Dáil Éireann Debate, Thursday - 22 November 2018
8. Deputy Richard Boyd Barrett asked the Minister for Finance the measures he is taking or considering taking to prevent possible abuses of the tax relief such as artificial inflation of costs or failure to adhere to the requirement in the legislation for the provision of quality employment and training in relation to section 481 tax relief in the film industry; and if he will make a statement on the matter. [48532/18]
Amharc ar fhreagra37. Deputy Richard Boyd Barrett asked the Minister for Finance the way in which he defines quality employment and training in relation to section 481 tax relief for the film industry, access to which is conditional in the legislation and on the provision of quality employment and training; his views on whether such a definition should at a minimum require adherence to all relevant employment legislation (details supplied); his further views on whether a company proven to be in breach of this legislation should have this tax relief withheld; and if he will make a statement on the matter. [48475/18]
Amharc ar fhreagraWe had an extensive discussion on section 481 tax relief for the film industry when we were considering the Finance Bill. I am very keen to press the issue. The monitoring of the quality employment and training condition that applies to those who get this funding must be improved if we are to ensure quality employment in this sector is actually manifest.
I propose to take Questions Nos. 8 and 37 together.
As the Deputy has said, we have dealt with this matter at length in the context of the Finance Bill. I would like to reiterate briefly the key points I have shared with the Deputy. A significant change I am making this year relates to the potential for inflated claims. I am legislating to change the way companies claim the tax credit to provide that they will have to apply for payment of the tax credit under the self-assessment system. This will bring the operation of the credit within the normal penalty and prosecution provisions for incorrect claims. I am introducing a further amendment to the film tax credit as an important first step in addressing concerns that have been raised with regard to training. The splitting of the certification process between Revenue and the Department of Culture, Heritage and the Gaeltacht, and the requirement for the production company to apply to that Department before the commencement of the main production, will allow for earlier engagement on the training requirements associated with the credit. I am advised by Revenue that it carries out a comprehensive programme of outdoor compliance operations each year. Many of these operations are carried out on a multi-agency basis and can include officials from the Department of Employment Affairs and Social Protection and the Workplace Relations Commission. The primary role of the joint investigation units is to detect non-compliance, including non-operation of the PAYE system on foot of bogus self-employment.
I am glad to hear what the Minister has said. It would be a major step forward. I would like to get as much detail and information as possible on this. The allegation being made by some workers can be summed up by comments made by the SIPTU equity representative when he was asked about blacklisting in the film industry. He said:
People are terrified of rocking the boat in any way, shape or form when they are in a precarious situation in work. One of the questions on the survey asked whether respondents had ever experienced or observed any form of bullying or harassment. Something in the region of 65% to 70% of people said yes. The next questions asked if they reported it. Of that 70% of respondents who had said yes, roughly 70% said that they did not report it for fear of not getting the next job.
He went on to attribute this low level of reporting to the "precarious" nature of the industry. If such a level of concern about blacklisting and being seen to rock the boat exists, that does not sound like quality employment to me. It is critical for us to design our approach to attracting the investment that is necessary in this sector in a way that ensures people who are employed in it are not vulnerable to the sort of thing that has been described.
We debated this matter in the context of the Finance Bill as recently as last night. The Deputy has acknowledged my intention to put in place legislative changes to try to make progress on this matter, which is of growing concern for many people within the industry. When the Finance Bill is being implemented across the passage of next year, I will be happy to engage with the Deputy on how the criteria are being applied. I imagine it will take a period of time for a sufficient quantity of applications to come through the system to enable us to see if the new approach is making a difference. It is realistic to hope that by the end of the first half of next year, we will have a sense of what kind of insights this process is yielding and what difference it is making to the kinds of concerns that are being articulated by many people.
There are many things that could be done, but I would like to focus on one of them in the short amount of time available to me. It would help if we had a clear register of the employees in the film industry. If the various stakeholders had to provide a list of the people in the industry, it would help us to ascertain the level of direct PAYE employment, as opposed to contractor employment, to determine whether there is evidence of bogus self-employment, to establish whether the trainee system is being abused, and to assess whether too many trainees are being taken on to avoid employing and paying qualified people. A register would help us to get the sort the information needed for a proper appraisal of the extent of quality employment and possible abuses in this area. I suggest we also need to examine the extent to which the certification process is looking under the surface of the different applications for the review under the different headings.
On the second point, the certification process is new and will take effect and will be implemented once the Finance Bill is passed. It may be a matter on which we can engage in the first half of next year once we see how it is implemented and whether it is making a difference to the issues which are being raised.
Last night, the Deputy asked what was my view of the breach of employment law and the availing of tax credits. I answered his question directly.
The Minister did.
I stated that I was aware that incidents take place in workplaces that should not take place but that these developments can sometimes occur if a workplace is big enough. Nevertheless, my view is that if issues of this nature are sustained, frequent and specific to a project that is availing of a credit, it raises issues with me as to how that credit is being used. I hope the changes we are making for next year will provide some clarity on this issue. Where I differ with the Deputy is on his first point. I do not know that other parts of our economy have the kind of register of employment to which he referred. It would be a big ask to register everybody working in a particular sector.
