Written Answers Nos. 253-267
253. Deputy Brendan Griffin asked the Minister for Finance if the stay and spend scheme will be extended to a bed and breakfast (details supplied) in County Kerry that is not registered with Fáilte Ireland; and if he will make a statement on the matter. [28874/20]
View answerThe Stay and Spend scheme provides tax relief by means of a tax credit at the rate of 20% on qualifying expenditure of up to €625 per person, or €1,250 for a jointly assessed couple, in respect of 2020 and 2021. The tax credit is worth a maximum of €125, or €250 for a jointly assessed couple.
The purpose of the Stay and Spend scheme is to incentivise taxpayers to support registered/accredited providers of accommodation and/or food during the off-season, thus providing support to a particularly vulnerable sector that will continue to be constrained by public health limitations.
With regard to the Deputy's question, for the purposes of this scheme, holiday accommodation premises must be registered or listed with Fáilte Ireland. Certain holiday accommodation providers are legally required to register with Fáilte Ireland. This includes hotels, guest houses, holiday hostels, youth hostels, caravan and camping parks and self-catering properties. There are other holiday accommodation providers who are not legally required to register with Fáilte Ireland but may choose to be voluntarily listed. The process for registration or listing with Fáilte Ireland requires the service provider to make a self-declaration that their business complies with all statutory requirements. For those holiday accommodation providers who apply to be listed, the voluntary application process is very simple and quick and only incurs a nominal fee of €1 for both 2020 and 2021.
Guidance can be found on Fáilte Ireland’s website. Information on the process for completing a registration or listing with Fáilte Ireland is available in Revenue’s Tax and Duty Manual Part 15-01-47, available at https://revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-47.pdf. If further assistance is required, Fáilte Ireland’s customer support team can be contacted at customersupport@failteireland.ie or via telephone on 1800 242 473.
254. Deputy John Brady asked the Minister for Finance his plans to make changes to the diesel rebate scheme; and if he will make a statement on the matter. [28111/20]
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.
255. Deputy Niall Collins asked the Minister for Finance his views on a practice (details supplied) in relation to insurance; and if he will make a statement on the matter. [28134/20]
View answerAs Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. Neither I, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies 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, neither I nor the Central Bank are in a position to direct insurance companies as to the pricing level or terms or conditions that they should apply in individual cases.
It would appear that the details supplied are referring to an arrangement whereby the insurance policy is being paid by instalments, and that this is being facilitated through a financing arrangement as part of the insurance contract. In such cases, a consumer may have to pay an additional amount of interest on the premium amount over the period. It is my understanding that such arrangements are relatively common, and that they provide additional financing options for consumers who may not wish to pay for the insurance contract upfront.
In situations where a person is not satisfied with the actions of an insurance provider in relation to the service provided, it is advisable that that person make a complaint to the firm's internal complaint resolution process. The Consumer Protection Code requires that, if after 40 days the complaint has not been resolved to the customer’s satisfaction, the regulated entity must inform the consumer that they may refer their complaint to the Financial Services and Pensions Ombudsman (FSPO). The FSPO is a statutory official who acts as an independent arbiter of disputes which consumers may have with their insurance company or other financial service provider. The FSPO can be contacted either by email at info@fspo.ie or by telephone at 01-567-7000. Investigations by the FSPO are free of charge to the complainant.
In addition to this, Insurance Ireland, the representative body for insurance providers in this country, operates an Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance, which can be accessed at feedback@insuranceireland.eu.
256. Deputy Noel Grealish asked the Minister for Finance the status of current or pending legislation outlawing dual or differential pricing in the insurance market; and if he will make a statement on the matter. [28139/20]
View answerThe Deputy will be aware that differential, or dual, pricing is the practice of quoting two different prices to different customers for the same product or service, even where those customers carry the same risk profile and cost of service. Late last year, the Central Bank of Ireland (CBI) announced that it would carry out a study into dual pricing in the Irish market. Separately, the Deputy will also be aware that the Programme for Government includes a commitment to work to remove this practice from the market and the Bank’s review is an important element of this undertaking.
The CBI’s review is ongoing and is focussing on motor and home insurance. It is being carried out in three phases, and the first of these was completed recently. While I welcome this, I note with concern that the Bank has observed that the majority of firms utilise differential pricing through various techniques and that a failure to recognise and / or acknowledge the practice on the part of some firms has raised significant concerns about their ability to assess its impact on customers. On foot of its findings, the CBI sent a “Dear CEO” letter, on 8 September 2020, to firms to highlight its concerns following this first phase. I now fully expect that firms will respond to these concerns in a positive manner and cooperate with the CBI.
The work of the Central Bank of Ireland is now moving to the next phases of its review, before it makes any final recommendations. On foot of this, I believe that it would be prudent to await the outcome of the review in advance of adopting any particular approach, including in relation to considering any possible steps to legislate to remove the practice of dual pricing. This is undoubtedly a complex issue and will need careful consideration of any potential remedies, and what overall impact they would have on consumers. We need to guard against the risk of unintended consequences in that in attempting to address an issue we don’t create an undesirable knock-on impact elsewhere. This could include dis-encouraging competition or new entrants to the market, all of which is not in Irish consumers long-term interests.
Finally, while I believe the CBI's initial findings demonstrate the need for consumers to shop around when taking out or renewing insurance, I also expect that insurance firms will treat their customers fairly. The recent preliminary findings of the Competition and Consumer Protection Commissions in relation to the motor insurance sector serve to remind us of the importance of insurance generally and the impact of the costs of insurance on consumers and businesses.
257. Deputy Neale Richmond asked the Minister for Finance the status of the review of flat rate expenses being carried out by the Revenue Commissioners; if this review has been impacted by Covid-19; if the Revenue Commissioners can be instructed to not alter tax credits for frontline workers including teachers, shop assistants and other sectors that have made a huge contribution to the fight against the virus on behalf of the public; and if he will make a statement on the matter. [28151/20]
View answerRevenue conducted a comprehensive review of the administratively-based Flat Rate Expenses (FRE) regime in 2018 and 2019. Revenue has advised me that the purpose of the FRE review, which involved engagement with relevant representative bodies, was to ensure that the expenses granted to each employment category remain justified and appropriate to modern day employments and work practices.
Each category of FRE allowance was examined separately in the light of the legislative requirements of section 114 of the Taxes Consolidation Act (TCA) 1997, which provides that expenses are tax deductible only if they are wholly, exclusively and necessarily incurred by the employee in the performance of the duties of his or her employment and are not reimbursed by the employer. Where the FRE amount does not meet the legislative basis for tax deductibility or can no longer be justified, it cannot be expected that FRE amount will be retained.
Outside of the FRE regime, all employees retain their statutory right to claim a deduction under section 114 of the TCA 1997 in respect of an expense incurred wholly, exclusively and necessarily in the performance of the duties of their employment, to the extent which the expenses are not reimbursed by the employer.
Revenue agreed to defer the implementation of any planned changes to the FRE regime, pending the outcome of an examination of a number of policy issues that arose during its review relating to the tax deductibility of expenses of employment. This latter examination was carried out by the Tax Strategy Group (TSG), which is overseen by my Department and which met on 10 September 2020. A TSG paper that sets out the consideration of the policy matters that arose during Revenue's FRE review has now been published as part of the regular Budget process. It is available online at https://assets.gov.ie/86995/006fad3c-ebb5-4b0e-b067-92f8102d6e43.pdf.
Given that the deliberations on the policy matters set out in the TSG continue, it would not be unexpected that any changes to the FRE regime might await the outcome of those deliberations. Similarly, the question of the timing of the introduction of any changes to the FRE regime is solely a matter for Revenue.
258. Deputy Neale Richmond asked the Minister for Finance if he will consider increasing the working from home allowance for the winter months given the costs of heating and so on will be greater during these months; and if he will make a statement on the matter. [28155/20]
View answer282. Deputy Joe Carey asked the Minister for Finance the factors he is considering in creating a tax allowance or credit for those remote working either at home or an alternative location; and if he will make a statement on the matter. [28760/20]
View answerI propose to take Questions Nos. 258 and 282 together.
The 2020 Programme for Government: Our Shared Future contains several commitments related to working from home, including an examination of the “feasibility and merits of changing tax arrangements to encourage more people to work remotely”, the responsibility for which falls to my Department. There is also a commitment to the development of a ”national remote working strategy” and to that end, a Remote Working Strategy Inter-Departmental Group has been established. Officials from my Department are included in this group which is chaired by the Department of Business, Enterprise and Innovation. A number of issues are being considered as relevant to these commitments, the results of which will be made public in due course.
In terms of the current tax treatment of the costs associated with working from home, I would note that any such costs incurred wholly and exclusively for the purposes of the business by an employer (for example, the provision of equipment) may be deducted by the employer in the normal course of calculating the tax liability of their business.
From the perspective of the individual employee, there is no specific tax credit available to employees where they work from home. The consideration of the introduction of any such credit would need to balance a number of factors including issues of equity, noting that not every worker is able to work remotely or from home for a variety of reasons including the nature of their work and also the nature of their home environment.
However, I am advised by Revenue that where e-workers incur certain extra expenditure in the performance of their duties of employment remotely or from home, such as additional heating and electricity costs, there is a Revenue administrative practice in place that allows an employer to make payments up to €3.20 per day to such employees, subject to certain conditions, without deducting PAYE, PRSI, or USC.
Revenue have confirmed that PAYE workers using their primary residence as a workplace during Covid-19 restrictions qualify as e-workers for the purposes of this practice.
Revenue also advise that the provision of equipment, such as computers, printers, scanners and office furniture by the employer to enable the employee work from home will not attract a Benefit-In-Kind charge, where the equipment is provided primarily for business use. The provision of a telephone line, broadband and such facilities for business use will also not give rise to a Benefit-in-Kind charge, where private use of the connection is incidental.
Where an employer does not pay €3.20 per day to an e-worker, I am advised that employees retain their statutory right to claim a deduction under section 114 of the Taxes Consolidation Act (TCA) 1997 in respect of actual vouched expenses incurred wholly, exclusively and necessarily in the performance of the duties of their employment. PAYE employees are entitled to claim costs such as additional light and heat in respect of the number of days spent working from home, apportioned on the basis of business and private use.
PAYE workers can claim e-working expenses by completing an Income Tax return at year end. Revenue advise that the simplest way for taxpayers to claim their e-working expenses and any other tax credit entitlements is by logging into the myAccount facility on the Revenue website.
Finally, I am advised that Revenue have published detailed guidance on e-working arrangements in their Tax and Duty manual TDM 05-02-13 e-Working and Tax.
259. Deputy Matt Carthy asked the Minister for Finance his plans to increase the dependent relative tax credit in line with the incapacitated child tax credit as requested by an organisation (details supplied); and if he will make a statement on the matter. [28243/20]
View answer260. Deputy Matt Carthy asked the Minister for Finance if eligibility for the home carer tax credit will be extended to include single working carers; and if he will make a statement on the matter. [28244/20]
View answer261. Deputy Matt Carthy asked the Minister for Finance his plans to allow carers to claim tax relief on the cost of employing a care worker while also claiming the dependent relative incapacitated child tax credit; and if he will make a statement on the matter. [28245/20]
View answerI propose to take Questions Nos. 259 to 261, inclusive, together.
Consistent with the Programme for Government: Our Shared Future, it is not the intention to increase the value of income tax credits or bands in Budget 2021.
However, the Deputy has raised three separate but related issues regarding important measures in the tax code which support caring for people in vulnerable circumstances.
In relation to the suggestion to extend eligibility for the Home Carer Tax Credit to include single workers, I would note that this credit was specifically introduced in Finance Act 2000 in the context of a planned move to full individualisation of the Irish income tax system to ensure a balance was maintained for married one-income families where one spouse works primarily in the home caring for children, the aged or incapacitated persons. The Home Carer Tax Credit is therefore only available to jointly assessed couples in a marriage or civil partnership, and it is not available to single persons as the issues that the credit sought to address do not arise in their circumstances. Instead, the Single Person Child Carer Credit of €1,650 (and an increased rate band of €4,000) is available to single parents (whether widowed, separated, deserted or a single parent) with caring responsibilities for a dependent child who is under 18 years or, if over 18, is an incapacitated child who satisfies the incapacitated child tax credit criteria.
As regards the question of claiming tax relief on the cost of employing a care worker while also claiming the Dependent Relative or Incapacitated Child Tax Credit, the position is that there is no restriction on this and that such tax relief is available at the individual’s marginal rate of tax. However, there is an anti-avoidance provision in the legislation which prohibits claiming dependent relative or incapacitated child tax credits in respect of a person where that person is employed as the carer.
On the proposal to increase the Dependent Relative Tax Credit to the same level as the Incapacitated Child Credit, each of these credits is targeted at different issues and different personal circumstances and as a result are set at different levels:
- The Dependent Relative Tax Credit is a modest tax credit of €70, which can be claimed by an individual who maintains, at his or her own expense, a relative who is unable to maintain himself or herself.
- The Incapacitated Child Tax Credit is a tax credit of €3,300, which can be claimed by a person in respect of a child who is permanently incapacitated either physically or mentally from maintaining himself or herself and had become so before reaching 21 years of age or finishing full-time education. The person must either be the parent of the child, have custody of the child or maintain the child at their own expense.
If the Dependent Relative Tax Credit was increased some 47-fold by €3,230 to €3,300 it is estimated to cost an additional €194m in a full year. The values of the credits have been set at levels that are intended in part to reflect the economic burden that arises from the condition of the person being cared for, as well as the resources available to pay for their care.
Finally, it is noted that these credits apply in addition to other various supports from other parts of Government, including the Department of Social Protection, the Department of Health and the Department of Children, Disability, Equality and Integration, that assist those with caring responsibilities.
264. Deputy Ged Nash asked the Minister for Finance if he will provide a copy of all correspondence between an association (details supplied) and his Department, including offices of all Ministers of State under the aegis of his Department, from 1 June 2017 to the 30 September 2020; and if he will make a statement on the matter. [28313/20]
View answerPlease see below a submission received from the Irish Association of Investment Managers (IAIM) dated 31 August 2018 in response to a public consultation related to the development of the strategy for the international financial services sector to 2025, now known as 'Ireland for Finance'.
The remaining correspondence requested by the Deputy is not readily available. I will endeavour for the information requested to be forwarded directly to the Deputy within 14 days.
265. Deputy Fergus O'Dowd asked the Minister for Finance if he will respond to correspondence received (details supplied) in relation to preliminary tax; and if he will make a statement on the matter. [28321/20]
View answerI am advised by Revenue that since the introduction of the pay and file system, self-assessed income taxpayers, including those whose self-assessed liabilities arise from rental income, have been required to pay annually both preliminary tax for the current year and any balance of tax owing for the previous year. The payment is due by 31 October in a year, or later if paying online via the Revenue Online Service (ROS).
The amount of the preliminary tax payment is
- 90% of the current year’s liability;
- 100% of the prior year’s liability; or
- 105% of the tax due for the tax year preceding the immediately previous tax year (often called the ‘pre-preceding year’).
The “pre-preceding year” option only applies to taxpayers paying by direct debit. Taxpayers not paying by direct debit can choose the lower of the other two options.
The other part of the payment – the balance of tax owing for the previous year – is the difference between the liability based on the individual’s self-assessed income tax return, and the preliminary tax paid last year.
Revenue has extended the deadline for customers to file their 2019 self-assessed income tax return and make the appropriate payment in respect of preliminary tax for 2020 and any income tax balance due for 2019. The due date has been extended by four weeks from 12 November 2020 to 10 December 2020. To qualify for the extension, customers must both pay and file through ROS; otherwise the relevant return and payment is due no later than 31 October 2020.
In the correspondence provided, the person seems to think that preliminary tax is a pre-payment of next year’s liability and the preliminary tax system discriminates against the self-assessed taxpayer compared to a PAYE taxpayer. This is not the case; the preliminary tax due this year is a preliminary tax payment for this year, 2020. With the extended deadline this payment is due by 10 December. A PAYE taxpayer will have paid his or her liability through 2020.
In most cases individuals will not be paying the full amount of two years’ income tax liabilities (previous year and current year) at once, unless they paid no preliminary tax in the previous year and based on their self-assessed income tax return they now have a liability for that year.
266. Deputy Paul Kehoe asked the Minister for Finance the number of companies in County Wexford that availed of the wage subsidy scheme; the total amount provided; and if he will make a statement on the matter. [28386/20]
View answerThe Deputy will be aware that the Temporary Wage Subsidy Scheme (TWSS) ceased on 31 August 2020 and was replaced with the Employment Wage Subsidy Scheme (EWSS) from 1 September 2020
I am advised by Revenue that over 2,200 employers in Wexford availed of the TWSS from March to August 2020 and to date 1,300 employers in the county have registered for the EWSS.
Throughout the operation of the TWSS, Revenue has published detailed statistical information on the operation of the scheme and since September has begun to supplement the data with information on the new EWSS, which may be of interest to the Deputy. The combined statistics are available at link: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/number-of-taxpayers-and-returns/covid-19-wage-subsidy-scheme-statistics.aspx .
267. Deputy Paul Kehoe asked the Minister for Finance if he will consider some form of tax relief for the renovation of vacant housing property which will result in the additional availability of dwellings; and if he will make a statement on the matter. [28388/20]
View answerAs the Deputy will be aware, taxation is only one of the policy levers available to the Government through which to boost housing supply. Under my Department's Tax Expenditure Guidelines, the introduction of new tax incentive measures should only be considered in circumstances where there is a demonstrable market failure and where a tax based incentive is more efficient than a direct expenditure intervention.
I have no plans to introduce a relief along the lines suggested by the Deputy, and the question of any potential measures in this area will be kept under review in conjunction with the Minister for Housing, Local Government and Heritage.
