Thursday, 9 May 2013

Written Answers Nos. 75-82

Tax Collection

Ceisteanna (75)

Pearse Doherty

Ceist:

75. Deputy Pearse Doherty asked the Minister for Finance the number of companies and persons that were audited for non-payment or under-payment of tax in the years 2009, 2010, 2011 and 2012, by year; the total amount that was due in tax following these audits; the amount of the tax that has been collected and by how many persons; the total amount the surcharges and late payment fines amounted to in these years; the amount that was actually charged in surcharges and late payment fines; and the number of persons that paid the amounts. [22009/13]

Freagraí scríofa

Minister for Finance

I am advised by the Revenue Commissioners that the following Tables contain the details of the compliance interventions carried out by them from 2009-2012 inclusive. Compliance interventions include audits, conducted under the Code of Practice for Revenue Audit, as well as assurance checks and risk management interventions. Risk management interventions are used where, based on the risk assessment carried out on a case, it is felt that a full audit is not appropriate. Cases are selected for intervention on the basis of sophisticated risk analysis.

Type of Intervention	Completed 2011	Yield €m	Completed 2010	Yield €m	Completed 2009	Yield €m
Comprehensive (All tax heads)	4,717	183.6	4,209	197.1	4,353	279
Multi Tax/Duty Audits	1,236	61.6	1,374	53.6	1,735	63
Single Tax/Duty Audits	3,345	126.9	3,841	111.6	5,053	163
Single Issue/Transaction Audits	1,768	68.4	1,584	72.4	1,278	97
Total Audit Interventions	11,066	440.5	11,088	434.7	12,419	602

Audit Interventions	Completed 2012	Yield 2012 €m
Comprehensive (All taxheads)	4,687	181.8
Multi Tax/Duty Audits	985	34.7
Single Tax/Duty Audits	2,624	99.7
Single Issue/Transaction Audits	770	42.9
PAYE Compliance Interventions	29,879	23.2
Risk Management Interventions	125,073	87.7
Assurance Checks	373,803	22.4
Total Compliance Interventions (Audit, Risk & Assurance)	537,821	492.4

The Revenue Commissioners have also advised me that as a deterrent to tax and duty evasion considerable sanctions are applied. Details are provided in the following Table of the interest and penalties applied in the audit settlements from 2009 to 2012. These amounts are included in the above table.

Audit Settlements 2009 – 2012 – Breakdown of Interest and Penalties included.

Year	2009 €m	2010 €m	2011 €m	2012 €m
Tax	457.6	324.0	341.1	283.1
Interest	99.6	77.6	66.4	49.8
Penalties	45.3	33.1	33.0	26.2
Total	602.5	434.7	440.5	359.1

In relation to late filing, surcharges are imposed on those who file their income tax, corporation tax and capital gains tax returns late. The surcharge amount is treated as additional tax and is calculated by applying a rate of 5% to the final tax charge for the year, where the return is up to two months late. The surcharge rate increases to 10% where the return is more than two months delayed. There are no late payment fines, but interest can be charged and this is determined on a case by case basis. Data are not maintained in such a way as to enable the numbers of cases or the amounts to be quantified.

Tax Reliefs Cost

Ceisteanna (76)

Pearse Doherty

Ceist:

76. Deputy Pearse Doherty asked the Minister for Finance if he will provide a breakdown by individual category of flat rate expenses; and their total cost to the Exchequer in tax reliefs in the last available tax year. [22010/13]

Freagraí scríofa

Minister for Finance

The position is that tax law provides that employees and office holders may claim a tax deduction in respect of: (a) the cost of travelling expenses necessarily incurred in the performance of the duties of their employment or office; and (b) the cost of other expenses incurred wholly, exclusively and necessarily in the performance of the duties of their employment or office.

As regards an expenses claim under (b) above, I understand from the Revenue Commissioners that, in strictness, each employee or office holder should submit his or her individual expenses claim to Revenue. However, by way of long standing practice stretching back over 40 years, the expenses deductions due for certain categories of employee are, for administrative ease, agreed between Revenue and the relevant representative bodies. These agreed rates of expenses are granted to individuals in their determination of tax credits for PAYE purposes and have become known as “flat rate expenses”. The Revenue Commissioners publish such agreed flat rate expenses on their website at http://www.revenue.ie/en/tax/it/employee-expenses.html

Therefore, some employees obtain their statutory tax deduction in respect of expenses via the administrative “flat rate expenses” regime whilst others obtain their tax deduction on foot of an individual claim submitted to the Revenue Commissioners.

I am informed by the Revenue Commissioners that the cost to the Exchequer of the tax deduction in respect of expenses (other than expenses of travel and subsistence) incurred by employees for the income tax year 2010, the most recent year for which final information is available, is estimated at €66.5 million.

Census of Population Statistics

Ceisteanna (77)

Seán Fleming

Ceist:

77. Deputy Sean Fleming asked the Minister for Finance the information obtained by his Department and the Revenue Commissioners to assist in the identification of households and persons in respect of the local property tax from the Central Statistics Office arising from the Census of Population 2011; and if he will make a statement on the matter. [22024/13]

Freagraí scríofa

Minister for Finance

I am advised by the Revenue Commissioners that they are precluded from using data obtained by the Central Statistics Office (CSO) in the Census of Population 2011 to identify individual residential properties and owners for inclusion in the Register of residential properties in the State, because the confidentiality of all information collected by the CSO from individuals, households or business is guaranteed by law under the Statistics Act 1993. This protection covers any information collected in the Census and the Act gives a legal guarantee that information provided on census forms will be treated as strictly confidential by the CSO. I am also advised, however, that information from the CSO Census 2011 at Small Area level was used by the Commissioners in developing their valuation guidance. “Small areas” are areas of population comprising between 50 and 200 dwellings created by the National Institute of Regional and Spatial Analysis on behalf of the Ordnance Survey Ireland, in consultation with CSO. The information provided by the CSO included property type (percentages of properties of different types for each small area) and age of property (percentages of properties constructed in each of the last 5 decades and pre-1960 for each small area). As the information is at neighbourhood level, it does not identify or include any information on specific properties or owners and consequently access to it is not restricted by the Statistics Act.

I am further advised that Revenue’s valuation guidance, which is based on sales since January 2010 taken from Revenue’s stamp duty records, also uses data from the CSO’s Residential Property Price Index to adjust for price changes in the interim. The Property Price Index provides guidance on establishing the percentage reduction to be applied to the price obtained for properties sold in 2010, 2011 or 2012.

As the Deputy will appreciate from the foregoing, the Revenue Commissioners used CSO data for the purposes of LPT administration where they were legally permitted to do so.

Ministerial Expenditure

Ceisteanna (78)

John McGuinness

Ceist:

78. Deputy John McGuinness asked the Minister for Finance the amount of travel and subsistence both foreign and domestic claimed by each junior Minister and Secretary General in his Department for the period 2007 to date in 2013; the number of staff appointed by each Minister and junior Minister in his Department or constituency office and their relevant cost including travel and subsistence in each case for the period 2007 to date in 2013; and if he will make a statement on the matter. [22036/13]

Freagraí scríofa

Minister for Finance

In response to the Deputy’s question the following table outlines details in respect of the amount paid in travel and subsistence payments made by my Department to the Junior Ministers in the Department for the period 2007 to date in 2013.

Travel and Subsistence payments made to Ministers of State

Period	Name	Domestic T&S	Foreign T&S	Total Amount
01/01/2007- 19/06/2007	Tom Parlon	Nil	Nil	Nil
20/06/2007- 13/05/2008	Noel Ahern	Nil	€ 582	€ 582
13/05/2008 -09/03/2011	Martin Mansergh	€ 25	€ 3,019	€ 3,044
09/03/2011- to date	Brian Hayes	€ 68	€ 1,773	€ 1,839

In relation to the three Secretaries General covered by the period in question a total of €13,531 was paid in relation to travel and subsistence payments. Some €1,696 related to domestic travel & subsistence and €11,835 related to foreign travel.

In relation to the number of staff that has been appointed since March 2011, I have made five appointments consisting of two advisers, one staff member to my constituency office and two civilian drivers.

The total payments to date including salaries and wages inclusive of employer’s PRSI contributions and travel and subsistence payments in respect of these five appointments amounts to €672,795. Some €456,218 of the total relates to the wage costs, travel and subsistence made to the two advisers and staff member in my constituency office with the remaining €216,577 of the total relating to the wage costs and travel and subsistence payments made to my two civilian drivers.

In relation to my predecessors as Minister for Finance the details for the period 1 January 2007 to 9 March 2011 are as follows:

In the period 8 May 2008 to March 2011 Mr Brian Lenihan appointed two special advisers and two members of staff to his constituency office. These appointees received total payments of €1,207,831 in respect of salary and allowances and travel and subsistence in the period in question.

In the period 1 January 2007 to 7 May 2008 Mr Brian Cowen’s two advisers and two constituency office appointees received total payments in respect of salary and allowances and travel and subsistence amounting to €320,079

The Deputy will be aware that previous Ministers availed of State cars with Garda drivers the estimated average annual cost of which was €280,000.

Duty Free Sales

Ceisteanna (79)

Kevin Humphreys

Ceist:

79. Deputy Kevin Humphreys asked the Minister for Finance if VAT applies to products os sale in duty free areas in Irish airports; the taxation and regulations that apply in these areas; and if he will make a statement on the matter. [22059/13]

Freagraí scríofa

Minister for Finance

I am advised by the Revenue Commissioners that all goods sold and supplied in duty free areas in Airports to passengers travelling to destinations outside the EU are zero rated for VAT purposes in accordance with paragraph 3 of Schedule 2 of the Value-Added Tax Consolidation Act 2010 and are exempt from excise duty in accordance with section 77 of the Finance Act 2005. There are restrictions, such as 200 cigarettes and 1 litre of spirits, on the quantity of excisable goods that can be supplied duty free to such passengers. All goods supplied to other travellers, including travellers to other EU countries, are liable to excise duty and Irish VAT at the appropriate rates. Shops in airports, handling intra- and extra-EU flights need to distinguish, in sales and accounting, between sales to passengers travelling to destinations outside the EU (duty free) and sales to passengers travelling to other EU member states (duty paid). The determination of whether a sale is duty free or not is made at the point of payment, that is, at the till, where the passenger’s boarding pass or ticket will provide the necessary evidence.

Mortgage Resolution Processes

Ceisteanna (80)

Nicky McFadden

Ceist:

80. Deputy Nicky McFadden asked the Minister for Finance the measures being taken to support variable rate mortgage holders in relation to engagement with banks; and if he will make a statement on the matter. [22098/13]

Freagraí scríofa

Minister for Finance

The Central Bank of Ireland (CBI) has responsibility for the regulation and supervision of financial institutions in terms of consumer protection and prudential requirements and for ensuring ongoing compliance with applicable statutory obligations. However, the Central Bank has no statutory role in the setting of interest rates by regulated entities, apart from the interest rate cap imposed on the credit union sector in accordance with the provisions of the Credit Union Act, 1997. I am informed by the Central Bank that each institution determines the rate it charges its customers, depending on a number of factors such as cost of funds and commercial considerations, such as competition, risk pricing and the impact on deposit rates.

However within its existing powers and through the use of suasion, the Central Bank continues to engage with specific lenders which appear to have standard variable rates set disproportionately to their cost of funds. Also, the Central Bank wrote to all mortgage lenders in October 2011 and asked them to consider the impact on arrears when considering any future interest rate increases.

The CBI has informed me that given the increased financial pressures currently being experienced by mortgage consumers, the CBI was of the view that they needed sufficient time to plan for any increases in their standard variable interest rate. As such, in February 2011, the Central Bank advised mortgage lenders that it expected them to notify these consumers, in writing, at least one month in advance of any increases in their standard variable rate. This notification must include a) the date from which the new rate will apply; b) the details of the old and new rate; c) the revised repayment amount; and d) an invitation for the consumer to contact the lender if he/she anticipates difficulties meeting the higher repayments.

Mortgage Resolution Processes

Ceisteanna (81)

Michael McGrath

Ceist:

81. Deputy Michael McGrath asked the Minister for Finance if the Central Bank of Ireland has provided the banks with a list of agreed mortgage arrears forbearance solutions or if it is up to the banks to identify their own solutions; and if he will make a statement on the matter. [22107/13]

Freagraí scríofa

Minister for Finance

The Deputy will be familiar with the Central Bank’s announcement of the new measures being introduced to address mortgage arrears, which includes the publication of performance targets for proposing and concluding sustainable solutions for borrowers in arrears over 90 days for the main mortgage banks. The Central Bank has advised that while it is not mandating any particular model of restructuring and while sustainable solutions will be arrived at on a case-by-case basis, there are some fundamental principles that must be respected as follows:

- the affordability assessment of the borrower needs to be based on both their current and prospective future servicing capacity for all borrowings; assumed prospective future increases in the debt servicing ability of the borrower must be credible and conservative.

- Lenders need to apply a realistic valuation of the borrower’s assets, in particular their property. This also applies to any assumption of potential asset price appreciation, as well as the estimated costs related to a potential foreclosure of property; and

- Lenders need to use an appropriate interest rate when discounting future income flows, which should take account of the lender’s cost of funds.

The Central Bank will assess compliance with these principles in its supervisory audit of compliance with the targets, including through analysis of a sample of modifications.

Student Grant Scheme Delays

Ceisteanna (82)

Robert Troy

Ceist:

82. Deputy Robert Troy asked the Minister for Education and Skills if he will explain the position that many students at Athlone Institute of Technology are now facing due to ongoing problems with the Student Universal Support Ireland [21896/13]

Freagraí scríofa

Minister for Education and Skills

I have been informed by Student Universal Support Ireland (SUSI) that Athlone Institute of Technology have withdrawn the notice to students with outstanding fees in relation to sitting their end of year exams. As the Deputy will be aware SUSI are unable to finalise an application until all the necessary information has been provided by the applicant as required under the Student Grant Schemes 2012. Since December 2012, SUSI has engaged in a number of proactive campaigns by telephone, email and post encouraging applicants to provide the information necessary to finalise their applications. Students who have outstanding issues are currently being contacted by SUSI as part of their close out strategy in relation to grant applications for the 2012/2013 academic year.