Written Answers Nos. 206-233
206. Deputy Pearse Doherty asked the Minister for Finance if he will consider reducing VRT on second-hand imported vehicles to offset the increase in VRT in order to address the disadvantage caused by the application of the VAT margin scheme for second-hand cars imported from Great Britain into Northern Ireland. [11547/21]
View answerVehicle Registration Tax is provided for in the 1992 Finance Act and subsequent amending legislation and is due on a vehicle’s first registration in the State. The tax is calculated on the basis of the Open Market Selling Price (OMSP) and the CO2 and NOx emissions of the vehicle. There is no provision to provide different VRT rates on the basis of the previous ownership of the vehicle.
207. Deputy Cian O'Callaghan asked the Minister for Finance if he supports the legal implementation of public country-by-country reporting with regard to the proposed EU directive discussed at the Council of Ministers that aims to improve tax transparency and ensure the full disclosure of tax information by multinationals operating here; and if he will make a statement on the matter. [11716/21]
View answerIreland supports transparency and good governance for corporates including “country-by-country” reporting by MNEs to national tax authorities. The Finance Act 2015 introduced obligations for relevant companies to report to the Revenue Commissioners in line with agreements on tax transparency agreed as part of the OECD BEPS process.
The European Commission made a proposal in April 2016 for a Directive to amend Directive 2013/34/EU (the Accounting Directive) as regards disclosure of income tax information by certain undertakings and branches (country-by-country reporting). While Ireland is broadly in favour of tax transparency, we have opposed this proposal as the legal base is not in keeping with the Treaties and that as it relates to tax, it should be the responsibility of Finance Ministers to negotiate in the ECOFIN Council formation rather than at COMPET Council. Proposals on taxation at EU level, should be progressed on the correct legal basis to ensure that laws are legally robust and secure against any future challenges so that shared objectives for transparency and good governance are comprehensively realised. The principled position Ireland is taking is shared by a number of other Member States and indeed the Council Legal Service. Further, it is relevant that the Oireachtas adopted a Reasoned Opinion in June 2016 to the effect that this proposed Directive is a tax matter and does not meet the principle of subsidiarity.
Ireland has long been a supporter of, and a beneficiary of tax transparency. Ireland has continuously implemented the necessary measures to ensure we are up to date with international best practice on tax transparency and exchange of information negotiated at the OECD, as well as supporting the parallel EU efforts through agreement of the Directive on Administrative Cooperation in the field of taxation. This covers administrative cooperation between EU Member States on tax matters, and automatic exchange of tax rulings, financial account data as well as mandatory disclosure of cross-border tax arrangements. It should be noted that of the 78 jurisdictions reviewed to date by the Global Forum on Transparency and Exchange of Information for Tax Purposes, Ireland is one of only a small number of jurisdictions to have been found to be fully compliant with new international best practice.
Notwithstanding Ireland's views and those of other EU Member States and the Council Legal Service on the legal basis, this Proposal now has the necessary support to proceed from COMPET Council. Ireland will engage constructively in future negotiations on this Proposal.
208. Deputy Malcolm Noonan asked the Minister for Finance if his attention has been drawn to the difficulties for those buying homes in respect of mortgage approvals lasting for only six months in view of current restrictions on the building industry causing delays in home completions (details supplied); if such mortgage holders will have to reapply for their mortgages through no fault of their own; and if he will make a statement on the matter. [11732/21]
View answerI 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 COVID-19. 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 or a mortgage 'approval-in-principle' 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 individual lenders. However, the Central Bank advises that when a lender offers a mortgage to a consumer, the Consumer Protection Code provides that the lender must include the length of time for which the mortgage offer is valid in the offer document.
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.
If a mortgage applicant is not satisfied with how a regulated entity is dealing with them, or they believe that the regulated entity 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 entity. If they are still not satisfied with the response from the regulated entity, the response to their complaint from the regulated entity is required to include details for the borrower on how to refer their complaint to the Financial Services and Pensions Ombudsman.
209. Deputy Bríd Smith asked the Minister for Finance if the minimum allocation to the Horse and Greyhound Fund is bound by the wording of Part 3 section 12(4) of the Horse and Greyhound Racing Act 2001, which specifies an amount equivalent to the revenue from excise duty on off-course betting paid into the Exchequer in the preceding year or the year 2000 increased by reference to the consumer price index, whichever is the greater; and if he will make a statement on the matter. [11739/21]
View answerUnder Section 12 of the Horse and Greyhound Racing Act, 2001, the horse and greyhound racing industries receive financial support from the State through the Horse and Greyhound Racing Fund (the Fund). In the period 2001 to 2020 a total of €1,365,991,713 billion has been paid from the Fund in accordance with the provisions of the Act. Monies are paid out of the fund in the ratio of 80% to Horse Racing Ireland and 20% to Rásaíocht Con Éireann (RCÉ Greyhound Racing Board) as specified in Section 12 (6) of the Act.
The initial funding model for the Horse and Greyhound Racing Fund provided that the Fund would each year be financed by an amount equal to the revenue from excise duty on off-course betting in the preceding year or the year 2000 increased by reference to the Consumer Price Index, whichever was greater (section 12(4) of the Act). This formula applied for the years 2001-2008.
At the outset (2001) the Fund was financed entirely from the proceeds of betting duty (€58.9m). However, because of the decrease in the level of duty collected on betting and the migration of betting to on-line tax free platforms, an increasing amount of exchequer funding has been required for the Fund. The Exchequer contribution reached a peak of €39.9m in 2008 in order to deliver on the indexation formula outlined above. (Note: The Betting (Amendment) Act 2015 extended the betting duty regime to remote betting and exchanges.)
The indexation formula was abandoned in 2009. The approach employed since 2009 has been to unilaterally decide on the amount to be provided to the Horse and Greyhound Racing Fund each year.
210. Deputy Denise Mitchell asked the Minister for Finance if his attention has been drawn to the fact that tax credits are being deducted from pandemic unemployment payment and temporary wage subsidy scheme recipients in this financial year; if it was the direction of his Department that tax credits would not be deducted from recipients of these respective payments until 2022; if there were exceptions to this; and if he will make a statement on the matter. [11760/21]
View answerThe 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 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, meaning the collection of any tax due was deferred until year end. Likewise, employees that received subsidies under the Temporary Wage Subsidy Scheme (TWSS), which ran from 26 March 2020 to 31 August 2020, were not taxed in ‘real-time’ on those payments. Instead the collection of tax and Universal Social Charge (USC) was deferred until the end of 2020.
Revenue advise me that this approach to the taxation of both schemes 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. Revenue has also advised me that the continuation of the PUP into 2021 and the operation of the Employment Wage Subsidy Scheme (EWSS), which replaced the TWSS from 1 September 2020 have re-established the practice of operating PAYE in the normal (real-time) manner for such payments. As such the ‘year-end’ taxing arrangement that applied to both the PUP and TWSS in 2020 is no longer applicable in 2021.
Finally, it is important to note that Revenue acts independently in the administration of the tax system. Therefore, once legislation provides that an income source is taxable, the operation of tax deductions on such income is a matter exclusively for Revenue to determine.
211. Deputy Sorca Clarke asked the Minister for Finance the cost of the NAMA boardroom at its new premises. [11772/21]
View answer213. Deputy Sorca Clarke asked the Minister for Finance the cost of the new NAMA CEO office at its new premises. [11774/21]
View answerI propose to take Questions Nos. 211 and 213 together.
I am advised that NAMA leases office space from the NTMA. In 2019, the NTMA moved to a new premises at Treasury Dock, North Wall Quay. Accordingly, NAMA also moved its offices to the new premises.
Fit out of the entire space was required prior to occupation by the NTMA and NAMA.
The NAMA CEO’s office is located on the 2nd floor of Treasury Dock and the total cost of the fit out was €10,690.
The NAMA boardroom comprises an inner ground-floor space and the total cost of the fit out was €67,525, which includes audio visual equipment.
I am advised that both spaces are of a basic practical design with fit out limited to necessary furnishings and items only, including furniture, blinds, carpet and ICT equipment.
212. Deputy Sorca Clarke asked the Minister for Finance the cost of the NTMA boardroom at its new premises. [11773/21]
View answer214. Deputy Sorca Clarke asked the Minister for Finance the cost of the new NTMA CEO office at its new premises. [11775/21]
View answer215. Deputy Sorca Clarke asked the Minister for Finance the cost of the new premises acting as an administrative centre for NAMA and the NTMA. [11776/21]
View answerI propose to take Questions Nos. 212, 214 and 215 together.
The NTMA have informed me that their Treasury Dock premises contains a large meeting room which is used to host board meetings as well as other meetings and events. I am advised that this room can hold 26 persons in boardroom style, however, it can also be used as large meeting rooms and so is designed to allow for a variety of set ups. The cost of the fit out of this room amounted to approximately €130,000 ex VAT.
The cost for the fit out of the NTMA CEO office amounted to approximately €23,300 excluding VAT.
As at 1 March 2021, I am informed that the NTMA has paid costs of €25.4m for fit-out works in respect of Treasury Dock, a building which also houses the National Asset Management Agency, the Strategic Banking Corporation of Ireland and Home Building Finance Ireland.
216. Deputy Cormac Devlin asked the Minister for Finance if he will consider, in view of the level 5 Covid-19 restrictions being in place for a significant proportion of the duration of the stay and spend scheme, reviewing and revamping the scheme to help restart the hospitality industry in the coming months; and if he will make a statement on the matter. [11829/21]
View answer230. Deputy Paul McAuliffe asked the Minister for Finance if takeaway food and drink is eligible to be claimed under the stay and spend scheme; and if he will make a statement on the matter. [12074/21]
View answer233. Deputy Christopher O'Sullivan asked the Minister for Finance if the stay and spend tax credit will be extended until the end of 2022; and if he will make a statement on the matter. [12132/21]
View answerI propose to take Questions Nos. 216, 230 and 233 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.
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, with the exception of some short periods, public health restrictions have had the effect of impeding the operation of the incentive as originally envisaged.
Decisions on next steps relating to the scheme have yet to be taken and I will continue to assess matters as circumstances evolve.
However, Stay and Spend should not be viewed in isolation from the other measures put in place to support businesses generally, including the hospitality sector.
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) continues to be a key component of the Government’s response to the 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 and, as announced by Government last week, the scheme is being extended to the end of June 2021.
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.
217. Deputy Éamon Ó Cuív asked the Minister for Finance the discussion his Department has had with the Central Bank in respect of reintroducing a bank moratorium similar to that of 2020 for businesses (details supplied); and if he will make a statement on the matter. [11869/21]
View answerAs the Deputy will be aware on 18 March last the Banking and Payments Federation of Ireland (BPFI) announced a coordinated approach by banks and other lenders to help their customers who were economically impacted by the Covid-19 crisis. The measures included flexible loan repayment arrangements where needed, including loan payment breaks initially for a period up to three months and then subsequently extended for up to six months. The implementation of this voluntary moratorium by the banking industry was a flexible response to the emerging Covid-19 crisis and ensured that a large volume of affected customers could benefit quickly during a fast moving and evolving public health crisis.
The Deputy may wish to note that borrowers whose payment break has ended are been given an option to return to full repayments based on the same term of the loan or to extend the term of the loan or to engage further with their bank on suitable arrangements. The BPFI reported, that as of 31 December 2021, approximately 49% of SMEs returned to repaying on the existing term whilst 46% returned to repaying on extended term basis and just over 5% returned on reduced repayments.
As Minister for Finance I have no function in the commercial decisions made by banks. However, the Central Bank has confirmed that there is no regulatory impediment to lenders offering payment breaks to borrowers, providing they are appropriate for the individual borrower circumstance. The BPFI has also reiterated that standard payment breaks continue to be part of the wide range of tailored solutions which are being made available to customers upon assessment of their situation.
SME borrowers have regulatory protections via the Central Bank's SME lending regulations. The SME Regulations https://centralbank.ie/news/article/regulations-for-firms-lending-to-smes-from-2016 set out the required treatment of SMEs by regulated entities in relation to various aspects of business lending. This includes detailed provisions around the credit application process, requirements regarding security or collateral, credit refusals and withdrawals, handling complaints, managing arrears and having in place policies for engaging with SMEs in financial difficulty. The options could include additional flexibility, and this could be a short-term arrangement such as additional periods without payments or interest-only repayments, or if appropriate more long term arrangements. The Central Bank recently wrote to all lenders indicating that lenders are to ensure that they have sufficient expert resources to assess individual borrower circumstances, and to offer appropriate and sustainable solutions to affected borrowers in a timely manner in line with regulatory requirements. The Central Bank’s clear expectation is that lenders engage effectively and sympathetically with distressed borrowers.
In addition, Credit Review https://www.creditreview.ie was established to assist those SMEs and farm borrowers that have had credit applications of up to €3 million refused or indeed an existing credit facility withdrawn or amended by the participating bank. SMEs can apply to Credit Review after exhausting the internal appeals process in the participating institution, which are currently AIB, BOI, Ulster Bank and Permanent TSB.
It should be noted that the Central Credit Register does not produce credit scores; rather the information on a credit report provided by the Central Credit Register is factual in nature and the information is provided to the Central Credit Register by lenders. It contains no guidance, recommendation or prohibition for lenders on what decision they should make on an application for credit or repayment arrangements agreed with borrowers. Subject to complying with applicable law and regulatory requirements, it is a matter for lenders to make their own lending decisions in accordance with their own credit policies and risk appetites.
I will continue to work with the Central Bank, as regulator, to ensure that the Central Bank consumer protection and other applicable frameworks will be fully available to all borrowers that will still need support.
218. Deputy Catherine Connolly asked the Minister for Finance further to Parliamentary Question No. 175 of 17 February 2021, if he will address the issue raised, namely, that the Revenue Commissioners had not informed the public of a change in rules prior to 8 February 2021 (details supplied); the steps he will take to address the lack of legal certainty on the rules for businesses bringing vehicles from Northern Ireland; and if he will make a statement on the matter. [11944/21]
View answerSince 1 January, imports of goods from Great Britain must be declared to customs and are liable to customs duty, if applicable, and VAT at import. Under the terms of the Ireland/Northern Ireland Protocol, trade in goods between the State and Northern Ireland should continue as before, with no requirement for customs declarations or liability to customs duty and VAT at import. The information published on Revenue’s website on 8 January set out this position and also advised that proof of import into Northern Ireland from Great Britain in accordance with the Protocol would be required in respect of cars imported there after 31 December, before registration of such vehicles could proceed.
In the case referred to by the Deputy, it is suggested in the details supplied that the cars in question were imported into Northern Ireland from Great Britain before the end of December and if this is the case and the dealer can produce evidence of this then the cars can be registered without the need for a customs declaration and payment of VAT at import. Revenue will examine the matter again if the dealer provides full details regarding the transactions in question.
In relation to their website content, Revenue advise me that they make every effort to ensure it is kept up to date and that the public is informed in an accurate and accessible way. In relation to their guidance on importing used cars, the information was clear and accurate from the beginning of the year. The decision by the UK to introduce changes to the VAT treatment of used cars imported into Northern Ireland from Great Britain in mid-January, to apply retrospectively from 1 January appears to be contrary to Article 8 of the Protocol. Pending resolution of this issue between the EU and UK, the steps taken by Revenue are designed to prevent widespread abuse, loss of tax revenues and damage to the motor industry in Ireland.
219. Deputy Thomas Pringle asked the Minister for Finance if he will report on the commission on welfare and taxation; the membership of the commission; the resources and terms of reference of same; when the commission will be operational; and if he will make a statement on the matter. [11948/21]
View answerI wish to advise the Deputy that membership of the Commission on Taxation and Welfare is under consideration. The terms of reference are being finalised and decisions will be made shortly on resourcing matters. The operational date of the Commission will be confirmed in due course.
220. Deputy Richard Boyd Barrett asked the Minister for Finance the supports available to small start-up businesses that have not begun trading yet but have been attempting to start up in the midst of the Covid-19 crisis; if directors of such start-up companies can avail of any income supports; if a company (details supplied) that is attempting to trade since the crisis can avail of funding supports under current Covid specific supports for businesses; and if he will make a statement on the matter. [11950/21]
View answerThe main direct Covid-19 supports under the aegis of my Department and the Revenue Commissioners are the Employment Wage Subsidy Scheme (EWSS) and the Covid Restriction Support Scheme (CRSS).
The EWSS was legislated for under the Financial Provisions (Covid-19) (No. 2) Act 2020. The scheme is an emergency measure to deal with the impact of the Covid-19 pandemic on the economy and to deliver an enterprise support to employers based on business eligibility delivering a per-head subsidy on a flat rate basis.
The EWSS is administered by Revenue on a 'self-assessment' basis. The eligibility criteria for EWSS states that in addition to having tax clearance for the duration of the scheme, an employer must be able to demonstrate that their business is expected to experience a 30% reduction in turnover or orders between 1 July and 31 December 2020 for 2020 paydates and between 1 January to 30 June 2021 for 2021 paydates, looking at the period as a whole rather than on a monthly basis; and this disruption is caused by COVID-19.
For 2020 paydates, this reduction in turnover or orders was relative to
- the same period in 2019 where the business was in existence prior to 1 July 2019;
- where the business commenced trading between 1 July and 1 November 2019, the date of commencement to 31 December 2019; or
- where a business commenced after 1 November 2019, the projected turnover or orders for 1 July 2020 to 31 December 2020.
For 2021 paydates, this reduction in turnover or orders is relative to
- the same period in 2019 where the business was in existence prior to 1 January 2019;
- where the business commenced trading between 1 January and 1 May 2019, the date of commencement to 30 June 2019; or
- where a business commenced after 1 May 2019, the projected turnover or orders for 1 January 2021 to 30 June 2021.
Proprietary directors are directors who can control, either directly or indirectly, more than 15% of the share capital of a company.
Revenue issued a press release on 31 August 2020 confirming that the EWSS can be claimed in respect of proprietary directors from 1 September 2020, subject to the following conditions:
- the employer meets the eligibility criteria for the EWSS,
- the proprietary director is on the payroll of the eligible employer, and
- the proprietary director has been paid wages which were reported to Revenue on the payroll of the eligible employer at any stage between 1 July 2019 and 30 June 2020.
Where a person is a proprietary director of two or more eligible companies, a claim for an EWSS can only be submitted in respect of a single company.
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. A business must be able to demonstrate that, because of the Covid restrictions, the turnover of the qualifying activity (“relevant business activity”) during the period of restrictions will be no more than 25% of the “relevant turnover amount”.
The “relevant turnover amount” is calculated by reference to a business’s average weekly turnover for the relevant business activity in a prior period, the identification of which period depends on whether the business is an “established business” or a “new business”. An established business is a business that commenced trading prior to 26 December 2019. The relevant turnover amount for a “new business”, i.e. a business commenced by a person between 26 December 2019 and 12 October 2020, is based on the average weekly turnover of the business in the period from commencement to 12 October 2020.
A new business who was prohibited from operating due to Government restrictions in a week or weeks in the period from commencement to 12 October, and who can demonstrate to Revenue that the business received no turnover in that week or weeks, can exclude the week or weeks when calculating the average weekly turnover. This ensures periods in 2020, during which a business was unable to operate because of public health restrictions, do not impact negatively on the business’s average weekly turnover and, therefore, on its entitlements under the scheme.
Additional information on the wide range of supports available to help businesses impacted by the COVID-19 crisis is available on the Department of Enterprise, Trade and Employment website at https://enterprise.gov.ie/en/What-We-Do/Supports-for-SMEs/COVID-19-supports/ .
221. Deputy Richard Bruton asked the Minister for Finance if his attention has been drawn to the fact that the Covid-19 restrictions support scheme is being denied to dog training, grooming and day care businesses on the grounds that they could have remained open, which would be entirely out of step with the provisions of level 5; and if he will make a statement on the matter. [11954/21]
View answerThe 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. 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 carry on a trade or trading activities, the profits from which are chargeable to tax under Case I of Schedule D. The trade must be carried on from a business premises that is located in a region subject to restrictions introduced in line with the Government’s ‘Living with Covid-19 Plan’, with the result that the business is required to prohibit or considerably restrict customers from accessing its business premises.
To make a claim under the CRSS, a business must be able to demonstrate that, because of the Covid restrictions, the turnover of the business in the period for which the restrictions are in operation, and for which a claim is made, will be no more than 25% of an amount equal to the average weekly turnover of the business in 2019 (or average weekly turnover in 2020 in the case of a new business) multiplied by the number of weeks in the period for which a claim is made.
Where, as a result of the restrictions, a business is forced to temporarily close or is required to operate at significantly reduced levels, the business may qualify for support under the scheme. It is not sufficient that a business is experiencing a reduction in demand for its services because of Covid-19. To qualify under the scheme, the reduction in business activity must be because, under the specific terms of the restrictions in operation, customers are restricted from accessing the business premises in which the business activity is carried on.
The Government has published a list of essential services (most recently updated on 2 February 2021) which may continue even where restrictions in line with Level 5 of the Living with Covid Plan are in operation. The provision of veterinary, animal welfare and related services are regarded as essential services.
If a business supplies a combination of essential and non-essential services relating to dogs, then the business may qualify for CRSS in respect of that part of its business which relates to the provision of non-essential services. If the Deputy’s question is based on a particular case, it is recommended that the full facts of the case are submitted to Revenue so that they can make a determination on any aspects of the business concerned that qualify for CRSS.
222. Deputy Fergus O'Dowd asked the Minister for Finance if he will respond to concerns raised by a person (details supplied) in respect of their difficulties accessing vital loans through the Strategic Banking Corporation of Ireland, SBCI, scheme with the reasons for refusals being that their business operates in the motor industry sector; and if he will make a statement on the matter. [11958/21]
View answerAs the Deputy will be aware, one of my main concerns and that of Government is to ensure that SMEs have access to sufficient liquidity, and that access to credit for viable SMEs is maintained. A range of supports have been put in place to support businesses including the Covid-19 Credit Guarantee Scheme which is operated by the SBCI on behalf of the Department of Enterprise Trade and Employment.
However, 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. Accordingly, 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 Relationship Frameworks for BOI can be found at the following link: BOI: https://www.gov.ie/en/publication/fc36e6-bank-of-ireland-relationship-framework-march-2012/ .
Regulated financial service providers that offer credit to SMEs are required to comply with the Central Bank (Supervision and Enforcement Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015, which are generally refe rred to as the SME Regulations. These set out the required treatment of SMEs by regulated entities in relation to various aspects of business lending. This includes detailed provisions around the credit application process, requirements regarding security or collateral, credit refusals and withdrawals, handling complaints, managing arrears and having in place policies for engaging with SMEs in financial difficulty.
The SME Regulations also specify that borrowers must be informed about a regulated entity’s internal appeal process in respect of a decision on whether to grant credit. The SME Regulations also state that borrowers with participating lenders should be informed of the Credit Review Office where the participating lender’s decision in relation to alternative arrangements are subject to review by the Credit Review Office. The Credit Review Office (https://www.creditreview.ie ) was established to assist those SMEs and farm borrowers that have had credit applications of up to €3 million refused or have an existing credit facility withdrawn or amended by the participating bank or in relation to alternative arrangements for borrowers in difficulty. SMEs can apply to Credit Review after exhausting the internal appeals process in the relevant participating institution, which are currently AIB, BOI, Ulster Bank and Permanent TSB.
223. Deputy Catherine Murphy asked the Minister for Finance the amount of value added tax collected from the 9% rate to date since its reintroduction; and the amount forgone since the reintroduction of the 9% rate. [11970/21]
View answer224. Deputy Catherine Murphy asked the Minister for Finance the amount of value added tax forgone since the standard rate of 23% was reduced to 21%; and if he has conducted a cost-benefit analysis in respect of the reduction. [11971/21]
View answerI propose to take Questions Nos. 223 and 224 together.
The temporary reduction of the VAT rate on tourism and hospitality in Budget 2021 was projected at that time to cost €336m. The temporary reduction in the standard rate of VAT announced in the July Stimulus was projected to cost €440m.
I am advised by Revenue that it is not yet possible to separately report the amount of tax collected at different VAT rates since these changes, or the actual amount foregone. Regular VAT returns, usually filed by trader every two months, do not report collection by VAT rate.
The Revenue Ready Reckoner published at https://www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf contains, on page 28, the most current estimates of the likely cost foregone from various changes to VAT rates or extensions to the current rates. These are the best available estimates but clearly are sensitive to change due to ongoing impacts of the COVID-19 pandemic.
225. Deputy Michael Healy-Rae asked the Minister for Finance his views on matters raised in correspondence (details supplied) regarding the help-to-buy scheme; and if he will make a statement on the matter. [12010/21]
View answerThe Help to Buy (HTB) incentive was introduced in 2017. The measure is currently scheduled to expire on 31 December 2021.
HTB gives a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid in Ireland over the previous four years, subject to limits outlined in the legislation. An increase in the supply of new housing remains a priority aim of Government policy.
The scheme is designed to stimulate the supply of new houses in the housing market and to assist first-time buyers in accumulating a deposit for a new home. In order to further help meet these goals, I announced an enhancement to the existing scheme with effect from 23 July last for the remainder of 2020 as part of the July Stimulus Package. The legislation that gives effect to this is set out in the Financial Provisions (Covid-19) (No.2) Act 2020. The Finance Act 2020 further extended the period of application of the enhanced levels of support until 31 December 2021.
As regards the negative impact of Covid-19 related restrictions on employment and the ability to qualify for HTB, the Deputy may wish to be aware that Revenue have advised as follows. Where an underpayment of tax arises for the year 2020 as a result of amounts received under the TWSS or PUP, Revenue will allow a claim for HTB relief for the amount of income tax paid for 2020 and will not require the outstanding tax liability to be paid in advance where the underpayment of tax is due to be collected from 2022 by reducing the claimant’s tax credits. This will only apply where all other conditions of the HTB scheme are satisfied.
In relation to the issue of extending HTB, the question of the future of HTB support beyond its current expiry date is a matter that will be considered in due course in the context of Budget 2022 and the subsequent Finance Bill.
226. Deputy Catherine Murphy asked the Minister for Finance the way in which jointly assessed persons are treated in respect of tax on the pandemic unemployment payment in instances in which one person remains in full-time employment while the other is in receipt of the payment; if his attention has been drawn to instances in which the person in full-time employment is bearing the liability (details supplied). [12011/21]
View answerThe Pandemic Unemployment Payment (PUP) is a social welfare payment for workers (employees and self-employed) who are out of work 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. They reflect the standard approach to taxation of social welfare type payments. Such payments are liable to income tax but exempt from the Universal Social Charge (USC) and Pay Related Social Insurance (PRSI).
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. The PUP was not taxed in ‘real-time’ in the normal manner in 2020, meaning the collection of any tax due was deferred until year end. This approach was adopted to ensure payments reached recipients as quickly as possible given the suddenness of the pandemic and on the 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.
Revenue advise me as follows:
The continuation of the PUP and the Employment Wage Subsidy Scheme (EWSS) into 2021 has re-established the practice of operating PAYE in the normal (real-time) manner for such payments. However, for most people receiving PUP payments in 2021, they will only pay tax when they return to work. Revenue has published information on the taxation of the PUP at: www.revenue.ie/en/life-events-and-personal-circumstances/pup-tax-liability/index.aspx , which may be of interest to the Deputy.
The position for married couples/civil partners may be slightly different to that of other taxpayers. 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. In jointly assessed situations where one spouse is self-employed and receiving the PUP and the other is a PAYE worker, the standard mechanism for taxing the (PUP) payment is by treating the self-employed spouse as receiving the subsidy for the full year and reducing the combined tax credits accordingly. This standard mechanism is the appropriate one that would apply in the case mentioned in the Deputy's question.
When the ‘self-employed spouse’ returns to work, s/he 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 ‘PAYE spouse’s’ tax credits to reflect the fact that the payment has ceased. A revised instruction (Revenue Payroll Notification) will then issue to the ‘PAYE spouse’s’ employer to reflect the updated position and the revised TCC will issue to them in paper form and via myAccount . Any delay in issuing the revised instruction to the employer will delay receipt of their full tax credit entitlements, so prompt notification by the ‘self-employed spouse’ to the DSP is very important.
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 taxpayers having further underpayments in the years ahead in addition to the 2020 liabilities, which could cause financial difficulties down the road. The normal 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 taxpayers face a higher additional liability at year end.
Finally, the Deputy may be interested to note that there are a range of additional measures in place to assist self-employed taxpayers whose businesses are adversely impacted by COVID-19. These include Debt Warehousing for a range of taxes, offsetting of losses for 2020 against profits for 2019 thereby reducing the income tax payable on those (2019) profits, and offsetting of 2020 losses against other income for the year, including PUP payments. Further information regarding these and other supports is available on the Revenue website at link: www.revenue.ie/en/corporate/communications/covid19/filing-and-paying.aspx .
227. Deputy Richard O'Donoghue asked the Minister for Finance his views on increasing the primary medical certificate thresholds in line with VRT increases as per budget 2021; and if he will make a statement on the matter. [12027/21]
View answerThe Disabled Drivers & Disabled Passengers Scheme provides relief from VRT and VAT on the purchase and use of an adapted car, as well as an exemption from motor tax and an annual fuel grant. Details of these reliefs and the grant in respect of fuel usage are available on the Revenue website at the following link: https://www.revenue.ie/en/importing-vehicles-duty-free-allowances/guide-to-vrt/reliefs-and-exemptions/scheme-for-persons-with-disabilities.aspx
The relief from Value Added Tax and Vehicle Registration Tax are generous in nature amounting to up to €10,000, €16,000 or €22,000, depending on the level of adaption required for the vehicle.
It should be noted that the new VRT charging table does not necessarily result in increased VRT rates. VRT is an emissions-based tax and therefore the amount of VRT incurred will vary across different vehicle makes and models. Typically, the new rates structure will result in increases for high emission vehicles, and decreases for lower emission vehicles.
228. 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. [12034/21]
View answerThe Pandemic Unemployment Payment (PUP) is a social welfare payment for workers (employees and self-employed) who are out of work 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. They reflect the standard approach to taxation of social welfare type payments. Such payments are liable to income tax but exempt from the Universal Social Charge (USC) and Pay Related Social Insurance (PRSI).
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. The PUP was not taxed in ‘real-time’ in the normal manner in 2020, meaning the collection of any tax due was deferred until year end. This approach was adopted to ensure payments reached recipients as quickly as possible given the suddenness of the pandemic and on the 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.
Revenue are statutorily independent in the performance of their functions and advise me as follows:
The continuation of the PUP and the Employment Wage Subsidy Scheme (EWSS) into 2021 has re-established the practice of operating PAYE in the normal (real-time) manner for such payments. However, for most people receiving PUP payments in 2021, they will only pay tax when they return to work. Revenue has published information on the taxation of the PUP at: www.revenue.ie/en/life-events-and-personal-circumstances/pup-tax-liability/index.aspx , which may be of interest to the Deputy.
The position for married couples/civil partners may be slightly different to that of other taxpayers. 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. In jointly assessed situations where one spouse is self-employed and receiving the PUP and the other is a PAYE worker, the standard mechanism for taxing the (PUP) payment is by treating the self-employed spouse as receiving the subsidy for the full year and reducing the combined tax credits accordingly. This standard mechanism is is being used in the case referred to in the Deputy's question.
When the ‘self-employed spouse’ returns to work, s/he 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 ‘PAYE spouse’s’ tax credits to reflect the fact that the payment has ceased. A revised instruction (Revenue Payroll Notification) will then issue to the ‘PAYE spouse’s’ employer to reflect the updated position and the revised TCC will issue to them in paper form and via myAccount . Any delay in issuing the revised instruction to the employer will delay receipt of their full tax credit entitlements, so prompt notification by the ‘self-employed spouse’ to the DSP is very important.
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 taxpayers having further underpayments in the years ahead in addition to the 2020 liabilities, which could cause financial difficulties down the road. The normal 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 taxpayers face a higher additional liability at year end.
Finally, the Deputy may be interested to note that there are a range of additional measures in place to assist self-employed taxpayers whose businesses are adversely impacted by COVID-19. These include Debt Warehousing for a range of taxes, offsetting of losses for 2020 against profits for 2019 thereby reducing the income tax payable on those (2019) profits, and offsetting of 2020 losses against other income for the year, including PUP payments. Further information regarding these and other supports is available on the Revenue website at link: www.revenue.ie/en/corporate/communications/covid19/filing-and-paying.aspx .
229. Deputy Catherine Connolly asked the Minister for Finance the steps he is taking to ensure that solicitor client accounts are exempt from negative interest rate charges in order to ensure that persons are not subject to a double charge by the banks, thereby reducing unnecessary financial pressures on consumers; and if he will make a statement on the matter. [12058/21]
View answerAs 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 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.
231. Deputy Richard Boyd Barrett asked the Minister for Finance if he will address a matter regarding actions by a company (details supplied); and if he will make a statement on the matter. [12109/21]
View answerAs the Deputy will be aware, I am not in a position to comment on specific taxpayers. However it should be noted that the details supplied refer to a matter occurring prior to 2015 and the Deputy will be aware that the film relief has been completely restructured since that time. Prior to 2015 the scheme provided tax relief to individuals investing in the film industry. In Finance Act 2015 the relief was restructured to a corporation tax credit which now provides direct support to film producer companies. The details supplied therefore relate to a time when the tax relief was claimed by investors, rather than the film production companies.
I am aware that there have been reports of industrial relations concerns in the industry and the Deputy will be aware that I have taken steps in recent Finance Acts to address these issues. Finance Act 2018 amended the section 481 certification process to provide that the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media, after considering an application and applying a set of tests, may issue a Cultural certificate to a producer company stating that a film is qualifying film for the purpose of the credit. One of these tests relates to employment on the qualifying film. The application includes an “Undertaking in respect of quality employment” concerning employment practices on the film being certified and any adverse decisions of the Workplace Relations Commission against the company or companies within the film group.
The Film Regulations provide for the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media to set conditions relating to employment when issuing a certificate for a qualifying film. Regulation 4 details that these conditions are to be met not just by a producer company but also by the qualifying company (a designated activity company wholly owned by the producer company which exists solely for the purpose of making the one qualifying film).
Where a producer company or qualifying company fails to satisfy or comply with a condition or obligation specified in a certificate, any credit claimed subsequent to that certificate may be an unauthorised amount and may be subject to recoupment by Revenue.
With regard to any clawback of the film credit, I would note that the Revenue Commissioners are independent in their administration of the tax system. However I am advised that Revenue carries out a comprehensive programme of compliance operations each year across a broad range of economic sectors, including the film industry. Many of the operations are carried out on a multi-agency basis, which can include officials from the Department of Employment Affairs and Social Protection (DEASP) and the Workplace Relations Commission. The primary role of these joint investigation units, JIUs, is to detect non-compliance with tax and duty obligations, which includes non-operation of the PAYE system on foot of bogus self-employment.
Additionally, I am informed by Revenue that it monitors developments in labour market trends in conjunction with the DEASP. As part of that ongoing work, Revenue are assisting DEASP in developing a new Code for Determining Employment or Self-employment which is expected to be finalised early in 2021.
232. Deputy Sean Sherlock asked the Minister for Finance if he has engaged with National Broadband Ireland on any aspect of broadband provision in the past six months; and the outcome of any engagement. [12119/21]
View answerI wish to advise the Deputy that I have not engaged with National Broadband Ireland on any aspect of broadband provision in the past six months.
