Written Answers Nos. 187-211
187. Deputy Brendan Griffin asked the Minister for Finance if he is scrutinising the hospitality and corporate entertainment and other related expenditure by State owned banks; if he will provide the most up to date details of such expenditure; if he will meet with the heads of these banks to receive a full explanation on the reason such budgets still exist; and if he will make a statement on the matter. [9000/14]
Amharc ar fhreagraAs the Deputy will be aware under the Relationship Framework the State does not intervene in the day to day operations of the banks or their management decisions regarding commercial matters.
AIB and PTSB have provided me with the following information in relation to hospitality and corporate entertainment:
AIB is undertaking a significant cost reduction programme aimed at reducing overall costs by €350m in 2014 relative to 2012 levels. As a commercial organisation AIB must manage its costs reflective of its commercial activities whilst seeking to return the bank to profitability during 2014. Detail in respect of AIB s operational costs are contained in AIB s published accounts which are available on AIB's website at www.aibgroup.com/investorrelations. AIB has a Code of Conduct in place for all staff which covers, inter alia, corporate hospitality.
PTSB We have no budget for hospitality, corporate entertainment/other related expense. There may be relatively small expenses incurred at an individual level but beyond that we don't get involved in hospitality or corporate entertainment on any organised or grand scale.
188. Deputy Pearse Doherty asked the Minister for Finance if he will confirm that the National Asset Management Agency’s primary objective is to maximise returns from the assets it has acquired. [9017/14]
Amharc ar fhreagra189. Deputy Pearse Doherty asked the Minister for Finance if the reported disposal of the National Asset Management Agency’s entire portfolio of assets linked to the borrowers in the North of Ireland is motivated by political or economic considerations. [9018/14]
Amharc ar fhreagraI propose to take Questions Nos. 188 and 189 together.
I am advised that NAMA s commercial decisions are guided entirely by Section 10 of the NAMA Act which places a statutory obligation on NAMA to obtain the best achievable return for the State from the management of its acquired loan portfolio. NAMA has an independent mandate and decisions in relation to the management and disposal of property assets and loan portfolios are therefore a matter only for the NAMA Board.
190. Deputy Pearse Doherty asked the Minister for Finance his assessment of the impact of the National Asset Management Agency on the economy of the North of Ireland and if that impact has, to date, been positive. [9019/14]
Amharc ar fhreagra191. Deputy Pearse Doherty asked the Minister for Finance if he will provide an assessment of the differences in approach between the National Asset Management Agency and a potential commercial buyer of its Northern assets, in the context of the impact of differing approaches on Northern Ireland's economy. [9020/14]
Amharc ar fhreagra192. Deputy Pearse Doherty asked the Minister for Finance if he will provide an estimate of the number of jobs that are presently supported by the National Asset Management Agency in Northern Ireland. [9021/14]
Amharc ar fhreagraI propose to take Questions Nos. 190 to 192, inclusive, together.
It is important first of all to put NAMA in its proper context as far as the Northern Ireland property market and, by extension, the wider Northern Ireland economy is concerned. NAMA is by no means the dominant influence in the Northern Ireland property market and indeed in some sectors its exposure is very low. In the residential sector, for example, NAMA debtors and receivers control only 900 residential properties in Northern Ireland out of a total housing stock of 750,000. Whilst NAMA's exposure to the land and development sector is more substantial, it is by no means the dominant influence in this sector either.
Within this context, NAMA's approach in Northern Ireland, as in the Republic, has been to pursue a policy of engaging constructively with debtors and agreeing schedules which involve the phased and orderly disposal of assets in order to support market stability.
NAMA has also shown itself more than willing to make advances to debtors in Northern Ireland to enable the completion of commercially viable construction projects and has offered vendor finance to prospective purchasers of commercial property in the Northern Ireland property market. In this way, NAMA is providing important funding into the Northern Ireland economy.
NAMA is obliged to carry out its functions in the context of the overriding commercial objective provided for by Section 10 of the Act and to recover the greatest amount possible for the taxpayer from the sale of loans and properties securing its loans in all jurisdictions, including Northern Ireland. As with the sale of any NAMA asset what a purchaser does with the asset following the sale is a commercial matter for them.
NAMA is directly supporting 2,000 jobs in Northern Ireland currently and further indirect employment through the participating institutions, service providers and across the professional services sector.
NAMA is making a positive impact in Northern Ireland through these and other initiatives, such as in the area of social housing.
193. Deputy Pearse Doherty asked the Minister for Finance if he will confirm the revenue generated by the National Asset Management Agency from its disposal of assets in Northern Ireland; and if he will provide his assessment if these disposals are in line with NAMA’s commitment not to hoard or fire sale assets. [9022/14]
Amharc ar fhreagraI am advised by NAMA that, since its inception, it has overseen the sale of assets in Northern Ireland by debtors and receivers with a value of €141m. NAMA advises that its strategy in Northern Ireland, as in other jurisdictions, is to seek to ensure that the volume of assets offered for sale is well aligned with the market's absorption capacity and, in that context, that it does not engage in either fire sales or hoarding of assets in Northern Ireland.
195. Deputy Seán Ó Fearghaíl asked the Minister for Finance if he will arrange for a tax certificate to be issued in respect of a person (details supplied) in County Kildare; and if he will make a statement on the matter. [9075/14]
Amharc ar fhreagraI have been advised by the Revenue Commissioners that an amended tax credit certificate for 2014 has been issued to the person concerned on 20 February 2014. This certificate is based on the information currently available to Revenue. If the details in the certificate are not accurate the person concerned may contact Revenue at LoCall 1890 44 44 25 to have his record updated.
196. Deputy Clare Daly asked the Minister for Finance the reason the National Asset Management Agency can allow a developer a credit line to pursue legal action against home owners trying to protect their homes from faulty and inadequate fire safety mechanisms in their property and yet the same developer has written to other residents in a different estate pleading inability to pay to complete fire safety works in their estate. [9100/14]
Amharc ar fhreagraAs the Deputy may be aware, NAMA's statutory remit extends only to those properties and other assets which secure its acquired loans, properties outside this remit are a matter for the debtor. I would like to remind the Deputy that questions on individual properties can be sent directly to NAMA who can be contacted on oir@nama.ie, or at 01 665 0000.
197. Deputy Michael Healy-Rae asked the Minister for Finance if he will postpone and review the carbon tax at a time when one in five households is in fuel poverty; and if he will make a statement on the matter. [9119/14]
Amharc ar fhreagra212. Deputy Derek Nolan asked the Minister for Finance the reason for a further increase in the carbon tax, due on 1 May; his views that the doubling of the tax in just over a year is excessive; the impact of this price rise on thousands of persons around the country; and if he will make a statement on the matter. [9422/14]
Amharc ar fhreagraI propose to take Questions Nos. 197 and 212 together.
The application of the carbon tax to solid fuels remained subject to a Ministerial commencement order since 2010. This approach was primarily adopted to delay the application of the carbon tax to solid fuel in the residential sector to allow for the development of a robust mechanism to counter the large scale sourcing of coal from Northern Ireland where lower sulphur standards apply. Such a mechanism is in place since June 2011.
The application of the carbon tax to solid fuels was further postponed in 2012 given the overall tax increases in Budget 2012 including in the standard rate of VAT. The introduction of Carbon Tax was about sending a price signal that there is a cost associated with the consumption of fossil fuels to the detriment of the environment. It should also be noted that solid fuels have the highest carbon content of all fossil fuels. As a result they are considered the dirtiest fuels and given the environmental impact it is important that they are taxed.
As I was aware of the potential impact on lower income households, I chose not to introduce the carbon tax on solid fuels until after the 2012/2103 winter period and I opted to introduce the tax in two phases i.e. €10 per tonne of CO2 from 1 May 2013 and a further €10 per tonne of CO2 from 1 May 2014 thus bringing the carbon tax on solid fuels in line with that on all other fossil fuels i.e. at €20 per tonne of CO2. While tax increases are unpopular, where Member States are under fiscal pressure, it makes sense to increase taxes in areas where some benefits can arise, in this instance a carbon tax promotes energy efficiency, reduces emissions and reduces our dependence on imported fossil fuels. Accordingly I do not intend to defer the further increase of €10 per tonne of CO2 emissions from 1 May 2014.
198. Deputy Terence Flanagan asked the Minister for Finance the position regarding ex-Irish Nationwide Building Society residential mortgage holders (details supplied); and if he will make a statement on the matter. [9126/14]
Amharc ar fhreagraIn the event that NAMA ultimately acquires this portfolio, the NAMA Board will be mindful of its legal obligations and of general market norms. I am advised that NAMA is likely to apply best practice in this regard and will seek to ensure that a borrower's legal position does not deteriorate by virtue of NAMA acquisition of the loan or loans concerned.
199. Deputy Pearse Doherty asked the Minister for Finance if his attention has been drawn to the practice of a bank refusing to consider loan applications from anybody benefiting from the family income supplement; his views on whether this practice is arbitrary and discriminatory; and his further views on whether it is in line with best practice and regulations set down by the Central Bank of Ireland. [9177/14]
Amharc ar fhreagraFrom a consumer protection perspective, Chapter 5 of the Consumer Protection Code 2012 imposes knowing the customer and suitability requirements on regulated entities, including banks. This chapter includes the specific requirement that prior to offering, recommending, arranging or providing a credit product to a personal consumer, a lender must carry out an assessment of affordability to ascertain the personal consumer s likely ability to repay the debt, over the duration of the agreement.
It is not in the interest of the consumer or the bank that credit be granted which the consumer cannot afford to repay.
On the issue more generally, if a customer has made a formal complaint to the financial service provider in question about the refusal to provide a service and is not satisfied with the outcome, then the matter should be referred to the Financial Services Ombudsman.
The Financial Services Ombudsman investigates, in an impartial and independent manner, complaints from individual customers and small businesses who have unresolved disputes with financial service providers which are either regulated by the Central Bank or, are subject to the terms of the Consumer Credit Act 1995. All personal customers, unincorporated bodies, charities, clubs, partnerships, trusts, and limited companies with a turnover of €3,000,000 or less can complain to the Ombudsman.
Investigations by the Financial Services Ombudsman are free of charge to the customer.
201. Deputy Brian Walsh asked the Minister for Finance the number of persons who availed of tax relief on gluten-free foods in the years 2011, 2012 and 2013; the total amount of this tax relief in each of those years; and if he will make a statement on the matter. [9291/14]
Amharc ar fhreagraI am informed by the Revenue Commissioners that the cost of gluten-free foods manufactured specifically for coeliacs is an allowable medical expense and tax relief may be claimed in the same manner as other health expenses.
Due to the format in which details of health expense claims are submitted by taxpayers, as claims for relief on gluten-free foods are in aggregated with claims in respect of other medical expenses, to estimate the cost of this relief would require an extensive investigation of the Revenue Commissioners' records to identify the relevant details in relation to this issue.
202. Deputy Róisín Shortall asked the Minister for Finance if he will arrange for the Revenue Commissioners to contact a person (details supplied) in Dublin 9, to arrange payment of their local property tax through a payment service provider or single debit authority. [9315/14]
Amharc ar fhreagraI am advised by Revenue that information on all aspects of Local Property Tax (LPT), including details of the various payment options is available on its website at www.revenue.ie.
Revenue also confirmed to me that it continues to provide a dedicated LPT Helpline at 1890 200 255 to assist people in meeting their filing and payment obligations and to provide any other information or assistance that might be required.
In regard to the specific case referred to by the Deputy, I am advised that the person in question has already selected his preferred payment option for 2014. Notwithstanding this, a member of the LPT team made direct contact with him and discussed the range of alternative options available to him if he wished to change from his stated choice. Having considered the other payment options the person confirmed that he is now satisfied to remain with his original selection.
203. Deputy Jerry Buttimer asked the Minister for Finance when small and medium-sized Irish businesses will be able to access credit from the German State-owned bank, KfW, Bank für Wohnungswirtschaft AG; and if he will make a statement on the matter. [9378/14]
Amharc ar fhreagraI assume the Deputy is referring the announcement made by the Taoiseach in this House in November that he had held discussions with Chancellor Merkel on finding ways to reinforce Ireland's economic recovery by improving funding mechanisms for the real economy, including access to finance for Irish SMEs. The German Government has asked KfW, the German development bank, to work with the German and Irish authorities swiftly, in order to deliver on this initiative at the earliest possible date.
Officials at my Department with assistance from staff of the NPRF have worked quickly to investigate ways to ensure that the benefit of this cooperation to Irish SMEs can be maximised.
A small party of my officials travelled to a meeting with their counterparts in Berlin in early December and a week later a similar meeting was held at KfW's headquarters in Frankfurt. Officials from KfW and the German Ministry have also met with the project team from Ireland in Dublin for a further exchange shortly before Christmas. Both sides have been represented at senior management level for each engagement. In addition, there have been regular conference calls between the parties since then.
As the Deputy may be aware, KfW channel their funding for SMEs in Germany through a system of on-lending using commercial banks in Germany as the distribution mechanism. Typically the SMEs can avail of KfW funding at different terms and conditions applicable to that offered directly by the financial institutions. This model is similar to the on lending arrangements available to Irish domestic institutions using funds from the European Investment Bank.
The precise arrangements for the structure, level of funding and distribution options are the subject of the discussions between the relevant officials at present and will have to adhere to EU State Aid considerations. Experience in other countries suggests that any lending facilitated by a state sponsored investment institution like KfW is generally complementary to SME lending already taking place in an economy and can in fact assist in improving both the supply and demand for finance. In essence we will be supplying the banks with an improved source of finance with specified lending products that will attract SME customers and we'd expect that banks will have no issue matching the demand with the credit supplied by the Strategic Investment Bank.
The Government recognises that SMEs are the lifeblood of the Irish economy and play a crucial role in employment growth in our country. Since March 2011 Government policy has concentrated on ensuring that viable micro, small and medium sized enterprises have access to capital, equity and debt funding from a more diverse range of sources. The potential new arrangement with KfW, which my officials are currently exploring, represents a continuation of this Government's concerted focus on ensuring that viable SMEs have access to finance in a manner that supports economic recovery and employment growth.
204. Deputy Michael McGrath asked the Minister for Finance the estimated cost to the Exchequer in a full year of extending a tax credit of an amount equal to the PAYE tax credit to self-employed persons; and if he will make a statement on the matter. [9383/14]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the cost to the Exchequer of extending the PAYE credit to the self employed and proprietary directors is estimated at €450 million in a full year.
These figures are estimates from the Revenue tax forecasting model using the latest actual data for the year 2011, adjusted as necessary for income and employment trends in the interim. They are, therefore, provisional and likely to be revised. A married couple who has elected or has been deemed to have elected for joint assessment is counted as one tax unit.
205. Deputy Thomas P. Broughan asked the Minister for Finance if there has been an increase in the number of appeals lodged with the Credit Review Office since the threshold for appeals to be considered by the Office was recently increased. [9387/14]
Amharc ar fhreagraAs the Deputy is aware, in Budget 2014 I announced an increase in the limit for loan applications that can be reviewed by the Credit Review Office (CRO) from €500,000 to €3m. This increase will facilitate requests from a broader range of SMEs, as well as assisting those borrowers currently banked with non-trading banks and banks which are strategically exiting the Irish SME lending market, whose re-financing requests are larger than €500,000.
I am informed by the CRO that there has not yet been a significant increase in the number of appeals since the upper limit increased to €3m in October 2013. This may be due to seasonally - the level of applications in November and December tends to be lower than the rest of the year. However, I understand that there have been a number of appeals to the CRO in excess of €500,000 since I raised the limit.
The CRO is currently overturning 55% of the refusal decisions referred to them and I would encourage SMEs that have been refused credit by the banks to avail of the services of the Office.
206. Deputy Thomas P. Broughan asked the Minister for Finance the number of persons availing of the rent tax credit in the years 2011, 2012 and 2013. [9388/14]
Amharc ar fhreagraI am informed by the Revenue Commissioners that 2011 is the most recent year for which final information is available on the numbers of taxpayers availing of the rent tax credit mentioned by the Deputy. It is expected that 2012 information will be available later this year. There are 179,600 availing of the credit for the income tax year 2011.A married couple who has elected or has been deemed to have elected for joint assessment is counted as one tax unit.
207. Deputy Thomas P. Broughan asked the Minister for Finance the number of persons who have registered for the home renovation incentive scheme since its establishment. [9389/14]
Amharc ar fhreagraAs the Deputy will be aware, I announced the Home Renovation Incentive in the recent Budget. This scheme came into operation on 25 October 2013 and will run until 31 December 2015. It provides for tax relief for homeowners by way of a tax credit at 13.5% of qualifying expenditure incurred on repair, renovation or improvement work carried out on a principal private residence.
Qualifying expenditure is expenditure subject to the 13.5% VAT rate. The work must cost a minimum of €5,000 (inclusive of VAT). Where the cost of the work exceeds €30,000 (exclusive of VAT) a maximum credit of €4,050 will apply. The credit is payable over the two years following the year in which the work is carried out.
The scheme will be administered through Revenue's online systems. Contractors will be required to inform Revenue in advance of details of works to be carried out and will also be required to notify Revenue in relation to any payments received in respect of the works. Homeowners will be able to view the information provided to Revenue by the contractor through the Revenue electronic systems and will also claim the relief through those systems. It is anticipated that this system will 'go live' in early April 2014. Contractors will need to enter the details of works carried out within 28 of the electronic system becoming available. Until the system is live and details of works carried out are entered, there are no figures available on the incentive.
Full details of the scheme are available on the Revenue website at http://www.revenue.ie/en/tax/it/reliefs/hri/index.html along with a newly produced Guide for Homeowners . Copies of the Guide are being distributed to all local Revenue Offices and Citizens Advice centres.
208. Deputy Thomas P. Broughan asked the Minister for Finance the number of persons who have registered for the start your own business scheme since its establishment. [9390/14]
Amharc ar fhreagraAs the Deputy is aware, I announced the Start Your Own Business initiative, which provides an exemption from Income Tax for individuals who have been unemployed for a period of 12 months and who start a new, un-incorporated business between 25 October 2013 and 31 December 2016.
An exemption from Income Tax will be provided on profits up to a maximum of €40,000 per annum for the first two years of trading. However, USC and PRSI will continue to be payable. If a loss is incurred then loss relief will be available in the normal manner.
The business must be un-incorporated i.e., it must not be registered as a company. In order to claim this relief, the individual must file a tax return notwithstanding that there may be no liability to tax. This initiative is an employment activation measure that provides a much-needed incentive for people to start their own business and to reduce their dependence on welfare payments. There is no requirement for an individual to register in order to claim the relief. Instead, the individual will claim the relief by completing the relevant boxes in his or her annual income tax return. Therefore, until the individuals who avail of this relief file their tax returns for the 2014 tax year next year, it will not be possible to know how many individuals are availing of this relief. Full details of the initiative can be found on the Revenue website at: http://www.revenue.ie/en/tax/it/reliefs/own-business-scheme/index.html.
209. Deputy Michael McGrath asked the Minister for Finance if there is any legal requirement for lenders who are regulated entities to ensure that at the point a residential mortgage is drawn down and also during the life of the mortgage, the borrower must have either a life assurance policy or a mortgage protection policy in place to cover the balance of the mortgage at a minimum; and if he will make a statement on the matter. [9393/14]
Amharc ar fhreagraSection 126 of the Consumer Credit Act 1995 requires that, subject to certain exemptions set out in the Act, "a mortgage lender shall arrange a life assurance policy providing, in the event of the death of a borrower before a housing loan made by the mortgage lender has been repaid, for payment of a sum equal to the amount of the principal estimated by the mortgage lender to be outstanding in the year in which the death occurs on the basis that payments have been made by the borrower in accordance with the mortgage".
One of the exemptions is where the borrower has otherwise arranged cover. In the case of mortgages in arrears, under Provision 42 of the Code of Conduct on Mortgage Arrears, where an alternative repayment arrangement is offered by a lender, the lender must provide the borrower with a written explanation of how the alternative repayment arrangement works including a statement that the alternative repayment arrangement may impact on the borrower's mortgage protection cover.
In addition, the terms and conditions of the relevant mortgage contract(s) may set out any obligations of a borrower in this regard.
210. Deputy Patrick O'Donovan asked the Minister for Finance if he will provide details of the VAT rate that is charged in the hosting and registration of domain names; and if he will make a statement on the matter. [9413/14]
Amharc ar fhreagra211. Deputy Patrick O'Donovan asked the Minister for Finance if he will provide details of the VAT rate charged in the other EU member states on the registration and hosting of domain names; and if he will make a statement on the matter. [9414/14]
Amharc ar fhreagraI propose to take Questions Nos. 210 and 211 together.
I am advised by the Revenue Commissioners that the hosting and registration of domain names is considered to be an electronically supplied service for VAT purposes. Such electronically supplied services, which include website supply and web-hosting, are liable to VAT at the standard rate, currently 23% in Ireland.
The VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. The EU VAT Directive (Council Directive 2006/112/EC) generally provides that supplies of goods and services be chargeable to VAT at the standard rate but that lower rates are permitted in very limited circumstances. A lower rate lower than the standard rate is specifically not permitted for electronically supplied services, such as hosting and registration of domain names, and the standard rate of VAT should therefore apply in other EU Member States.
The standard rate of VAT varies between Member States and a list of these rates is available on the EU Commission website: http://ec.europa.eu/taxation_customs/resources/documents/taxation/vat/how_vat_works/rates/vat_rates_en.pdf.
