Wednesday, 17 Feb 2021

Written Answers Nos. 136-159

Illicit Trade

Questions (136)

Carol Nolan

Question:

136. Deputy Carol Nolan asked the Minister for Finance if data is available on the amount of illegal drugs seized from persons entering and leaving the State; and if he will make a statement on the matter. [7888/21]

Written answers

Minister for Finance

I am advised by Revenue that the overall number, value and volume of drugs seized by Revenue in 2019 and 2020 is set out in the table in Attachment A.

		No. of Seizures		Quantity		Value
Type of Drug	2019	2020	2019 Kg	2020 Kg	2019 €m	2020 €m
Cannabis (Herbal & Resin)	2,284	5,053	515	1,439	10	28.6
Cocaine, Heroin	231	161	64	123	4.5	10.2
Amphetamines, Ecstasy, Other	7,764	10,500	2,650	3,059	9.1	6
Total	10,279	15,714	3,229	4,621	23.6	44.8

I am assured by Revenue that combatting the smuggling of controlled drugs into and out of this jurisdiction is, and will continue to be, a priority. Revenue’s work against drugs crime is extensive and multi-faceted and is kept under constant review to ensure that it makes the most effective contribution possible to dealing with this societal problem, in the overall framework of the Government’s National Drugs Strategy 2017-2025. Revenue also works closely with national and international partners, including An Garda Siochána, in addressing the challenges and risks of drugs smuggling.

Brexit Issues

Questions (137)

Carol Nolan

Question:

137. Deputy Carol Nolan asked the Minister for Finance if concerns will be addressed that new Irish customs arrangements regarding the importation of goods from the UK have considerably increased the levels of bureaucratisation in relation to the importation process; if he will work to simplify the process; and if he will make a statement on the matter. [7890/21]

Written answers

Minister for Finance

As the Deputy will be aware, since 1 January 2021 the UK has been outside the European Union's Single Market and Customs Union. This means that for the purposes of trade and the movement of goods between the EU and the UK, the UK is now a 3rd country and therefore a range of customs formalities and other regulatory controls apply to goods moving to, from or through the United Kingdom, excluding Northern Ireland.

Customs is an EU competence and Ireland, like all EU Member States, must implement import requirements as set out in the Union Customs Code (UCC), the legal framework for customs rules and procedures in the EU customs territory. Compliance with these rules are essential to maintaining the integrity of the Single Market and the Customs Union. Deficiencies in Ireland’s implementation of the relevant regulatory controls and requirements could have serious consequences for exports from Ireland and their automatic right of free circulation within the European Union.

I know that Revenue fully understands and appreciates that some businesses have experienced and continue to experience difficulties adjusting to the need to comply with the new customs and other regulatory formalities that now apply to trade with Great Britain. Revenue has been working closely with trade both at individual business level and with the range of trade and business representative bodies in order to assist them in meeting the challenges which the UK’s departure from the EU has brought for Irish businesses. Revenue also has a 24/7 presence at Dublin and Rosslare ports and help is also available via the Customs 24/7 telephone helpline (01 738 3685) and via email helpline channels. As part of this active engagement with business Revenue continues to explore with business the opportunities to avail of certain simplifications and facilitations that are available in accordance with the UCC.

The Deputy will be aware that the Government has also provided a range of supports to assist businesses in adapting to the new formalities and procedures that are now in place, including the Ready for Customs Grant scheme and the Clear Customs training programme which are particularly relevant to the challenges referred to by the Deputy.

Finally, I think it is important to note that approx. 75% of all freight movements during January were green routed and permitted to leave the ports without any interaction with Customs or the other regulatory authorities. However, as Great Britain is now a 3rd country, and goods traded with them are subject to sanitary and phytosanitary checks, checks that are essential to public health and safety, it will never be possible for all goods movement arriving into Ireland from Great Britain to be green routed. There will always be a level of documentary or physical examination of goods movements required as part of Ireland’s obligation to protect the Single Market and the Customs Union and the same applies to all other EU Member States importing goods from the UK.

Revenue Commissioners

Questions (138)

Carol Nolan

Question:

138. Deputy Carol Nolan asked the Minister for Finance the number of staff assigned to the Revenue Commissioners' enforcement units at all airports here; and if he will make a statement on the matter. [7891/21]

Written answers

Minister for Finance

I am advised by Revenue that as an integrated tax and customs administration, it deploys resources based on evolving business needs and to tackle any risks as they emerge.

Revenue staff at airports are deployed to a range of trade facilitation, service delivery and enforcement duties. Resources are deployed having regard to changing and evolving passenger and freight movements and the overall risk assessment arising in relation to such movements. At present there are over 220 Revenue staff assigned to our airports.

I am advised that Revenue continues to review and adjust staff deployment in response to business needs, including those arising from the UK’s departure from the European Union (EU).

Covid-19 Pandemic Unemployment Payment

Questions (139, 160, 161, 162, 163, 164, 165, 177, 178)

Fergus O'Dowd

Question:

139. Deputy Fergus O'Dowd asked the Minister for Finance if concerns raised in correspondence by a person (details supplied) will receive a response; and if he will make a statement on the matter. [7929/21]

Pa Daly

Question:

160. Deputy Pa Daly asked the Minister for Finance if he will report on the way in which communications were made to the public relative to taxation on the Covid-19 pandemic unemployment payment scheme for recipients in 2021; and if he will make a statement on the matter. [8668/21]

Patricia Ryan

Question:

161. Deputy Patricia Ryan asked the Minister for Finance the steps he will take to prevent recipients of the pandemic unemployment payment that return to work in 2021 becoming liable in 2021 for the tax due (details supplied); and if he will make a statement on the matter. [8704/21]

Rose Conway-Walsh

Question:

162. Deputy Rose Conway-Walsh asked the Minister for Finance the reason persons are being taxed on a week one basis for more than a one-week period; and if he will make a statement on the matter. [8710/21]

Rose Conway-Walsh

Question:

163. Deputy Rose Conway-Walsh asked the Minister for Finance the reason the tax on the pandemic unemployment payment is taken from the entire gross wage while the top up by the employer was already taxed during 2020; and if he will make a statement on the matter. [8711/21]

Rose Conway-Walsh

Question:

164. Deputy Rose Conway-Walsh asked the Minister for Finance the reason the rate band reductions were applied on tax credit certificates issued on 4 February 2021 when underpayments were not meant to be paid until 2022 commencing over a five year period; the reason no notification was given; and if he will make a statement on the matter. [8712/21]

Rose Conway-Walsh

Question:

165. Deputy Rose Conway-Walsh asked the Minister for Finance the reason the tax credits of workers coming off the pandemic unemployment payment and starting back to work were deleted; and if he will make a statement on the matter. [8713/21]

Réada Cronin

Question:

177. Deputy Réada Cronin asked the Minister for Finance if he will request the Revenue Commissioners to waive taxation arising out of the pandemic unemployment payment given the extraordinary circumstances of the pandemic and the consequent sacrifice and financial suffering endured by persons; and if he will make a statement on the matter. [8832/21]

Réada Cronin

Question:

178. Deputy Réada Cronin asked the Minister for Finance if the Revenue Commissioners will extend over a suitably long period the amount of extra taxation due over pandemic unemployment payments to assist workers and their families; and if he will make a statement on the matter. [8833/21]

Written answers

Minister for Finance

I propose to take Questions Nos. 139, 160 to 165, inclusive, 177 and 178 together.

The Pandemic Unemployment Payment (PUP) is a social welfare payment for workers who have become unemployed due to the COVID-19 pandemic. PUP payments are classified as income supports and are subject to income tax. The taxation arrangements for the PUP were legislated for in Finance Act 2020 which reflects the standard approach to taxation of social welfare type payments, which means they are liable to income tax but exempt from the Universal Social Charge (USC) and Pay Related Social Insurance (PRSI).

The PUP along with the Temporary Wage Subsidy Scheme (TWSS) was introduced in March 2020 as emergency measures to deal with the impact of the COVID-19 pandemic on the economy. The Government objective at that time was to get much needed assistance to employees as quickly as possible. To meet that objective, both subsidies were not taxed in ‘real-time’ in the normal manner, meaning the collection of any tax due was deferred until year end. This approach was based on an expectation at the time that the emergency supports would be short-term in nature, which turned out to not be the case due to the continued prevalence of COVID-19.

In relation to the Deputy's suggestion that I ask Revenue to waive any liabilities arising from the payment of the PUP, questions of equity arise. Other income earners in receipt of comparable “normal wages” are taxable on those wages, in the interest of equity, payments under the PUP are subject to income tax. Furthermore, Revenue is independent in the exercise of its functions.

Revenue have advised me as follows:

The impact of the ‘year-end’ approach is that some PUP and TWSS recipients now have an additional tax liability for 2020. As confirmed by Revenue last September, these liabilities will be collected, interest free, by reducing the employees tax credits over four years, starting in January 2022. Alternatively, an employee can opt to fully or partially pay any additional liability as a single sum through the Payments/Repayments facility in the myAccount service. These arrangements remain in place and are fully available to PUP and TWSS recipients.

When a PUP recipient returns to work, he or she should immediately cease the PUP claim with the Department of Social Protection (DSP). In turn, DSP will notify Revenue that the payment has ceased, and Revenue will then adjust the employee’s tax credits accordingly. It is not the case that the employee is taxed on the full year calculation of PUP, where a return to work has occurred during the year, with a requirement to seek a refund for the overpaid amount (as suggested in Deputy O'Dowd's question). This is purely a mechanism to reflect the fact that the person is in receipt of PUP. For a person who is in receipt of PUP at the start of the year, the weekly amount is annualised on the Tax Credit Cert (TCC), with knock on impacts on the tax credit and standard rate cut off point, as if that person will be on PUP for the full year. When the person comes off PUP, the TCC is amended to reflect the fact that the payment has ceased. A revised instruction (Revenue Payroll Notification) will issue to the relevant employer to reflect the updated position and the revised TCC will issue to the employee via the online myAccount service.

Revenue has published information on the taxation of the PUP at link: www.revenue.ie/en/life-events-and-personal-circumstances/pup-tax-liability/index.aspx, which may be of interest to the Deputies. Revenue has also very clearly set out how the taxation of the PUP and EWSS will occur in 2021.

The replacing of the TWSS with the EWSS from 1 September 2020 and the continuation of both that scheme and the PUP into 2021 has re-established the practice of operating PAYE in the normal (real-time) manner for such payments. However, those people receiving PUP payments in 2021 will only pay tax when they return to work. The mechanism to tax PUP payments is by reducing the recipient’s tax credits and rate bands.

Income tax is normally calculated using the ‘cumulative basis’, which means that for each pay day, all earnings and all tax credits are accumulated, and the tax due is calculated on a year to date basis. This ensures employees pay the correct amount of tax as it falls due. In exceptional circumstances, employees may be placed on the ‘Week 1’ basis (also known as the ‘non-cumulative basis’). This normally occurs where there is a large reduction in tax credits that could cause financial hardship or where there is a lack of information on prior employments within the current tax year. Where employees are placed on a ‘Week 1’ basis, income tax is deducted on a pay-period to pay-period arrangement, without reference to previous pay or tax paid. As such the employee will not suffer a large deduction of tax in a pay-period but will also not receive any refunds that might be due until the ‘cumulative basis’ is implemented. These normal taxing arrangements are operating in respect of PUP payments received by employees in 2021 and are in accordance with the legislation as set down.

Regarding the TWSS, it is important to note that any additional ‘top up payments’ made by employers to employees during 2020 under the TWSS were taxed in the normal (real-time) manner and are generally not included in the year-end arrangement. Top-up payments in addition to the basic subsidy would have very likely given rise to a tax liability, even if only paid over the course of 12 weeks. It was therefore wholly appropriate that PAYE operated in respect of such payments in the normal way as it is did for other earners through the period, with the deduction of income tax and USC in 2020.

Specifically, regarding the taxation of PUP, the following points are also relevant:

- A single person currently in receipt of the PUP will continue to receive the payment gross and tax is not collected from these payments until s/he returns to work. This is also the case where both married spouses/civil partners are receiving PUP;

- 50% of all PUP recipients are not on the highest rate of €350 per week. A single person’s weekly tax credits will fully cover any tax due on weekly PUP payments at the €203, €250 and €300 payment rates.

- For these rates, the employee will in fact have excess weekly tax credits of between €3.46 and €22.86 which will build up for the period s/he is out of work. This means that the employee will have additional tax credits to offset against income when s/he returns to work;

- For a single person in receipt of PUP of €350 per week, his/her weekly tax credits cover 90% of the tax payable, leaving tax due of approximately €6.50 per week.

USC is not chargeable on PUP payments which will either fully or partially offset any tax impact on overall net wages and should be borne in mind.

If a single person is in receipt of the PUP from January 2021 to end of June 2021 before then returning to work (i.e. 26 payments of PUP at €350 per week = €9,100), the total outstanding tax due on the payments received at that point is approximately €170. By adjusting the employee’s tax credits while he or she is receiving the PUP payment, as outlined above, this, eliminates or reduces any liability at year end. Any such liability will also be fully or partly offset by the reduction in the total USC liability for the year because, as explained above, PUP payments are not liable to USC. In effect, this means that, in most cases, the net take home pay of PUP recipients that return to employment will be unaffected by the taxation measures.

The position for married couples/civil partners is slightly different. Where a couple is taxed under joint assessment and one spouse or civil partner is in receipt of the PUP but does not have sufficient tax credits to cover the tax due, the tax credits of the working spouse or civil partner are reduced to ensure that the balance of the tax is collected during the year. Effectively, the personal tax credit of the PUP recipient is not assigned to the working spouse in the usual manner as it is instead allocated to the excess PUP amount over and above the (PUP) recipient’s PAYE tax credit and rate band.

Finally, in taxing PUP payments in accordance with the legislation, Revenue is seeking to ensure, as far as possible, that people do not end up with a tax liability at the end of 2021 that will have to be paid in future years, particularly where there is already an underpayment in respect of 2020. The alternative ‘year-end’ approach would result in employees having further underpayments in the years ahead in addition to their 2020 liabilities, which could cause financial difficulties for them down the road. The normal deduction arrangements now applying to both EWSS and PUP for 2021 seeks to insure against this, as tax credits are set aside for offset against any tax due. The arrangement also ensures an equity of tax treatment between those receiving the PUP and employees who are working and receiving similar levels of wages (although the person on PUP will have a lower USC liability).

Pension Provisions

Questions (140)

Bernard Durkan

Question:

140. Deputy Bernard J. Durkan asked the Minister for Finance if a person (details supplied) can be facilitated for the full payment of their AMRF pension; if the case can be fully and favourably investigated given their current circumstances; if the policy entails a death benefit; and if he will make a statement on the matter. [7979/21]

Written answers

Minister for Finance

I am advised by Revenue that an individual who is under the age of 75 at the time of exercising the Approved Retirement Fund (ARF) option and does not meet the requirement in section 784C(4) Taxes Consolidation Act 1997 (TCA) of having a minimum guaranteed pension or annuity income for life of €12,700 per annum, is required under that section to set aside an amount of €63,500 from the pension fund (or the remainder of the fund, if less than €63,500 after taking a retirement lump sum) by investing the amount in an Approved Minimum Requirement Fund (AMRF) or by the purchase of an annuity.

A maximum of 4% of the AMRF value may be withdrawn annually and withdrawals are subject to tax. However, there are currently no other provisions within the legislation that provide for early withdrawal from this fund.

The Deputy provided details of a specific taxpayer in his correspondence and I can confirm that Revenue are now in contact with the taxpayer directly in relation to the matter.

Covid-19 Pandemic Supports

Questions (141, 149, 181)

Michael Healy-Rae

Question:

141. Deputy Michael Healy-Rae asked the Minister for Finance the steps he will take to assist the wedding industry (details supplied); and if he will make a statement on the matter. [8047/21]

Holly Cairns

Question:

149. Deputy Holly Cairns asked the Minister for Finance if he will extend eligibility under the Covid restrictions support scheme to wedding suppliers given the severe impact of the Covid-19 restrictions on this sector; and if he will make a statement on the matter. [8341/21]

Neale Richmond

Question:

181. Deputy Neale Richmond asked the Minister for Finance if he has considered financial supports for the exercise industry to aid in its recovery from Covid-19 restrictions; and if he will make a statement on the matter. [8867/21]

Written answers

Minister for Finance

I propose to take Questions Nos. 141, 149 and 181 together.

The CRSS is a targeted support for businesses significantly impacted by restrictions introduced by the Government under public health regulations to combat the effects of the Covid-19 pandemic. The support is available to companies, self-employed individuals and partnerships who carry on a trade or trading activities, the profits from which are chargeable to tax under Case I of Schedule D, from a business premises located in a region subject to restrictions introduced in line with the Living with Covid-19 Plan.

Details of CRSS are set out in Finance Act 2020 and detailed operational guidelines, which are based on the terms and conditions of the scheme as set out in the legislation, have been published on the Revenue website at: https://www.revenue.ie/en/corporate/press-office/budget-information/2021/crss-guidelines.pdf

To qualify under the scheme a business must, under specific terms of the Covid restrictions, be required to either prohibit or significantly restrict, customers from accessing their business premises to acquire goods or services, with the result that the business either has to temporarily close or to operate at a significantly reduced level. For the purposes of CRSS, a qualifying “business premises” is a building or other similar fixed physical structure in which a business activity is ordinarily carried on.

Where a business does not ordinarily operate from a fixed business premises, such as certain wedding businesses or outdoor fitness/activity businesses, that business will not meet the eligibility criteria for CRSS.

It is not sufficient that the trade of a business has been impacted because of a reduction in customer demand as a consequence of Covid-19. The scheme only applies where, as a direct result of the specific terms of the Government restrictions, the business is required to either prohibit or significantly restrict access to its business premises.

I have no plans to change the eligibility criteria for the CRSS or to introduce sectoral supports. The CRSS is just one of the Government’s supports to assist businesses impacted by COVID-19. Businesses who are not eligible for CRSS may be entitled to alternative supports put in place by the Government, including the COVID Pandemic Unemployment Payment (PUP), the Employment Wage Subsidy Scheme (EWSS) and the Tourism Business Continuity Scheme. Businesses may also be eligible under the Debt Warehousing Scheme to ‘park’ certain VAT and PAYE (Employer) liabilities, excess payments received under the Temporary Wage Subsidy Scheme (TWSS), outstanding balances of self-assessed Income Tax for 2019 and Preliminary Tax for 2020.

I would draw Deputies attention to the recent announcement by the Tánaiste and Minister for Enterprise Trade and Employment of a new €60 million COVID-19 Business Aid Scheme (CBAS) that is being developed to provide grants to businesses ineligible for the Government’s other existing schemes, designed to help with fixed costs. I will continue to work with Ministerial colleagues to ensure that appropriate supports are in place to mitigate the effects of the Covid-19 pandemic on the economy.

Covid-19 Pandemic

Questions (142)

Pearse Doherty

Question:

142. Deputy Pearse Doherty asked the Minister for Finance the way in which Ireland's recovery and resilience plan will deal with the outstanding country specific recommendations including, specifically, the recommendations to step up action to address features of the tax system that facilitate aggressive tax planning, including on outbound payments and to broaden the tax base. [8056/21]

Written answers

Minister for Finance

Political agreement between the European Parliament and the Council on the Recovery and Resilience Facility Regulation was reached in December. The European Parliament and the Council are now completing the steps to formally adopt the Regulation, which is expected to enter into force next week.

The Regulation will stipulate that Member States must submit a National Recovery and Resilience Facility to the Commission by the deadline of 30th April. These plans will set out the package of reforms and investments that will be financed by the Member States’ allocation (grants and potentially, loans) under the Recovery and Resilience Facility.

The reforms and investments included in the Plan must seek to address challenges identified in the relevant Country Specific Recommendations (CSRs) received in 2019 and 2020, which arise as part of the European Semester process.

I can confirm that work is underway within my Department in respect to the specific recommendations on stepping up action to address features of the tax system that facilitate aggressive tax planning, including on outbound payments and to broaden the tax base.

In this context, I published an Update to Ireland Corporation Tax Roadmap In January which, as well as outlining considerable progress to date, sets out the next steps I will be taking to reform Ireland's corporation tax code. Commitments 6 and 7 of the Update to the Roadmap commit to considering actions that may be needed in respect of outbound payments and specifically to explore the issues related to outbound payments from Ireland and withholding taxes. This process will include an examination of issues raised by the EU in recent years in the European Semester Process and in the Country Specific Recommendations given to Ireland.

It is my intention to hold a public consultation in the coming months on outbound payments to seek the input of stakeholders and interested parties. I encourage anyone with an interest in this area to engage with the process and make a submission to the public consultation, which will be announced on my Department’s website in due course.

Options to broaden the tax base will be assessed as part of the annual Tax Strategy Group process which I will consider in the context of the annual budget.

Departmental Strategy Statements

Questions (143)

Gerald Nash

Question:

143. Deputy Ged Nash asked the Minister for Finance the status of the new strategy statement for his Department; the way that his Department will make climate action a core pillar of its new strategies as stated in the Programme for Government; if he has directed each of the agencies and offices under his remit to adopt a climate mandate under which those bodies will seek to support climate action within their own operations and among their clients and suppliers; and if he will make a statement on the matter. [8058/21]

Written answers

Minister for Finance

In accordance with Section 5(1) of the Public Service Management Act 1997, my Department has prepared a new Statement of Strategy for the period 2021-2023. The Statement of Strategy takes into account the objectives set out in the Programme for Government and provides a framework to translate these into policies and operational business plans designed to achieve implementation. In line with the Programme for Government, the Statement of Strategy statement includes ‘promoting environmentally sustainable economic progress’ as one of the Department’s five strategic goals. The Statement of Strategy was recently published and is available on my Department’s website at https://www.gov.ie/en/publication/24836f-strategy/.

In line with the Climate Action Plan 2019, and work underway on the forthcoming Climate Action Plan 2021, a Climate Action Mandate will be introduced for every public body. The mandate is a commitment to climate action by the public sector and will include commitments under property and asset ownership and operation, employees, procurement, policy formulation and implementation and organisational strategies.

Prize Bonds

Questions (144)

Mattie McGrath

Question:

144. Deputy Mattie McGrath asked the Minister for Finance the amount invested in the National Treasury Management Agency prize bonds on 31 December 2020; and the percentage breakdown of this amount which was invested in 2020 and in each of the preceding calendar years. [8061/21]

Written answers

Minister for Finance

The NTMA has supplied the table below in response to the Deputy's question.

Year	Amount Invested (million)	Fund at Year-End(million)	Total Year Issues as % of Year End Fund Value
2020	731	4,103	18%
2019	538	3,655	15%
2018	574	3,415	17%
2017	571	3,170	18%
2016	666	2,894	23%
2015	557	2,481	22%
2014	475	2,176	22%
2013	474	1,929	25%
2012	346	1,649	21%

Note: These are the amounts of Prize Bonds issued every year; there would also be redemptions, so the fund value at year-end does not equal the value at previous year-end plus issuance.

Prize Bonds

Questions (145)

Mattie McGrath

Question:

145. Deputy Mattie McGrath asked the Minister for Finance the amount of prize money paid out on behalf of the National Treasury Management Agency prize bonds in 2020; and the percentage breakdown of this amount which was paid in respect of bonds purchased in 2020 and in each of the preceding calendar years. [8062/21]

Written answers

Minister for Finance

The NTMA have supplied the table below in response to the Deputy's question.

Year	Prizes Paid €m	Distribution of value of prizes in 2020 by year of purchase €m	% Distribution of value of prizes in 2020 by year of purchase
2020	19,242,050	1,534,950	8%
2019		2,129,800	11%
2018		1,977,100	10%
2017		1,689,750	9%
2016		1,925,500	10%
2015		2,391,100	12%
2014		1,071,150	6%
2013		957,900	5%
2012		849,450	4%
Pre 2012		4,715,350	25%
		19,242,050	100%

Note: Although the NTMA has provided the analysis contained in the table above, they emphasise that all draws are random and therefore the year in which a bond is purchased does not play a role in the probability in winning a prize. Over time, the percentage of bonds outstanding in any year should proportionately win that proportion of prizes.

Departmental Expenditure

Questions (146)

Rose Conway-Walsh

Question:

146. Deputy Rose Conway-Walsh asked the Minister for Finance the amount of financial support provided by the State to private enterprises engaged in the collection of genetic data in Ireland; if the Government will have free access to this data in the future; and if he will make a statement on the matter. [8301/21]

Written answers

Minister for Finance

The National Treasury Management Agency which manages the Ireland Strategic Investment Fund (ISIF) have advised me that in line with its double bottom line mandate ISIF has made an investment of €66m in Genuity Science. ISIF’s investment is aimed at supporting the creation of a precision medicine hub in Ireland with associated economic benefits to the Irish economy. ISIF’s role is that of an investor/shareholder and accordingly ISIF has no role in the strategy or operation of Genuity Science.

Illicit Trade

Questions (147, 148)

Jackie Cahill

Question:

147. Deputy Jackie Cahill asked the Minister for Finance if the Revenue Commissioners have the resources and manpower to investigate and prosecute the black-market business in the barber, hairdressing and beauty industry; and if he will make a statement on the matter. [8332/21]

Jackie Cahill

Question:

148. Deputy Jackie Cahill asked the Minister for Finance the average number of investigations the Revenue Commissioners have taken and the return to the Exchequer over the past five years in fines and interest payments from the barber, hairdressing and beauty industry; and if he will make a statement on the matter. [8333/21]

Written answers

Minister for Finance

I propose to take Questions Nos. 147 and 148 together.

I am advised by Revenue that it operates a risk-based focus to its compliance intervention programmes where taxpayer behaviour determines the nature, extent and consequences of the (Revenue) response. These responses range from lighter-touch interventions for less serious offences up to tax-audit and investigation with a view to prosecution for the most egregious cases.

Revenue’s risk-based approach is supported by a broad range of data, intelligence and analytical technologies that help to identify, target and confront non-compliant cases both at individual taxpayer level and at sectoral level, including the hair and beauty sectors referenced by the Deputy. Revenue also deploys significant resources to investigate shadow economy activity, which includes on the round operations such as unannounced visits to premises, surveillance and follow up to third party information.

Revenue has confirmed that for the years 2016 to 2020, it carried out approximately 4,200 interventions on the hair and beauty sectors, which yielded almost €8m in additional taxes and penalties. Revenue also confirmed that it is satisfied that it has the necessary resources and manpower to effectively manage tax non-compliance across the different sectors of the economy, including the hair and beauty sectors.

Question No. 149 answered with Question No. 141.

Interest Rates

Questions (150, 155, 168, 176, 184, 185)

Niall Collins

Question:

150. Deputy Niall Collins asked the Minister for Finance his views on negative interest rates being imposed by banks (details supplied) and its impact on businesses; and if he will make a statement on the matter. [8407/21]

Cathal Crowe

Question:

155. Deputy Cathal Crowe asked the Minister for Finance if he will consider a proposal (details supplied) on the charging of negative interest rates and the impact of same on solicitor’s client accounts. [8467/21]

Catherine Murphy

Question:

168. Deputy Catherine Murphy asked the Minister for Finance if his attention or that of his officials has been drawn to a proposal by banks (details supplied) to introduce charges on transaction moneys held in solicitor client accounts for and on behalf of clients and-or customers or consumers; and if he has engaged with or plans to engage with the banks and-or the Central Bank on this matter. [8751/21]

Colm Burke

Question:

176. Deputy Colm Burke asked the Minister for Finance if his Department will request the banks not to impose a penalty charge on solicitors' practices who are holding moneys for clients in their client account on trust; and if he will make a statement on the matter. [8813/21]

Réada Cronin

Question:

184. Deputy Réada Cronin asked the Minister for Finance the actions he will take to protect consumers in relation to the matter of banks (details supplied) giving notice that negative interest rate charges are to apply to solicitor client accounts in conveyancing (details supplied); and if he will make a statement on the matter. [8929/21]

Michael Lowry

Question:

185. Deputy Michael Lowry asked the Minister for Finance if his attention has been drawn to concerns raised by a society (details supplied) in relation to the charging of negative interest rates in respect of moneys held in solicitors' clients' accounts; if he will consider establishing a national scheme or introduce legislation to protect consumer deposits held in solicitors' clients' accounts from negative interest rates; and if he will make a statement on the matter. [8933/21]

Written answers

Minister for Finance

I propose to take Questions Nos. 150, 155, 168, 176, 184 and 185 together.

As the Deputy is aware, as Minister for Finance I have no role in the day to day operations of any bank operating within the State including banks in which the State has a shareholding. I'm precluded from intervening on behalf of any individual customer in any particular bank. Decisions in relation to commercial matters are the sole responsibility of the board and management of the banks, which must be run on an independent and commercial basis. The independence of banks in which the state has a shareholding is protected by Relationship Frameworks which are legally binding documents that cannot be changed unilaterally. These frameworks, which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market.

The application of interest rate charges is solely a commercial matter for the board and management of each bank.

Deposit balances and liquidity in general has risen significantly across the banking system in Europe in recent years as the ECB has continued to provide additional funds through their asset purchase schemes and long term refinancing operations. This has been further exacerbated by the Covid19 pandemic as households continue to stay at home and save and businesses defer investment decisions. This excess liquidity which has grown significantly in the European system has to go somewhere and in the main it gets placed back on deposit with the ECB who charge the banks -0.50%. The application of negative deposit rates by the ECB has resulted in European banks incurring a consequent cost on deposit accounts. The Irish banks are impacted in a similar way to their European counterparts. The banks across Europe have looked to pass some of the costs associated with negative rates to deposit holders with larger balances. The Irish banks are no different in this regard.

In passing on some of these costs it is important to note that banks cannot differentiate between customers in different sectors and for that reason the approach taken is to apply charges based on the size of the deposit balance.

Covid-19 Pandemic Supports

Questions (151, 159)

Catherine Murphy

Question:

151. Deputy Catherine Murphy asked the Minister for Finance his plans to extend the stay and spend tax credit initiative beyond April 2021. [8409/21]

Alan Dillon

Question:

159. Deputy Alan Dillon asked the Minister for Finance if he will provide information on the stay and spend scheme; the number of businesses registered; the total stay and spend receipt uploads for accommodation, food and accommodation and for food only; the value accrued on the scheme; and if he will make a statement on the matter. [8638/21]

Written answers

Minister for Finance

I propose to take Questions Nos. 151 and 159 together.

The purpose of the Stay and Spend Tax Credit scheme is to provide targeted support to businesses within the hospitality sector whose operations are likely to be most affected by continued restrictions on public health grounds. In order to claim the Stay and Spend Tax Credit, taxpayers are required to upload a copy of their receipt(s) for qualifying expenditure to the Revenue Receipts Tracker and then make a formal claim for the tax credit when submitting their annual Income Tax Return.

Under the scheme a claim may be made in relation to qualifying expenditure incurred between the period 1 October 2020 and 30 April 2021. Broadly, qualifying expenditure includes expenditure on either holiday accommodation or “eat in” food and drink, with a minimum expenditure amount of €25 per transaction being required.

The scheme was developed at a time when there appeared to be a steady downward trend in infection rates, and there was an expectation that the re-opening of the economy could be sustained uninterrupted. Unfortunately, this has not been the case and, thus far, with the exception of some short periods, public health restrictions have had the effect of impeding the operation of the incentive as originally envisaged. Stay and Spend is scheduled to operate until 30 April but the flexibility exists for me to extend its operation in 2021 beyond that date (to end 2021). It is too early as yet to take definitive decisions in that regard. Much will depend on how circumstances unfold in the months ahead. As I have said before, I will keep an eye on how matters develop and the role that the scheme might play and consider if any changes need to be made.

Claims relating to qualifying expenditure incurred in the period from 1 October 2020 to 31 December 2020 can be made when an individual is submitting his/her 2020 Income Tax Return, which is now available for submission.

As at 10 February 2021, the number of business registered to take part in the Stay and Spend scheme is 3,137.

A total of 51,494 receipts have been uploaded by taxpayers to the Revenue Receipts Tracker and the expenditure recorded on these receipts amounts to €8,406,533. The potential tax cost is €1,681,307 assuming all such expenditure is claimed and qualifies in full for tax relief. Of the 51,494 receipts uploaded 9,917 relate to accommodation and food, 8,185 for accommodation only and 33,392 for food only.

As at 14 February 2021 a total of 7,799 claims have been included in 2020 Income Tax Returns. These claims relate to €2,755,230 of the qualifying expenditure recorded on the Revenue Receipts Tracker to date and the tax cost of same amounts to €551,046. However, as the filing deadline for the 2020 Income Tax Return is not until 31 October 2021, information on the total number of claims and cost for the 2020 year of assessment will not be available until after the filing date and the returns have been processed.

Subsequent to claims being made in respect of this new scheme and any other relief or deduction, verification of such reliefs and deductions forms part of Revenue’s comprehensive risk assessment programme.

It is important also to recall that Stay and Spend should not be viewed in isolation from the other measures put in place to support businesses generally and the hospitality sector in particular.

In recognition of the unprecedented challenges facing the Hospitality and Tourism sector, the VAT rate was reduced from 13.5% to 9 % from 1 November 2020. This is a temporary measure to provide support to the sector, where many businesses remain closed for now and those that are open are operating at significantly reduced capacity, and will apply from 1 November 2020 to 31 December 2021.

The Employment Wage Subsidy Scheme (EWSS) has been a key component of the Government’s response to the continued COVID-19 crisis to support viable firms and encourage employment in the hospitality and tourism sector and beyond. I have been clear that there will be no cliff-edge to the EWSS.

The Covid Restrictions Support Scheme (CRSS) is a targeted support for businesses significantly impacted by restrictions introduced by the Government under public health regulations to combat the effects of the COVID-19 pandemic. The support is available to companies, self-employed individuals and partnerships who carry on a trade or trading activities, the profits from which are chargeable to tax under Case I of Schedule D, from a business premises located in a region subject to restrictions introduced in line with the Living with COVID-19 Plan.

Businesses may also be eligible under the Debt Warehousing Scheme to ‘park’ certain VAT and PAYE (Employer) liabilities, excess payments received under the Temporary Wage Subsidy Scheme (TWSS), outstanding balances of self-assessed Income Tax for 2019 and Preliminary Tax for 2020.

Primary Medical Certificates

Questions (152)

Michael Fitzmaurice

Question:

152. Deputy Michael Fitzmaurice asked the Minister for Finance further to Parliamentary Question No. 228 of 27 January 2021, the reason County Roscommon is not carrying out assessments; when the county will carry out assessments; and if he will make a statement on the matter. [8429/21]

Written answers

Minister for Finance

I brought forward an amendment to the Finance Bill to provide for the existing medical criteria for the Disabled Drivers Scheme in primary legislation. Following approval of the Finance Act 2020, the HSE has been informed that medical assessments can recommence from 1st January 2021.

However, in the context of the national effort to suppress and manage the impact of COVID, the ability to hold assessments is impacted by, among other things, the public health restrictions in place and the role of the HSE Medical Officers in the roll-out of the COVID vaccination programme and in responding to outbreaks in residential care facilities across the country. The HSE has confirmed that the community medical doctors and their teams are predominately deployed to the COVID vaccination rollout in residential care facilities and other health care settings.

Mortgage Lending

Questions (153)

Thomas Gould

Question:

153. Deputy Thomas Gould asked the Minister for Finance if he will engage with banks to request them to extend approval in principle for the duration of the level 5 lockdown and the ban on house visiting. [8445/21]

Written answers

Minister for Finance

Since the COVID-19 situation first arose, I have maintained contact with the BPFI and lenders on the measures they have put in place to assist their customers who are economically impacted by the pandemic. In relation to the particular issue of new mortgage lending, the main retail banks previously confirmed that they are considering mortgage applications and mortgage drawdowns in relation to their customers who were impacted by COVID-19 on a case by case basis and that they are taking a fair and balanced approach. Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. Therefore, if mortgage applicants have any queries or concerns about the impact of COVID-19 on their mortgage application, they should in the first instance contact their lender directly on the matter.

Regarding the particular issue of extending the period of a mortgage approval in principle, the Central Bank has advised that there are no specific regulatory requirements relating to the duration of an Approval in Principle. That is a commercial and business matter for a particular lender. However, a lender should make the duration of any offer of Approval in Principle clear to a consumer, in line with the requirement of the Consumer Protection Code 2012 to provide clear information to a consumer and bring their attention to key information.

More generally there are certain consumer protection requirements which govern the provision of mortgage credit to consumers. For example, the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness with a view to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The CMCAR further provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which are necessary, sufficient and proportionate.

In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower. The Code specifies that the affordability assessment must include consideration of the information gathered on the borrower’s personal circumstances and financial situation. Furthermore, where a lender refuses a mortgage application, the CMCAR requires that the lender must inform the consumer without delay of the refusal. In addition, the Code requires that the lender must clearly outline to the consumer the reasons why the credit was not approved, and provide these reasons on paper if requested.

Regarding the separate issue of controls on house visiting during the pandemic period, that is a matter for my colleague the Minister for Health.

Covid-19 Pandemic Supports

Questions (154)

Michael Healy-Rae

Question:

154. Deputy Michael Healy-Rae asked the Minister for Finance if he will address a matter regarding the wage subsidy scheme (details supplied); and if he will make a statement on the matter. [8463/21]

Written answers

Minister for Finance

Since the COVID-19 situation first arose, I have maintained contact with the BPFI and lenders on the measures they have put in place to assist their customers who are economically impacted by the pandemic. In relation to the particular issue of new mortgage lending, the main retail banks previously confirmed that they are considering mortgage applications and mortgage drawdowns in relation to their customers who are on the Employment Wage Subsidy Scheme (EWSS) on a case by case basis and that they are taking a fair and balanced approach. Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. Therefore, if mortgage applicants have any queries or concerns about the impact of COVID-19 on their mortgage application, they should in the first instance contact their lender directly on the matter.

However, there are certain consumer protection requirements which govern the provision of mortgage credit. For example, the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness with a view to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The CMCAR further provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which are necessary, sufficient and proportionate.

In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower. The Code specifies that the affordability assessment must include consideration of the information gathered on the borrower’s personal circumstances and financial situation. Furthermore, where a lender refuses a mortgage application, the CMCAR requires that the lender must inform the consumer without delay of the refusal. In addition, the Code requires that the lender must clearly outline to the consumer the reasons why the credit was not approved, and provide these reasons on paper if requested.

Within this regulatory framework, the decision to grant or refuse an application for mortgage credit remains a commercial matter for the individual lender. Also a loan offer may contain a condition that would allow the lender to withdraw or vary the offer if in the lender’s opinion there is any material change in circumstances prior to drawdown. In such cases, the decision to withdraw or vary the offer is also a commercial decision for the lender.

Nevertheless, the Central Bank has indicated that it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic. If a mortgage applicant is not satisfied with how a regulated firm is dealing with them in relation to an application for credit, or they believe that the regulated firm is not following the requirements of the Central Bank’s codes and regulations or other financial services law, they should make a complaint directly to the regulated firm. If the mortgage applicant is still not satisfied with the response from the regulated firm, he or she can refer the complaint to the statutory Financial Services and Pensions Ombudsman.

Question No. 155 answered with Question No. 150.

Covid-19 Pandemic Supports

Questions (156)

Seán Haughey

Question:

156. Deputy Seán Haughey asked the Minister for Finance the reason employees are taxed on the temporary wage subsidy scheme and-or the employee wage subsidy scheme element of their wages and salaries; and if he will make a statement on the matter. [8527/21]

Written answers

Minister for Finance

The Temporary Wage Subsidy Scheme (TWSS) was introduced on 26 March 2020. It was an emergency measure to deal with the impact of the Covid-19 pandemic on the economy. Over 66,500 employers were supported through the TWSS in respect of more than 664,000 employees at a cost of €2.9bn. The scheme operated until 31 August 2020 and was replaced by the Employment Wage Subsidy Scheme (EWSS) from 1 September 2020.

Payments made under the TWSS were regarded as income supports and share the characteristics of income. Other income earners in receipt of comparable “normal wages” are taxable on those wages. In the interest of equity, therefore, payments under the TWSS are subject to income tax and Universal Social Charge (USC). It is noted however that a zero rate of PRSI applied for the purposes of employee PRSI contributions under the TWSS. The taxation treatment of TWSS payments was legislated for in section 28(5)(e) of the Emergency Measures in the Public Interest (Covid-19) Act 2020.

While income tax and the USC on earnings are generally deducted in real-time as and when the person is paid, tax was not collected in real-time through the PAYE system while the TWSS was in operation. Instead, liability to tax was to be calculated by Revenue through the regular end of year review process. This decision was taken in order to maximise the amount of financial support that was provided to recipients at a time when it was considered that they needed such support most, when the TWSS was first announced and expected to only be in place for 12 weeks. When the TWSS was extended for a further 10 weeks until the end of August 2020, Revenue took steps to minimise the amount of income tax and USC due, if any, on TWSS payments at the end of the year. This was done by placing all recipients of the TWSS or PUP on the ‘week 1 basis ’ of taxation for the remainder of the year so as to “preserve” unused tax credits that can then be used to offset any income tax or USC liabilities that arise at year end.

The final calculation of the end of year liability for each person is dependent on a range of factors, including a person’s civil status, their available tax credits, the amount received under TWSS and/or PUP, any top-up payments made by the employer, as well as other entitlements and credits, such as health expenses.

Revenue will be adopting a fair and flexible approach to collecting tax due on payments made under the TWSS and has given assurances that if any income tax and USC liabilities still arise following the allocation of unused credits, it will work with its customers to collect the outstanding liabilities and a number of flexible arrangements may be entered into, including the collection without interest over an extended period of time for 4 years beginning in 2022.

It is also understood that Revenue are facilitating employers who wish to pay the tax liabilities of their employees where such income tax and USC liabilities arise from the schemes.

Data Revenue have now released on the preliminary 2020 end of year statements which shows that almost half of those in receipt of the Pandemic Unemployment Payment (PUP) or TWSS in 2020 have no outstanding liability to discharge (in fact over a third are due a refund).

In the case of the remaining taxpayer units with an outstanding liability, the data indicates that amounts to be collected are modest in scale, with 44% owing less than €500 and 72% having a liability of less than €1,000.

If paid over the 4 year period beginning in 2022, the majority of those cases will owe less than €5 per week, with nearly half paying less than €2.50 per week. These figures represent a preliminary liability and may be further reduced by additional tax credits or reliefs such as health expenses.

The Employment Wage Subsidy Scheme (EWSS), was legislated for under the Financial Provisions (Covid-19) (No. 2) Act 2020. The EWSS has re-established the normal requirement to operate PAYE on all employee salaries, providing for the regular deduction and remittance of income tax, USC and employee PRSI.

Property Tax

Questions (157)

Seán Haughey

Question:

157. Deputy Seán Haughey asked the Minister for Finance if local property tax will be reduced for apartment owners who pay large service charges to their management companies but receive no direct services from their local authority; if the tax will also be reduced in cases in which the property has been for sale for a lengthy period of time; and if he will make a statement on the matter. [8530/21]

Written answers

Minister for Finance

The Programme for Government "Our Shared Future" includes the following commitments in relation to LPT-

a. To bring forward legislation for the LPT on the basis of fairness and that most homeowners will face no increase.

b. To bring new homes, which are currently exempt from the LPT, into the taxation system, and that

c. All money collected locally will be retained within the county. This is to be done on the basis that those counties with a lower LPT base are adjusted via an annual national equalisation fund paid from the Exchequer.

I am currently examining options for the reform of the Local Property Tax in the light of the 2019 Interdepartmental LPT Review Report, the views of the Budgetary Oversight Committee and the Programme for Government commitments. I hope to be able to bring proposals for amending legislation to Government soon. The Deputy will appreciate that it would not be appropriate for me to comment further before the Government has had an opportunity to consider the matter fully.

Covid-19 Pandemic Supports

Questions (158)

Seán Sherlock

Question:

158. Deputy Sean Sherlock asked the Minister for Finance the status of the employment wage subsidy scheme; and if it has an end date. [8596/21]

Written answers

Minister for Finance

The objective of the Employment Wage Subsidy Scheme (EWSS) is to support all employment and maintain the link between the employer and employee insofar as is possible. To date, subsidy payments of almost €2 billion have been made and PRSI relief worth over €300m granted to over 46,600 employers in respect of over 532,000 employees.

I have been clear that there will be no cliff-edge to the EWSS. It is noted that the legislation implementing the measure provides that it will be in place until 31 March 2021, but also provides that the scheme may be extended until the end of June 2021, should it be required.

It is likely that continued support will be necessary out to the end of 2021 to help maintain viable businesses and employment and to provide businesses with certainty to the maximum extent possible. Decisions on the form of such support will take account of emerging circumstances and economic conditions as they become clearer.

In the meantime I am satisfied that the design of the Employment Wage Subsidy Scheme (EWSS) fully takes account of the changing environment around living with the COVID-19 pandemic.

The Government remains fully committed to supporting businesses and employers insofar as is possible at this time.

As I am sure the Deputy is aware, to date, additional expenditure of well over €13 billion has been paid out with more planned still in 2021 to sustain businesses and help people to manage financially in the midst of these very difficult times.

Question No. 159 answered with Question No. 151.