Bank have informed me that there are a number of other ‘appropriate contingency plans’ for credit institutions which would mitigate the risks to Irish customers in the event of a disorderly Brexit, including receiving authorisation from another EEA Member State; continuing to service Irish customers where the law allows for this; transferring the book of business to a regulated entity or closing accounts.
It is the responsibility of each firm to satisfy itself, including through obtaining advice from its legal advisors, of its licensing and regulatory obligations under Irish financial services legislation, and (where relevant) seek alternative authorisations. Notwithstanding that primary responsibility, the Central Bank continues to actively engage with financial services firms regarding their Brexit contingency plans and communications to customers. They are also working closely with UK regulatory authorities.
Insurance Firms
In relation to the part of this question that relates to insurance firms, there are some clarification that need to be made. This PQ is a follow on from PQ No. 194 of 11 July 2019 which referenced that the "latest insurance figures report 59 UK firms are actively writing Irish risk on a freedom of movement of services basis". However, this PQ appears to be using this figure of 59 insurance firms as being the number of firms that have applied for or already received authorisation from the Central Bank, this is not the case. Furthermore the PQ of 11 July 2019 requested information on UK firms which was provided (59 UK insurance undertakings) but this PQ refers 59 insurance firms from the UK or Gibraltar.
In that respect, I am advised by the Central Bank that 84 UK and Gibraltar authorised firms wrote Irish non-life and life risk on a Freedom of Service (FoS)/Freedom of Establishment (FoE) basis in 2017.
The total gross written premium (GWP) in 2017 on an FoS and FoE basis was:
- Non-Life: €1.9bn
- Life: €3.6bn
The Central Bank has received the Brexit plans for 82 of the 84 firms (98%) who operated here in 2017.
In relation to the ability of these firms to continue to write Irish risk, should they wish to do so, the plans indicate that 66 firms will or have established an Irish or other EU entity, use fronting arrangements or will apply to the Central Bank to establish a third country branch.
In relation to the other 16 firms, they advised the Central Bank that they had ceased writing Irish risk, were no longer authorised or would cease writing Irish risk. These firms will rely on the temporary run-off regime for existing contracts.
These firms accounted for the following percentage of 2017 gross written premium (GWP):
- UK Non-life 2017 GWP Less than 1%
- UK Life 2017 GWP 27%
- Gibraltar Non-life 2017 22%.
These firms did not write any specific specialty or niche line of business.
Finally, the Deputy will be aware that my Department and the Central Bank have worked closely to protect customers of insurance products in event of a “no deal” Brexit. As I mentioned briefly above, in that regard, provisions in the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019 allow for a temporary run-off regime, which will allow certain UK and Gibraltar insurers and brokers to continue to service existing insurance contracts with Irish policyholders in the event of a “no deal’’ Brexit.
60. Deputy Michael McGrath asked the Minister for Finance the number of instances and the value of tax involved in recent years in which the large cases division of the Revenue Commissioners issued reassessments of the amount of tax due; the circumstances in which such reassessments may arise; if this only arises in cases in which new information comes to light; and if he will make a statement on the matter. [34814/19]
View answerI am advised by Revenue that Large Cases Division was split into two Divisions in May 2018. The new Divisions are: Large Corporates Division (LCD) and Large Cases-High Wealth Individuals Division (LC- HWI).
The following table below, which reflects the combined LCD and LCD-HWI, sets out the number of instances where an original assessment was amended for the 4 years 2015 to 2018. The Table also sets out the increase in tax liability arising from the amended assessments.
|
Year |
Number of amended assessments |
Amount of original assessments (€ billion) |
Increase in liability from amending the assessments (€ billion) |
Total (€ billion) |
|
2018 |
915 |
€4.99 |
€2.35 |
€7.34 |
|
2017 |
664 |
€2.49 |
€0.26 |
€2.75 |
|
2016 |
458 |
€1.85 |
€0.07 |
€1.92 |
|
2015 |
337 |
€1.45 |
€0.23 |
€1.68 |
|
Total |
2374 |
€10.78 |
€2.91 |
€13.69 |
Revenue has confirmed that a significant portion of the increased liabilities arising from the amended assessments set out in the table are currently under appeal to the independent Tax Appeals Commission. Revenue has also confirmed that there is no relationship between the year in which the assessment is amended and the tax year or accounting period to which the liability relates.
The circumstances where assessments may be amended include:
- The outcome of a Revenue audit or other compliance intervention.
- A disclosure by the taxpayer that the original assessment was incorrect (a disclosure may be entirely unprompted or may be prompted following the receipt of a letter from Revenue indicating that it is going to start an audit or other compliance intervention).
- Where a tax return contains an ‘expression of doubt’ on a tax issue and Revenue subsequently disagrees with the position taken.
- Where an additional tax liability is identified following discussions between a taxpayer and Revenue on a technical interpretation.
61. Deputy Michael McGrath asked the Minister for Finance the amount collected to date as part of the Motor Insurers Insolvency Compensation Fund; his plans for the fund; when collections are expected to cease; and if he will make a statement on the matter. [34817/19]
View answerThe Motor Insurers Insolvency Compensation Fund (MIICF) is an ex-ante fund which has been set up to collect contributions from motor insurers in order to fund the increase in compensation for third party motor claims from 65% to 100% arising from a motor insurer insolvency. This change was introduced by the Insurance (Amendment) Act 2018 and became operational on 1 December 2018. What it means in practical terms is that compensation levels payable from the Insurance Compensation Fund (ICF) for third party motor insurance claims as a result of a motor insurer insolvency are aligned with the compensation levels paid out by the Motor Insurance Bureau of Ireland (MIBI) where a motorist is in a collision with an unidentified or uninsured driver.
The 2018 Act requires motor insurers to contribute an amount equivalent to 2% of gross motor insurance premiums annually to the MIICF until it reaches €150m, and thereafter a rate of 1% until it meets its target level of up to €200 million, when contributions cease. MIBI is required to invest these monies prudently to ensure that they are available to recoup the ICF for 35% of any future third party motor insurance claim which it is required to pay.
Department of Finance officials have been engaging closely with MIBI in relation to their new role. On the 30th July MIBI submitted to the Minister the ‘Motor Insurers Insolvency Compensation Fund Annual Report for the year ended 31st December 2018’. This has been laid before the Houses of the Oireachtas. At end-December 2018, following one month of contributions made to it by motor insurers, the total contributions made by members equalled €2,498,972.
It is not possible to say exactly when contributions will cease as that will depend on amongst other things the volume of gross motor insurance premiums written in a year and whether there are any calls upon the fund. However, if we were to base our projections on the amount of just under €2.5 m collected for December 2018, this would result in an annual collection of €30m a year, which means after 5 years, the deduction rate would fall to 1%. Therefore another 3 to 4 years of collection at this lower level would be required before the €200m threshold was crossed. This would suggest a period of 8 to 9 years before contributions cease in a steady state scenario, and assuming no call upon the fund during this period.
62. Deputy Michael McGrath asked the Minister for Finance the name of each person employed as an adviser or special adviser to him and the Ministers of State in his Department; the salary of each in tabular form; and if he will make a statement on the matter. [34846/19]
View answerI wish to inform the Deputy that Ministerial appointments in the Department of Finance are made in line with “Instructions to Personnel Officers - Ministerial Appointments for the 32nd Dáil” which include “Guidelines on staffing of Ministerial offices” issued by the Department of Public Expenditure and Reform. The information on Special Advisers in my Department, requested by the Deputy are shown in the following table.
|
Minister or Minister of State |
Name of Special Adviser |
Salary |
|
Paschal Donohoe, Minister for Finance and Public Expenditure & Reform |
Deborah Sweeney |
€101,114 = 5th point Principal Officer (Standard) PPC. The cost of this post is shared equally with the Department of Public Expenditure & Reform. |
|
Paschal Donohoe, Minister for Finance and Public Expenditure & Reform |
Ed Brophy |
€101,114 = 5th point Principal Officer (Standard) PPC |
|
Michael D'Arcy, Minister of State (with special responsibility for Financial Services and Insurance) |
Caroline Hofman |
€67,659 = 1st point Assistant Principal (Standard) PPC |
Special Advisers are appointed under Section 11 of the Public Service Management Act 1997. A Special Adviser to a Minister or to a Minister of State, as in the case may be, shall
(a) assist the Minister or Minister of State, as the case may be, by –
(i) providing advice,
(ii) Monitoring, facilitating and securing the achievement of the Government objectives that relate to the Department, as requested by the Minister or the Minister of State, as the case may be, and
(iii) Performing such other functions as may be directed by the Minister or the Minister of State, as the case may be that are not otherwise provided for in this Act and do not involve the exercise of any specific powers conferred on the Minister or the Minister of State as the case may be or any other office holder by or under any other Act.
The appointments of Advisers are kept under review given the breath of my responsibilities across two Departments.
63. Deputy Michael McGrath asked the Minister for Finance if there are penalties or fines for financial entities or persons operating here without Central Bank authorisation; the number of warnings issued by the Central Bank in each year since 2015 for companies operating without such authorisation; the value of fines imposed in the companies operating without authorisation; and if he will make a statement on the matter. [34869/19]
View answerI am informed by the Central Bank that a monetary penalty can be imposed by a court on an unauthorised provider of financial services, if it is convicted of operating in the absence of authorisation. Depending on the relevant Act/Statutory Instrument, the monetary penalty varies.
Unlike entities that are authorised by the Central Bank, unauthorised entities are not subject to the Central Bank’s Administrative Sanctions Procedure (‘ASP’) regime and associated sanctioning powers.
The Central Bank does not have the power to impose any fines on such entities, however, fines may be imposed on an entity operating in the absence of authorisation following criminal conviction by a Court. There were no criminal convictions in the years since 2015.
The Central Bank publishes a list of unauthorised firms in respect of whom warning notices have been published at the following link:
https://www.centralbank.ie/regulation/how-we-regulate/authorisation/unauthorised-firms/search-unauthorised-firms.
The number of unauthorised providers of financial services published on the Central Bank’s list of unauthorised firms for each year since 2015 is provided below:
2015: 11
2016: 19
2017: 20
2018: 30
2019: 31 (as at end August 2019).
64. Deputy Michael McGrath asked the Minister for Finance the estimated full-year cost of allowing capital gains on Employment and Investment Incentive, EII, shares to be capital gains tax applicable rather than income tax applicable; and if he will make a statement on the matter. [34870/19]
View answer65. Deputy Michael McGrath asked the Minister for Finance the estimated full-year cost of allowing capital losses on Employment and Investment Incentive, EII, shares to be allowed for capital gains tax purposes; and if he will make a statement on the matter. [34871/19]
View answer66. Deputy Michael McGrath asked the Minister for Finance the estimated full-year cost of introducing a scheme for microenterprises similar to the seed enterprise investment scheme in the UK; and if he will make a statement on the matter. [34889/19]
View answer68. Deputy Michael McGrath asked the Minister for Finance if under the general block exemption regulation, GBER, it is possible to loosen the connected person restrictions for the scheme; the estimated full-year cost of implementing a 30% limit by which a person is only deemed connected if they or an associate owns more than 30% of the company; and if he will make a statement on the matter. [34927/19]
View answerI propose to take Questions Nos. 64 to 66, inclusive, and 68 together.
With regard to the Deputy's proposal to allow capital gains on Employment and Investment Incentive (EII) shares to be capital gains tax applicable rather than income tax applicable, the tax treatment of gains on the disposal of EII shares depends on how those shares are disposed of and may be subject to either Income Tax or Capital Gains Tax (CGT), depending on whether the shares are disposed of to a third party or through buyback of the shares by the relevant company.
Revenue have advised me that it is not possible to differentiate the gains realised from a disposal of EII shares separately to other gains on tax returns, nor is it possible to separately identify income or Income Tax specifically associated with the disposal of EII shares. Therefore, it is not possible to provide an estimate of the tax cost of applying CGT to all gains associated with EII shares.
Regarding allowing capital losses on EII shares to be allowed for capital gains tax purposes, I am advised by Revenue that information in respect of losses on EII shares are not separately available on tax returns and therefore an estimate of the tax cost cannot be provided.
Regarding the Deputy's proposal of introducing a scheme for microenterprises similar to the Seed Enterprise Investment Scheme (SEIS) in the UK, I am advised by Revenue that this measure cannot be costed as there is no basis from tax return data on which to estimate uptake of a scheme similar to the SEIS.
However, it should be noted that in 2019, I brought forward the Start-up Capital incentive (SCI) for start-up micro-enterprises (an enterprise which employs fewer than 10 persons and whose annual turnover and/or annual balance sheet total does not exceed €2 million) which is, in many respects, similar to the UK Seed Enterprise Investment Scheme. In addition, SCI specifically takes account of the reduced restrictions applied in the General Block Exemption Regulations to connected persons which otherwise apply in the case of larger SMEs.
With regard to the Deputy's proposal in relation to connected person restrictions, The General Block Exemption Regulations (‘GBER’) have direct effect across all member states. Ireland does not have any discretion in its implementation and, therefore, it is not possible to loosen the connected person restrictions.
By way of a general comment, the Deputy will be aware that my Department has undertaken a consultation process with stakeholders in relation to a number of tax incentives which may benefit SMEs, including EII. Specifically in relation to EII, the work builds on the changes made to the incentive in Finance Act 2018. The intention is that, on foot of the issues raised and analysis of the incentive by my Department, proposals will be brought forward for my consideration in the context of the Budget and Finance Bill process this year with the aim of ensuring that EII operates in an efficient and effective manner.
67. Deputy Michael McGrath asked the Minister for Finance the estimated full-year cost of increasing the entrepreneurial relief for capital gains tax to 12.5% and removing the lifetime limit of €150,000; and if he will make a statement on the matter. [34895/19]
View answerIt is assumed the Deputy is referring to increasing the capital gains tax rate in respect of the revised CGT Entrepreneur Relief from 10% to 12.5% and removing the lifetime limit which is currently €1 million.
I am advised by Revenue that on the basis of tax returns associated with 2017, the estimated tax gain from increasing the tax rate in respect of Entrepreneurial relief to 12.5 per cent is in the region of €9 million.
In relation the tax cost of abolishing the limit, the estimated tax cost of various changes to the limit are available on page 14 of the Revenue Ready Reckoner, which is available at https://www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf. The tax cost of abolishing the limit would exceed these published costs.
It should be noted that these gains and costs do not take into account the impact of any behavioural change as a result of the proposals. Under the assumption of no behavioural change, the Ready Reckoner shows that increasing the lifetime to €15m could cost around €84m. The tax cost of completely abolishing the lifetime limit would exceed this, but it is not possible to accurate estimate the cost based on the available data.
69. Deputy Michael McGrath asked the Minister for Finance the proportion of the cost of the research and development tax credit that arises from such services being outsourced to third parties by the company availing of the credit; and if he will make a statement on the matter. [34928/19]
View answer70. Deputy Michael McGrath asked the Minister for Finance the proportion of the cost of the research and development tax credit that arises from such services being outsourced to universities by the company availing of the credit; and if he will make a statement on the matter. [34929/19]
View answerI propose to take Questions Nos. 69 and 70 together.
The Research and Development (R&D) Tax Credit, as set out in section 766 of the Taxes Consolidation Act 1997, allows companies claim a 25% tax credit in respect of expenditure incurred on qualifying R&D activities. Companies may be eligible to claim the R&D tax credit in respect of some outsourced R&D activities and there are different restrictions which apply to outsourced activities depending on whether they are outsourced to a third party or to a university or higher education institute.
Where a company outsources some of its R&D activities to third-parties (who may carry out the R&D in Ireland or anywhere else in the world), the amount of expenditure on outsourcing in respect of which they may claim the R&D tax credit is restricted to the higher of €100,000 or 15% of the R&D expenditure incurred.
Where a company outsources some of its R&D activities to a university or higher education institute (who may be located in Ireland or in an EU or EEA State), the amount of expenditure on outsourcing in respect of which they may claim the R&D tax credit is restricted to the higher of €100,000 or 5% of the R&D expenditure incurred.
I am informed by Revenue that information in respect of the tax cost of the research and development tax credit is published on their website at https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/r-and-d-tax-credits.aspx.
It is not possible to separately identify the cost associated with services outsourced to third parties or to universities and higher education institutes. Revenue have introduced a question in the CT1 corporation tax return form to collect data on R&D outsourcing by companies. However, Revenue advises that this is an optional field, therefore robust data is not currently available in respect of these distinct elements of the credit.
71. Deputy Michael McGrath asked the Minister for Finance the estimated full-year cost of removing the restriction to 100% of the employee’s annual emoluments for the key employee engagement programme, KEEP; and if he will make a statement on the matter. [34930/19]
View answer72. Deputy Michael McGrath asked the Minister for Finance the estimated full-year cost of removing the restriction to 100% of the employee’s annual emoluments for the key employee engagement programme and to introduce a flat €250,000 limit over three years; and if he will make a statement on the matter. [34931/19]
View answer74. Deputy Michael McGrath asked the Minister for Finance the estimated full-year cost of removing the restriction on employer share buy-backs under the KEEP scheme; and if he will make a statement on the matter. [34933/19]
View answer75. Deputy Michael McGrath asked the Minister for Finance the estimated full-year cost of introducing a safe harbour approach to share valuation for early stage companies availing of the KEEP scheme; and if he will make a statement on the matter. [34934/19]
View answer76. Deputy Michael McGrath asked the Minister for Finance the estimated full-year cost of enabling a worker to retain KEEP options when they move to another company within the company group; and if he will make a statement on the matter. [34935/19]
View answerI propose to take Questions Nos. 71, 72 and 74 to 76, inclusive, together.
The Deputy is seeking information on the estimated annual cost of a number of different policy changes to the Key Employee Engagement Programme. Unfortunately, the position is that base data are not available which enable the information sought to be provided on any kind of reliable basis. However, as regards the specific questions raised, the following paragraphs seek to reply to these as far as possible.
With regard to the Deputy's proposal to remove the restriction to 100% of the employee’s annual emoluments for the Key Employee Engagement Programme (KEEP) and the Deputy's follow-on proposal to remove the restriction whilst also introducing a flat €250,000 limit over three years, I am advised by Revenue that the cost of the measures proposed would depend on the potential increased uptake of the KEEP. As Revenue have no way to account for a behavioural response by employers and employees, it is not possible to provide a cost estimate for this measure.
Furthermore, as such share options are granted at market value, there is no tax event at the date of grant. Any cost arising (in terms of income tax relief provided) will only be known when and if such share options are exercised. There is no guarantee that all options granted will be exercised.
Regarding the Deputy's proposal to remove the restriction on employer share buy-backs under the KEEP scheme, I am advised by Revenue that there are no specific restrictions on employer share buy-backs contained within the KEEP legislation. Also, there is no indication on the potential scale of share backs effected should any legislative change be introduced. It is therefore not possible to provide a cost estimate in relation to such a proposal.
With regard to the Deputy's proposal to introduce a safe harbour approach to share valuation for early stage companies availing of the KEEP scheme, Revenue advise me that there is no basis on which to cost the measure outlined.
Finally, regarding the Deputy's proposal to enable a worker to retain KEEP options when they move to another company within the company group, I am informed by Revenue that, owing to the uncertainty as to the numbers of KEEP options that will be exercised and the lack of any information on the likely numbers of relevant employees changing employments within groups, there is no basis on which to cost the measure outlined.
