Vol. 420 No. 4
75 Mr. Kavanagh asked the Minister for Finance if he will have consultations in order to ensure that those engaged in the family farm, including the spouse, will in future be treated for tax relief purposes in the same manner as all other PAYE tax payers, and if he will make a statement on the matter.
I take it that the Deputy has in mind the non-availability of the PAYE allowance and the £286 PRSI allowance to farmers and members of their families working on the family farm.
The PAYE allowance is not granted to family members working in the family business or on the family farm, because such persons are not regarded as being in the same position as ordinary PAYE taxpayers, for example as regards obtaining the employment in the first place, security of employment, prospects of advancement etc. There is also an anti-avoidance aspect.
As regards farmers themselves, as the Deputy will be aware the PAYE allowance is not granted to self-employed taxpayers including farmers because of the difference between their tax treatment and that of PAYE taxpayers, who have tax deducted from their income before they receive it and pay tax on the basis of their earnings in the current tax year. By contrast, self-employed taxpayers receive their income gross and are charged to tax on the basis of the accounting period ending in the current tax year; they also enjoy a more liberal expenses regime.
As regards the £286 PRSI income tax allowance, it would not be appropriate to extend this to the self-employed, including farmers, in view of the relatively low — 1.8 per cent — employee element in the rate at which they pay social insurance, by contrast with the 5.5 per cent employee rate to which the £286 allowance relates.
