Written Answers Nos. 151-172
151. Deputy Pearse Doherty asked the Minister for Transport when an application by a person (details supplied) to change a UK driver licence to an Irish driver licence will be processed; and if he will make a statement on the matter. [10531/21]
View answerAll enquires relating to driver licensing are handled by the National Driver Licence Service (NDLS), provided by the Road Safety Authority (RSA). My Department does not have access to individual applications.
I have forwarded the Deputy's query to the RSA for direct reply. If he has not heard from them in 10 working days I would ask that he contact my office directly.
152. Deputy Pearse Doherty asked the Minister for Transport if a UK driver licence issued in exchange for a Zimbabwean licence can be exchanged for an Irish driver licence; and if he will make a statement on the matter. [10532/21]
View answerIreland has entered into a driving licence exchange agreement with the UK. Under this agreement, a UK licence holder is permitted to exchange their driving licence for an Irish licence with the equivalent categories.
An exception to this is where a licence issued in another (third) country, that Ireland does not have an exchange agreement with, was previously exchanged for a UK licence. Ireland does not have a licence exchange agreement with Zimbabwe and so a UK licence issued in exchange for such a licence can not be exchanged for an Irish licence.
If a person holds a UK licence where a higher category has been obtained by passing a driving test in the UK in reliance, as a prerequisite, on a lower category which originated from such a third country, then the licence is accepted for exchange.
153. Deputy Christopher O'Sullivan asked the Minister for Finance if he will review the current policy which requires signatures of all parties in circumstances in which a request has been made to the Financial Services and Pensions Ombudsman to investigate a particular case; and if he will make a statement on the matter. [10556/21]
View answerFirstly, I must point out that the Financial Services and Pensions Ombudsman (FSPO) is independent in the performance of his statutory functions. I have no role in the day to day workings of the office or in the decisions which he takes.
I am advised that where a complaint is made to the FSPO concerning a joint account or a joint policy, the FSPO must recognise that all parties to the account or policy have rights, entitlements and potential liabilities arising in relation to such an account or policy, and accordingly certain data protection issues arise. Whether the complaint is settled by way of agreement between the parties, using the confidential Dispute Resolution Services of the FSPO, or is the subject of a formal investigation by the FSPO, leading to a legally binding decision, the rights and obligations of all joint account holders or joint policyholders are thereby affected. All owners of the account or policy must therefore be agreeable to the investigation of the complaint by the FSPO, and their signature provides evidence of their agreement.
If a complainant indicates a difficulty in securing the signature of another party to an account or policy, the FSPO reviews the individual circumstances to form an understanding as to the reason for the difficulty, and where possible offers guidance as appropriate, as to what options may be available. The FSPO fully recognises the difficulty for complainants who cannot obtain the agreement of another party to the investigation of a complaint. The FSPO must however respect the rights and entitlements of all parties to an account or policy.
154. Deputy Catherine Connolly asked the Minister for Finance the impact assessment his Department has undertaken of the recent changes to the help-to-buy scheme which extends the scheme to end 2021 and allows new buyers to claim up to €30,000 under the scheme, particularly in view of research by the ESRI which predicts that these changes are likely to push up house prices; the engagement he has had with the Minister for Housing, Local Government and Heritage in this regard; and if he will make a statement on the matter. [1838/21]
View answerSection 477C of the Taxes Consolidation Act of 1997 provides for The Help to Buy scheme (HTB). HTB was initially announced on 19 July 2016 as part of the ‘Rebuilding Ireland: Action Plan for Housing and Homelessness’.
An increase in the supply of new housing is fundamental to resolving the current housing crisis. One of the main aims of the policy underpinning the design of HTB was to help encourage the building of additional new properties. By restricting the scheme solely to new dwellings and new self-builds, it is anticipated that the resulting increase in demand for affordable new build homes will encourage the construction of an additional supply of such properties. In accordance with a commitment in the Programme for Government, HTB was enhanced in July 2020. It is too soon to draw conclusions as to the impact of the enhancements on supply.
HTB has been the subject of two independent reviews: an impact assessment (2017), and a full Cost Benefit Analysis (2018), both carried out by Indecon Economic Consultants.
The report of the impact assessment was published as part of Budget 2018 documents and is available at the following link:
http://www.budget.gov.ie/Budgets/2018/Documents/HTB_Independent_Impact_Assessment_Sept2017.pdf
The report of the Cost Benefit Analysis was published on the day of Budget 2019, in the Department of Finance Report on Tax Expenditures, and is available at the following link:
www.budget.gov.ie/Budgets/2019/Documents/Tax%20Expenditures%20Report%20Budget%202019.pdf .
In brief, the 2018 CBA, confirmed the findings of the independent review as follows:
- Prices: While there might have been a very small increase in prices attributable to the introduction of the incentive, the primary driver of house prices remained the continued misalignment between demand and supply.
- Supply: The evidence suggested that following the introduction of the incentive there was a marked increase in supply which can be attributed in part to HTB.
- Affordability: The analysis also found that availability of HTB had reduced the time to save for all claimants and improved the overall affordability of housing for these individuals.
- Benefit/Cost Ratio: The analysis found a benefit-cost ratio of 1.28 indicating a moderate positive effect for the incentive.
Finally, in relation to impacts on house prices, to the extent that data are available at this point, Revenue advise me that for 2020 the average purchase price relating to HTB claims to December 31 2020 was €329,000 which was the same as the figure for 2019.
155. Deputy Catherine Connolly asked the Minister for Finance the analysis his Department has carried out into the cost of including boat tour businesses which are tied to one particular location and as such are not mobile businesses in the Covid restriction support scheme; and if he will make a statement on the matter. [1837/21]
View answer164. Deputy Niamh Smyth asked the Minister for Finance if he will address a matter raised in correspondence (details supplied); and if he will make a statement on the matter. [9473/21]
View answer210. Deputy Johnny Mythen asked the Minister for Finance the reason the chartered boat industry is excluded from the Covid restrictions support scheme; and if he will make a statement on the matter. [10220/21]
View answerI propose to take Questions Nos. 155, 164 and 210 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. A self-employed travel agent providing services from a home office, which is not customer-facing, will not meet the eligibility criteria. Where a business does not ordinarily operate from a fixed business premises, that business will not meet the eligibility criteria for CRSS.
Deputies will be aware of the Tourism Business Continuity scheme, a €55m strategic funding scheme announced as part of Budget 2021 to support tourism businesses which was launched recently. I understand that boat tour companies and also angling/fishing charters are eligible for phase 1 of this scheme. Further details of the scheme are available on the Fáilte Ireland website at https://www.failteireland.ie/Identify-Available-Funding/Tourism-Business-Continuity-Scheme.aspx
Deputies will also be aware that my colleague, the Tánaiste and Minister for Enterprise, Trade and Employment recently announced €160m funding for measures to help businesses during the pandemic which may be of assistance to your constituents. One of these new schemes, the COVID-19 Business Aid Scheme (CBAS) is being developed to provide grants to businesses ineligible for the government’s other existing schemes designed to help with fixed costs. Further details are available at https://www.gov.ie/en/press-release/94496-government-160m-boost-to-covid-19-business-grants/.
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 mentioned above. 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 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.
156. Deputy Jennifer Whitmore asked the Minister for Finance the facilities available in his Department to facilitate breastfeeding breaks in accordance with World Health Organization, WHO, guidelines of two years for women in the workplace and as part of the National Strategy for Women and Girls 2017-2020; and if he will make a statement on the matter. [9371/21]
View answerI wish to advise that my Department does not have any facilities for breastfeeding in its offices.
157. Deputy Niamh Smyth asked the Minister for Finance if matters raised in correspondence by a person (details supplied) will be addressed; the steps he is taking to address the issue for solicitors and their clients; and if he will make a statement on the matter. [9392/21]
View answer161. Deputy Ged Nash asked the Minister for Finance his views on proposals by banks (details supplied) to impose so-called negative interest charges on transaction monies held in solicitor client accounts for and on behalf of clients and consumers given the unique nature of solicitor’s client accounts; and if he will make a statement on the matter. [9437/21]
View answer170. Deputy Matt Shanahan asked the Minister for Finance if his attention has been drawn to the intention of banks (details supplied) to impose negative interest rates on solicitor client accounts; and if he will make a statement on the matter. [9521/21]
View answer185. Deputy Seán Canney asked the Minister for Finance if his attention has been drawn to the fact that the banks are now imposing charges on solicitor client accounts which is adding further costs to borrowers who are trying to purchase homes; and if he will make a statement on the matter. [9755/21]
View answer187. Deputy Marc MacSharry asked the Minister for Finance if his attention has been drawn to the fact that the major banks have given notice that negative interest rates charges are to apply to solicitor client accounts used for commercial and conveyancing transactions handled by solicitors, including the buying and selling of houses and land; if he considers this appropriate; and his views on whether this will have a detrimental effect on consumers and create an additional financial burden on borrowers hoping to acquire a home. [9773/21]
View answer192. Deputy Fergus O'Dowd asked the Minister for Finance if queries raised in correspondence by a person (details supplied) will receive a response; and if he will make a statement on the matter. [9878/21]
View answer194. Deputy Brendan Griffin asked the Minister for Finance if he will prevent negative interest charges being applied by banks on transaction monies being held by solicitors (details supplied); and if he will make a statement on the matter. [9919/21]
View answer195. Deputy Michael McNamara asked the Minister for Finance if he will call on banks (details supplied) not to impose a penalty charge on solicitors' practices who are holding monies for clients in their client account on trust; and if he will make a statement on the matter. [9954/21]
View answer200. Deputy Brendan Griffin asked the Minister for Finance if his attention has been drawn to a matter regarding bank charges (details supplied); and if he will make a statement on the matter. [10040/21]
View answer205. Deputy Pa Daly asked the Minister for Finance if he will take all appropriate steps to ensure client accounts as defined in SI No. 421/2001 Solicitors Accounts Regulations 2001, can be exempted from the charging of negative interest rates. [10126/21]
View answer215. Deputy Patricia Ryan asked the Minister for Finance if he will intervene to prevent the imposition of charges known as negative interest on monies held in solicitor client accounts for and on behalf of clients; and if he will make a statement on the matter. [10347/21]
View answer219. Deputy Michael Creed asked the Minister for Finance if his attention has been drawn to the general issue regarding negative interest rates being imposed by the pillar banks on monies held on deposit; if his attention has been further drawn to the way in which it relates to solicitor client accounts; his views on whether it is inappropriate to have these charges on such accounts in the circumstances; and if he will make a statement on the matter. [10399/21]
View answer230. Deputy Christopher O'Sullivan asked the Minister for Finance if he will consider exempting solicitor client accounts from negative interest rate charges being applied to transaction bank accounts which acts as a second charge on borrowed money often used to complete the purchase of a home or pay off an existing mortgage; and if he will make a statement on the matter. [10550/21]
View answerI propose to take Questions Nos. 157, 161, 170, 185, 187, 192, 194, 195, 200, 205, 215, 219 and 230 together.
As the Deputies are 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 large part 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.
158. Deputy Thomas Pringle asked the Minister for Finance the number of persons who availed of the tuition tax credit when submitting their form 12 tax returns through Revenue MyAccount and ROS account for self-employment in 2019 and 2020; and if he will make a statement on the matter. [9404/21]
View answer184. Deputy Thomas Pringle asked the Minister for Finance the number of persons that availed of the tuition tax credit when submitting their form 12 tax returns through the Revenue Commissioner’s MyAccount and ROS account for self-employment in 2019 and 2020; and if he will make a statement on the matter. [9744/21]
View answerI propose to take Questions Nos. 158 and 184 together.
I am advised by Revenue that self-employed taxpayers file their tax returns (Form 11) at a later date than PAYE individuals (Form 12). As the most recent tax year for which tax returns for both self-employed taxpayers and PAYE individuals are available is 2018, it is not yet possible to provide comprehensive data for 2019 or 2020.
Revenue has also advised me that more general information on the uptake of various reliefs, including tax relief on approved training courses and third level education fees, for the years 2004 to 2018 is set out in Revenue’s Cost of Tax Expenditures Publication (row 28), which is available at link: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx.
159. Deputy Claire Kerrane asked the Minister for Finance the steps taken to ensure the timely transition of tax credits for persons who were previously in receipt of the pandemic unemployment payment and have now returned to employment; the timeline his Department is working to in order to address these delays; and if he will make a statement on the matter. [9406/21]
View answer160. Deputy Claire Kerrane asked the Minister for Finance the action being taken to ensure persons who were in receipt of the pandemic unemployment payment and have now returned to employment are not overpaying tax as a result of delays regarding the transition of tax credits; and if he will make a statement on the matter. [9407/21]
View answerI propose to take Questions Nos. 159 and 160 together.
Revenue has advised me as follows:
The continuation of the Pandemic Unemployment Payment (PUP) into 2021 has re-established the practice of operating PAYE in the normal (real-time) manner for such payments. It is also important to note that PUP recipients will only pay tax when they return to work.
When a recipient returns to work, he or she should immediately cease the PUP claim with the Department of Social Protection (DSP). DSP will then notify Revenue that the payment has ceased, and Revenue will adjust the employee’s tax credits accordingly. For a person who is on the PUP at the start of the year, the weekly amount is annualised on the Tax Credit Certificate (TCC), with automatic knock on impacts on the tax credits and standard rate cut off point. This ‘annualisation’ operates as if the person is to remain on the 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) then issues to the relevant employer to reflect the updated position and the revised TCC issues to the employee via the online myAccount service. Any delay in issuing the revised instruction to the employer will delay the employee receiving his or her full tax credit entitlements so prompt notification by the employee to the DSP is very important.
The employee should also confirm with his or her employer that deductions of tax are being made based on the most up to date Revenue Payroll Notification issued to the employer by Revenue.
Furthermore, where a self-employed individual incurs a loss for a year of assessment, a provision is available that allows the individual to elect to have that loss offset sideways against other income of the individual, or in cases of joint assessment, against income of the individual’s spouse/civil partner. Therefore, where an individual has incurred a loss in 2020, they may utilise this loss to shelter a tax liability arising from receipt of the PUP.
Finally, Revenue has confirmed to me that there is no delay between receipt of DSP notifications of PUP cessations and the subsequent adjustment of the relevant employees’ tax credits, which operates through an electronic data transfer. However, if any persons are concerned that they are overpaying tax on PUP payments they should contact Revenue’s National PAYE Helpline at 01-7383636.
162. Deputy Seán Haughey asked the Minister for Finance if his attention has been drawn to the fact that mortgage applicants are being refused mortgage protection insurance if they have had Covid-19 within the past six months even in cases in which they have fully recovered from the virus; if he will intervene with the industry to prevent this practice; and if he will make a statement on the matter. [9460/21]
View answerWhile I have an appreciation of the difficulties individuals may find themselves in as a result of the COVID-19 pandemic, neither I, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products or have the power to direct insurance companies to provide cover to specific individuals or businesses. This position is reinforced by the EU framework for insurance (the Solvency II Directive) which expressly prohibits Member States from doing so. Consequently, I am not in a position to direct companies as to how they price their policies or what terms and conditions apply.
It is my understanding that insurers use a combination of rating factors in making their individual decisions on whether to offer life insurance and what terms to apply. These can include age; health; family medical history; occupation; and lifestyle. In addition, these may be determined or linked to the policy duration. In the case of mortgage protection policies, these tend to be over the lifetime of the mortgage repayment schedule. In addition, my understanding is that different insurers do not use the same combination of rating factors. Accordingly, prices and availability of cover varies across the market, and will be priced in accordance with firms’ prior claims experience.
My officials contacted Insurance Ireland, the representative body for such providers on this issue recently. It stated that it is aware of a cases where a final decision on applications is being deferred in instances where applicants have displayed symptoms of COVID-19, been referred for, or undergoing COVID-19 testing, or had a positive COVID-19 diagnosis. It also stated that it is normal practice to defer a decision on any condition in these cases. However, it also stated that is unlikely that once the applicant has fully recovered from an illness that it would have any impact on the policy they are seeking to take out, although this does depend on the individual case and the severity of the impact of the infection. Insurance Ireland further noted that it understands that mortgage protection is not a universal requirement by banks, and that there are waiver conditions set out in the Consumer Credit Act where the lender may be able to proceed without the protection cover in place for mortgages in certain situations and this is at the lender’s discretion.
Notwithstanding this, the Deputy will be aware that both I and Minister of State Fleming have consistently and publicly stated that in the context of COVID-19 we expect insurance firms to treat their customers fairly, honestly, and in accordance with the Central Bank’s Consumer Protection Code. The Government will continue to work to protect customers during and after the COVID-19 crisis, and engage with the insurance industry in relation to how it responds to the needs of its customers. This commitment is included in the Programme for Government. Minister of State Fleming is due to meet with Insurance Ireland this week and the industry’s response to COVID-19 issues will be on the agenda.
Finally, where somebody feels they have been treated unfairly by a particular insurance provider, they have the option of making a complaint to the Financial Services and Pensions Ombudsman (FSPO). The FSPO 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.
163. Deputy Neale Richmond asked the Minister for Finance the amount of revenue generated from VAT, mineral oil tax and carbon tax on liquid fuel in 2019 and 2020; and if he will make a statement on the matter. [9464/21]
View answerI am advised by Revenue that receipts for Mineral Oil Tax (MOT) and carbon tax on liquid fuels for the years up to year 2019 are published on the Revenue website at:
https://www.revenue.ie/en/corporate/documents/statistics/excise/net-receipts-by-commodity.pdf
The provisional receipts from MOT and carbon tax for 2020 are shown in the table below.
|
Mineral Oil Tax |
Carbon Tax |
|
|
2020 €m |
2020 €m |
|
|
Petrol |
424.7 |
46.1 |
|
Aviation Gasoline |
0.5 |
0.06 |
|
Auto -diesel |
1,351.6 |
212.6 |
|
Marked Gas Oil |
37.5 |
65.3 |
|
Kerosene |
0.0 |
68.2 |
|
Fuel Oil |
0.6 |
1.3 |
|
LPG (Other) |
0.0 |
11.2 |
|
Auto LPG |
0.1 |
0.04 |
Regarding the VAT generated from liquid fuels, I am advised by Revenue that taxpayers are not required to separately identify the yield generated from a particular activity or product type on their VAT returns. However, using a combination of Revenue and third-party data, an estimate of the VAT yield across each of the different commodities types is provided below.
|
2019 €m |
2020 €m |
|
|
Petrol |
276.4 |
195.9 |
|
Aviation Gasoline |
0.2 |
0.2 |
|
Auto -diesel |
298.5 |
187.0 |
|
Marked Gas Oil |
52.2 |
47.6 |
|
Kerosene |
85.7 |
73.5 |
|
Fuel Oil |
53.2 |
60.5 |
|
LPG (Other) |
9.1 |
10.6 |
|
Auto LPG |
0.4 |
0.3 |
165. Deputy Seán Canney asked the Minister for Finance the basis of the decision by the Revenue Commissioners to recover all tax outstanding on foot of the pandemic unemployment payment support in one year and not four years as previously advised; and if he will make a statement on the matter. [9477/21]
View answer186. Deputy Seán Canney asked the Minister for Finance if he will review the method by which the Revenue Commissioners are treating persons who received the pandemic unemployment payment given that some taxpayers are facing large additional tax bills; and if he will make a statement on the matter. [9756/21]
View answerI propose to take Questions Nos. 165 and 186 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 in legislation 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 Revenue Commissioners are independent in the exercise of their functions. However, they advise me as follows:
The mechanism to tax the PUP, in common with other Department of Social Protection (DSP) payments, including Jobseekers Benefit and Illness Benefit, is by reducing the recipient’s tax credits and rate bands. However, in 2020 the PUP was not taxed in ‘real-time'in the normal manner due to the urgent requirement to get payments to people as quickly as possible, 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 not to be the case due to the continued prevalence of COVID-19. Any tax liabilities on PUP payments received in 2020 will be collected, interest free, by reducing the employees’ tax credits over 4 years, starting in January 2022. There is no change in that position which was confirmed by Revenue last September.
The continuation of the PUP into 2021 has re-established the practice of operating PAYE in the normal (real-time) manner for such payments. However, people receiving PUP payments in 2021 will only pay tax when they return to work. 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 Deputy.
When a PUP recipient returns to work, he or she should immediately cease the PUP claim with DSP. In turn, DSP will notify Revenue that the payment has ceased, and Revenue will then adjust the employee’s tax credits accordingly. For a person who is on PUP at the start of the year, the weekly amount is annualised on the Tax Credit Certificate (TCC), with knock on impacts on the tax credits and standard rate cut off point, i.e. as if the person will be on the PUP for the full year. When the person comes off PUP, the TCC is then amended to reflect the actual number of weeks that the person received the (PUP) payments.
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. Any delay in issuing the revised instruction to the employer will delay the employee receiving his or her full tax credit entitlements so prompt notification by the employee to the DSP is very important.
Specifically, regarding the taxation of PUP, the following important 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.
For example, if a single person is in receipt of the PUP for the months of January and February 2021 before then returning to work (i.e. 8 payments of PUP at €350 per week, totalling €2,800) the outstanding tax due on the payments received at that point is approximately €52. However, this amount will be offset fully or partly by the reduction in the total USC liability for the year because PUP payments are not liable to USC.
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 appropriate tax is collected. However, a jointly assessed couple can earn gross income (incl. PUP) of €635 per week before they have a tax liability.
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 (real-time) deduction arrangements now applying to the PUP for 2021 insures against this, as tax credits are set aside for offset against any tax due (on the PUP), rather than having employees face a higher additional liability at year end. It 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).
166. Deputy David Cullinane asked the Minister for Finance the reason a 10% tariff now applies to the importation of used cars from the UK if the cars were built in Europe as the country of origin but no tariff applies if the car was built in UK; and if he will make a statement on the matter. [9491/21]
View answer167. Deputy David Cullinane asked the Minister for Finance the reason 21% VAT is applied to the new 10% tariff now applied to used cars imported from the UK; and if he will make a statement on the matter. [9492/21]
View answer168. Deputy David Cullinane asked the Minister for Finance if the new 10% tariff on the importation of used cars from the UK only applies to newly registered cars from 2021 onwards; and if he will make a statement on the matter. [9494/21]
View answer169. Deputy David Cullinane asked the Minister for Finance the reason margin cars imported from the UK are subject to 21% VAT, given that VAT has already been paid on the car in UK that cannot be reclaimed by the importer; and if he will make a statement on the matter. [9495/21]
View answerI propose to take Questions Nos. 166 to 169, inclusive, together.
Following the withdrawal of the UK from the European Union, an import of a vehicle from Great Britain is treated as an import from a third country, i.e. a non-EU country. If a vehicle is imported from Great Britain into Ireland, the importer is required to complete a customs declaration and pay customs duty, if applicable, and VAT at 21% prior to presenting the vehicle for registration. Under customs law, VAT at import is chargeable on the customs value of the goods. The fact that VAT has been charged in Great Britain on used vehicles subsequently imported into the State has no bearing on their liability to VAT at import when imported into the EU.
Under the Protocol on Ireland/Northern Ireland, Northern Ireland will continue to apply and adhere to EU rules in relation to trade in goods with the result that there are no customs formalities, including customs declarations or payment of tariffs, on trade between Ireland and Northern Ireland. On 14 January, the UK introduced significant changes to the UK VAT margin scheme for used cars imported from Great Britain into Northern Ireland. These changes are not in compliance with provisions of EU law on VAT that apply in Northern Ireland as per Article 8 of the Protocol. Accordingly, used cars that are imported into NI from GB after 31 December 2020, under the rules currently in force in the UK are not single market goods and cannot be brought into the State as if they were. Therefore, when they are brought into the State, they are liable for VAT and duty on the same basis as used cars brought into the State from Britain.
Vehicles registered and used in Northern Ireland before the end of the Brexit transition period on 1 January 2021 can be registered here in the same way as before without any check on the customs status.
I am also advised by Revenue that from 1 January 2021, the EU-UK Trade and Cooperation Agreement (TCA) has eliminated tariff duties for trade between the EU and Great Britain where the relevant rules of origin are met. If the goods are of UK origin, then a 0% tariff rate applies. Under the terms of the TCA, goods of EU origin that were in use in the UK and that were subsequently imported into Ireland from Great Britain will not be eligible for the 0% tariff rate as they will not qualify as UK origin under the rules of origin.
To import a car of EU origin from Great Britain into Ireland, a customs declaration must be completed. Customs duty of 10% applies on the customs value of the car. The customs value is the invoice price plus the cost of transport and insurance. VAT at 21% is calculated on the customs value plus customs duty.
I am further advised that there is a Returned Goods Relief available for vehicles subject to strict EU conditions. Vehicles can be exported from the EU to a 3rd country and re-imported into the EU without the payment of Customs Duty provided all the required conditions for Returned Goods Relief are met. In very specific circumstances, relief from Value-Added Tax may also apply where the vehicle is re-imported into the EU by the same person that originally exported the goods out of the EU. The conditions are
- The vehicle must have been originally exported from the EU
- Must not have been altered and
- Must be re-imported within three years of export from the EU.
Details of how to claim returned goods relief for cars is on the Revenue website at www.revenue.ie/en/customs-traders-and-agents/customs-electronic-systems/aep/ecustoms-notifications/2021/ecustoms-notification-24-2021.pdf. If the car is of UK origin, it is important to note that the preferential tariff treatment must be claimed on import on the Customs declaration. Details on how to do this are also available on the Revenue website.
Cars imported into Ireland prior to 1 January 2021 can be registered as normal. The owner must provide documentation to prove that the car was imported into Ireland prior to 1 January 2021. An example of the documentation would be a sales invoice or a ferry ticket.
171. Deputy Duncan Smith asked the Minister for Finance when the VRT calculator will be up and running; his views on the website of the Revenue Commissioners; and if he will make a statement on the matter. [9534/21]
View answerMy Department has participated in, and contributed to, the whole-of-Government communications strategy and public information campaigns related to Covid-19.
My Department has provided information as appropriate via established channels of communication including the Department’s website, official social media accounts and stakeholder communications.
No additional expenditure has been incurred by my Department in relation to this.
172. Deputy Kathleen Funchion asked the Minister for Finance if childcare professionals who returned to work on 29 June 2020 will not be expected to pay tax on their net wages; and if he will make a statement on the matter. [9560/21]
View answerThe wage subsidy schemes have been a key component of the Government’s response to the continued Covid-19 crisis to support viable firms and encourage employment in the midst of these very challenging times.
The Temporary Wage Subsidy Scheme (TWSS) was introduced on 26 March 2020 and legislated for in section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020. 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.
The stated objective of both schemes is to support all employment and maintain the link between the employer and employee insofar as is possible, including through periods of the strictest public health restrictions that may have closed particular businesses, such as the childcare sector. It has also applied when and as the public health restrictions have been eased to help businesses to recover from the impact of a closure or reduced trade for a period. To that end, both supports have been available, regardless of whether or not the individual has actually been at work or not, as they are based on weekly pay to employees rather than hours worked. For employees, the "return to work" therefore does not impact on the application of treatment of the subsidy.
Payments made under the TWSS are 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 which were made to the category of individuals mentioned in the Deputy's question are subject to income tax and Universal Social Charge (USC) in the same way as is the case in relation to other categories or worker. While income tax and the USC on most income is deducted in real-time as and when the person is paid, the TWSS payments were not taxed in real-time and were instead liable to income tax and USC at the end of 2020.
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, and provides that “notwithstanding any other provision of the Act, the additional amount paid by the employer to a specified employee in accordance with paragraph (d) shall not be regarded as emoluments of the specified employee for the purposes of Chapter 4 of Part 42 of the Act and the Regulations, but shall be treated as income chargeable to tax on the specified employee under Schedule E within the meaning of section 19 of the Act”.
The Employment Wage Subsidy Scheme, which was legislated for under the Financial Provisions (Covid-19) (No. 2) Act 2020. The specific nature and terms of the EWSS arrangement are separate and distinct from the TWSS. EWSS re-establishes the normal requirement to operate PAYE and normal PRSI on all payments made to the employee by the employer. Employers operate payroll as normal and report employer and employee PRSI deductions based on the employee’s appropriate existing PRSI classes. This ensures employee social insurance contributions accumulate as normal and furthermore, that no additional tax liability on the salary payments made should accrue to employees.
As regards the TWSS, the Government have been consistent as regards the TWSS’s liability to tax from the outset of the payment. Indeed, I have been advised by Revenue that it clarified the tax treatment of the TWSS at employee level in the guidance material on the TWSS that it has published on its website since the commencement of the Scheme. Furthermore, Revenue actively engaged in facilitating webinars with the Employer Bodies, Accountancy Firms and Tax Practitioners to explain and clarify any issues for employers as regards the TWSS. For the information of the Deputy, the link directs to Revenue’s material on Frequently Asked Questions on the TWSS: https://www.revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-temporary-covid-wage-subsidy-scheme.pdf
Revenue made a Preliminary End of Year Statement available to all employees from 15 January 2021, including those who were in receipt of the TWSS. The Preliminary End of Year Statement includes information relating to an employee’s income received, including pensions and income from the Department of Social Protection, as well as their tax credit entitlements. For the tax year 2020, the Statement also includes information on the amounts of TWSS payments, if any, received by each employee. In addition, the Statement provides employees with a preliminary calculation of the income tax and USC position for 2020 and indicates whether their tax position is balanced, underpaid or overpaid for the year.
Upon viewing the Preliminary End of Year Statement through myAccount, which is Revenue’s secure online facility for individual taxpayer services, employees have an opportunity to complete their income tax return for 2020, declaring any additional income and claiming any additional tax credits due, for example qualifying health expenses, to arrive at their final liability for 2020.
When a liability is finalised, individuals may opt to fully or partially pay any income tax and USC liability through the Payments/Repayments facility in myAccount. Where individuals do not opt to fully or partially pay, Revenue will collect the liability by reducing their tax credits over 4 years, interest free. The reduction of tax credits will start in January 2022.
Finally, the Preliminary End of Year Statement sets out a provisional tax position for 2020, based on information available on Revenue records, including any Temporary Wage Subsidy Scheme (TWSS) payments reported by the individual’s employer. Revenue published provisional statistics in relation to the preliminary end of year tax position for all PAYE taxpayers for the year 2020, on 14 January 2021 which is available to view on Revenue’s website PAYE Preliminary End of Year Statements.
