Tony Gregory
Ceist:89 Mr. Gregory asked the Minister for Finance the number of builders against whom action is being taken arising from the misuse of C45 forms; and if he will make a statement on the matter.
Written Answers. - Misuse of C45 Forms.
I am assuming that the Deputy has in mind the concerns expressed by trade unions representing construction workers that contractors were placing employees on the C45 system in situations where the employer-employee rules should apply. As part of their procedure in auditing taxpayer's returns the Revenue Commissioners would have regard to the necessity for contractors in the building trade to apply the C45 system only where a sub-contracting situation exists. While statistics are not kept of specific issues arising on audits, the view of the inspector of taxes is that the use of the C45 system where PAYE-PRSI status should be granted has not been an issue in a significant number of cases.
The current debate appears to suggest that there has been a sudden swing from direct employment to the C45 system. The Revenue Commissioners have a project under way to check the extent and reality of any movement from employment to sub-contracting. The issue will also be considered by the Black Economy Monitoring Group who have been given the task of carrying out a thorough review of the operation of the C45 system and to make recommendations on action to curb any abuse and to improve the system generally.
Any necessary action will be taken where incorrect use of the C45 system is identified. Ultimately this would mean the entry of estimates on employers attempting to apply the C45 system to employment situations where the employers cannot be persuaded to operate PAYE-PRSI voluntarily. However, the Revenue Commissioners cannot unilaterally insist on the imposition of the employment status if the legal reality is that a sub-contracting situation exists. This matter will be considered in the context of the reviews taking place on the issue.