Written Answers Nos. 76-100
76. Deputy Louise O'Reilly asked the Minister for Finance the number of persons taking up the bike to work scheme in each of the past five years; the cost of the scheme; and if he will make a statement on the matter. [10942/20]
Amharc ar fhreagra77. Deputy Louise O'Reilly asked the Minister for Finance if consideration has been given to extending the bike to work scheme beyond PAYE workers; and if he will make a statement on the matter. [10943/20]
Amharc ar fhreagra136. Deputy Holly Cairns asked the Minister for Finance his views on adjusting the cycle to work scheme to cover the purchasing of child seats or trailers; and if he will make a statement on the matter. [11548/20]
Amharc ar fhreagra137. Deputy Holly Cairns asked the Minister for Finance the reason a person can only avail of the cycle to work scheme once every five years even if the person's bike is stolen and-or damaged. [11549/20]
Amharc ar fhreagra138. Deputy Holly Cairns asked the Minister for Finance his views on changing the cycle to work scheme from a benefit-in-kind model to a model similar to the electric vehicle grants scheme which would enable more persons to purchase a sustainable and healthy form of transport regardless of employment status. [11550/20]
Amharc ar fhreagraI propose to take Questions Nos. 76, 77, 136, 137 and 138 together.
Section 118(5G) of the Taxes Consolidation Act 1997 provides for the cycle to work scheme. This scheme provides an exemption from benefit-in-kind where an employer purchases a bicycle and associated safety equipment up to a maximum of €1,000 for an employee to use, in whole or in part, to travel to work. Safety equipment includes helmets, lights, bells, mirrors and locks but does not include child seats or trailers.
I refer the Deputy to my previous responses to Parliamentary Questions on this issue, most recently questions 9973/20 on 9 June, 8693/20 on 3 June, and 7016/20 on 20 May.
The cycle to work scheme operates on a self-administration basis, and relief is automatically available provided the employer is satisfied that the conditions of their particular scheme meet the requirements of the legislation. There is no notification procedure for employers involved. This approach was taken with the deliberate intention of keeping the scheme simple and reducing administration on the part of employers.
Accordingly, there are no records centrally available on the number of people availing of the scheme. The Deputy may wish to note that a series of questions to individual Departments on 9 June sought the number of persons in each Department who availed of the scheme.
The legislation only allows for one purchase of a bicycle in respect of an employee in a five-year period irrespective of whether the bicycle was used for the full period or not. Any deviation from the current self-administration system would involve additional administrative procedures for either or both Revenue and employers in relation to the verification of loss, theft, insurance recovery, etc. As this runs counter to the administrative simplicity of the existing provisions, it would not be appropriate to alter the existing scheme.
Anyone obtaining a bicycle under the scheme would therefore be advised to ensure it is covered by insurance.
The inclusion of child seats and trailers in the scheme or the extension of the scheme beyond employees would create an additional cost and that cost must be recovered elsewhere. For that reason, while the scheme is kept under review by officials, I have no plans at present for its expansion.
Finally, as Minster for Finance I do not offer any grant schemes for personal transportation. The Sustainable Energy Authority of Ireland is responsible for electrical vehicle grants and comes under the aegis of my colleague the Minister for Communications, Climate Action and Environment.
78. Deputy Paul Kehoe asked the Minister for Finance the status of processing the payment of nursing home charges for a person (details supplied); and if he will make a statement on the matter. [10965/20]
Amharc ar fhreagraI am advised by Revenue that the cheque in question dated 9 April 2020 has now been processed. The cheque was sent to one of Revenue’s smaller offices and the delay in processing it was due to the limited access to that office as a result of travel restrictions imposed during the ongoing COVID-19 pandemic. Revenue has confirmed that it will waive any interest that may arise for the period during which there was a delay in processing this cheque payment.
Revenue would like to take the opportunity to advise that it provides electronic options for all tax payments and repayments, including in respect of Nursing Home Scheme loan repayments, through the ‘Revenue Online Service’ (ROS) and the ‘myAccount service’. These channels provide a very quick and efficient 24/7 service that is fully secure and more cost effective than conventional manual payment options. These electronic options have the added benefit of providing taxpayers with full access to their historic payment and filing records.
79. Deputy Frankie Feighan asked the Minister for Finance if he will consider matters raised in correspondence (details supplied) and a request to extend the section 481 regional film development uplift to 2021; and if he will make a statement on the matter. [11007/20]
Amharc ar fhreagraSection 481 TCA 1997 provides a 32% payable credit for eligible expenditure on film production in Ireland. It is available to Irish and international film production companies that are resident in the State or in an EEA State and carry on business in the State through a branch or subsidiary. The scheme is intended to act as a stimulus to the creation of an indigenous film industry in the State, creating quality employment opportunities and supporting the expression of the Irish culture.
Finance Act 2018 introduced a short-term, tapered regional uplift. The regional uplift will be phased out on a tiered basis with 5% available in years 1 (2019) and 2 (2020), 3% in year 3 (2021), 2% in year 4 (2022), and reducing to 0% from year 5 on.
The purpose of the regional uplift is to support the development of new, local pools of talent in areas outside the current main production hubs, to support the geographic spread of the audio-visual sector. The regions availing of the uplift is limited to areas in Ireland sanctioned to receive regional aid under the EU regional aid guidelines.
The Government is fully aware of the unprecedented impact that the COVID-19 is having not only on the audiovisual sector, but also on the wider economy. In this regard a range of measures have been introduced to provide supports to those who need it, including supports for the cultural sector such as: forward the payment of grants awarded this year to ensure financial commitments can be met; waiving eligibility requirements which no longer apply due to the COVID-19 crisis; and an initiative to support artistic and creative life during the COVID-19 crisis. Details of these measures may be found at the following link: https://www.chg.gov.ie/covid19-supports-for-artists/
In addition to the current supports in place, my officials are examining a range of possible measures to ensure that the economy is in a position to recover while maintaining a stable tax base, including the proposal for amendments to the regional uplift. In this regard it should be noted that, as film relief is an approved State-aid, any amendments to the scheme would require approval from the European Commission.
81. Deputy Emer Higgins asked the Minister for Finance if the announcement by the Revenue Commissioners that there will be no VAT on PPE applies to dental practices; and if he will make a statement on the matter. [11049/20]
Amharc ar fhreagraThe European Commission Decision C(2020)2146, adopted on 3 April 2020, provides for the importation of goods to fight the effects of COVID -19 from outside the European Union without the payment of VAT or Customs Duty from January 2020. Such relief is permitted where the goods are imported by or on behalf of State bodies, public bodies and other bodies governed by public law, disaster relief agencies and organisations approved by Revenue including organisations regulated by the State and involved in the care, support and treatment of people at risk of COVID-19 and there is no scope to extend this to other sectors. The goods must be distributed or made available free of charge to the persons affected by or at risk from or involved in combating the COVID-19 outbreak by the bodies and organisations referred to above. The relief is scheduled to end on 31 July 2020 but there is provision for an extension if this is required following a review and consultation with Member States.
Following a request from my Department, Revenue has also implemented, on an administrative basis, the application of the zero rate of VAT to the domestic supply of personal protection equipment, ventilators, thermometers, hand sanitisers and oxygen as necessary to combat COVID-19 when supplied to hospitals, nursing homes, GP practices and the like, for use in the delivery of COVID-19 related health care services to their patients. This concessionary treatment will apply until 31 July, subject to review. The scope of the relief corresponds with the relief on the importation of these goods by the bodies specified in the Commission Decision.
Any further extension of zero rating to cover supplies of medical equipment and/or personal protection equipment to dentists and other sectors and businesses would require a change in legislation at EU level; the VAT Directive would not permit a legislative measure for the application of the zero rate of VAT to such supplies and there are no grounds in the Commission Decision that would support the adoption of such a measure, even on a temporary basis.
82. Deputy Johnny Mythen asked the Minister for Finance if he will consider an addition to fiscal policy regarding credit unions in a post-Covid-19 environment (details supplied). [11057/20]
Amharc ar fhreagra83. Deputy Joan Collins asked the Minister for Finance if he will address matters relating to support for SMEs and the wider economy as proposed by an organisation (details supplied). [11062/20]
Amharc ar fhreagraI propose to take Questions Nos. 82 and 83 together.
The Government welcomes the important work credit unions are doing to support communities throughout Ireland at this difficult time and recognises the key role that credit unions can play in rebuilding the economy, including the SME sector.
Credit unions can and do already lend to SMEs, with €114 million of commercial loans outstanding as at end September 2019. There is nothing preventing credit unions from increasing their SME lending as they currently have capacity to lend up to €900 million. The Government would be supportive of credit unions who have the financial strength, competence and the capability, undertaking more SME lending. However, the decision to lend to SMEs is a decision made by the board of each credit union taking into account commercial and regulatory factors.
As part of the Government's COVID-19 supports, it is proposed to revise the Credit Guarantee Scheme (CGS). The scheme is a Department of Business, Enterprise & Innovation (DBEI) scheme, operated by the Strategic Banking Corporation of Ireland (SBCI), and is already available for banks, non-banks and credit unions to participate in, subject to certain conditions. Officials from DBEI, SBCI and my Department have been and will be available to discuss the CGS and other State financing supports with banks, non-banks and credit unions. In this regard I have been advised that some credit union stakeholders have held exploratory discussions with the SBCI in recent months. It should be noted that any amendments to the CGS will require legislative amendments and as such will be a matter for the Oireachtas.
84. Deputy Rose Conway-Walsh asked the Minister for Finance the protections in place for persons who have mortgage approval whose medium and long-term income projections remain the same and find they are now subject to withdrawal of mortgage approval by their financial institution; and if he will make a statement on the matter. [11083/20]
Amharc ar fhreagraThe European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness. The assessment must take appropriate account of factors relevant to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The CMCAR provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which is necessary, sufficient and proportionate. In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower. This general consumer protection framework continues to apply in relation to any Covid-19 related matter, or indeed in relation to any other issue which arises between a consumer and a lender and it places a number of obligations on all regulated lenders including the obligation to act honestly, fairly, transparently and professionally, taking account of the rights and interests of the consumer, at all stages of the mortgage process and including when granting mortgage credit.
However, within the parameters of this regulatory framework, the decision to grant or refuse an individual application for mortgage credit is a commercial decision to be made by the regulated entity. A loan offer may contain a condition that the lender can withdraw or vary the offer if in the lender’s opinion there is any material change in circumstances prior to drawdown. In such cases, the decision to withdraw or vary the offer is a commercial decision for the lender.
Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. The Banking & Payments Federation Ireland (BPFI) has published a Covid-19 Support FAQ which customers can consult, or customers can contact their lender directly, if they have any queries or concerns about the impact of COVID-19 on their mortgage application. The Central Bank has also indicated that it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic.
86. Deputy Alan Kelly asked the Minister for Finance if a series of matters relating to €8.4 million paid to lawyers, barristers and consultants in respect of a tax case (details supplied) will be clarified. [11135/20]
Amharc ar fhreagraAs the Deputy is aware, the European Commission decided in August 2016 that Ireland had granted State aid to two Apple companies, ASI and AOE. The then Government decided to appeal the Commission’s decision to the European Courts in November 2016. The European Commission’s decision also required that the State recover the alleged State aid.
The €8.4m in external costs have been incurred by all the State parties involved in the case namely the Department of Finance, Revenue, NTMA, Central Bank and CSSO.
The costs incurred by the State can be generally broken into two components – costs associated with the recovery of the alleged State aid and costs associated with the State’s appeal of the European Commission’s decision to the European Courts.
I will first provide detail on costs incurred in relation to the recovery process, in line with the specific information sought. Of the total expenditure of €8.4m, approximately €4m relates to the recovery process.
Individual State entities are responsible for their specific procurement activities. I understand that solicitor firms drawn from legal framework panels established following competitive tendering processes provided the external legal support in relation to the recovery process and in the case of one State entity with external legal support also provided by Senior Counsel.
In relation to the process undertaken in my Department, a competitive tender process for the appointment of a panel of legal advisors to the Department of Finance was completed in April 2014, and again in June 2018. General Agreements are in place between the successful solicitors’ firms and the Department. A further competitive tender process among the firms on the 2014 panel was run in 2016 to select a legal advisor for the Apple case, in which William Fry was successful. William Fry assisted with the design, negotiation and formulation of the bespoke and complicated escrow legal agreement with the firm concerned to provide the basis for the recovery of the alleged State aid and to provide general assistance.
The legal services agreement allows for the extension of that contract where the services of the company continue to be required by the Department. The contract has been extended on a number of occasions, most recently in June 2020. The basis on which fees in respect of William Fry are paid is set out in the General Agreement and are at an hourly rate. These rates are considered commercially sensitive and I am not in a position to make this information available.
Secondly, I will provide further detail on the process around costs incurred in relation to the State’s appeal of the European Commission’s decision to the European Courts.
As regards this aspect, the State is represented by the Chief State Solicitor’s Office (CSSO) and Counsel in the ordinary way. All external Counsel retained by the Chief State Solicitor’s Office were nominated by the Attorney General. EU procurement obligations and national tendering guidelines exclude all of the services involved.
With the exception of the specific circumstances which I outline further below, fees paid by the CSSO to Counsel were processed by the CSSO in the same manner as all Counsels’ fees – that is, according to internal CSSO procedures which includes a value for money appraisal being carried out by the CSSO and the Office of the Attorney General and, if required, sanction from the Department of Public Expenditure.
Professional fees discharged by the CSSO fall into two categories:
a. External Counsel
b. Expert Witnesses
In relation to External Counsel, the only fees agreed in advance were Counsels’ brief fee for the oral hearing before the General Court in Luxembourg which took place in September 2019. A brief fee was agreed by the CSSO and was based on an initial estimate provided. Advice from the State Claims Agency, NTMA was provided to the CSSO prior to agreeing these fees. Advance sanction from the Department of Public Expenditure was also obtained prior to agreeing this fee.
In relation to Expert Witnesses these fees were agreed in advance.
Services provided by expert witness before the oral hearing stage were dealt with by way of an hourly rate which was advised in advance and provided to the Department of Finance on engagement. The prior sanction of the Department of Public Expenditure was obtained prior to the CSSO paying these fees.
Expert witness fees for the oral hearing were also agreed in advance. An estimate was provided to the CSSO and the prior sanction of the Department of Public Expenditure was obtained.
The basis of calculation for Counsels’ fees paid by the CSSO is by way of an assessment on a per worked item – for example brief, opinion, drafting a pleading – not an hourly rate.
The basis of calculation for experts’ fees has been by way of an hourly rate. However, for the attendance of the experts at the oral hearing an additional fee for disbursements was paid and in respect of one expert their hourly fees for attendance at the oral hearing was capped at an agreed amount.
The appeal of the Commission’s decision to the European Courts involved sourcing Counsel and specific experts where required for the provision of specialised and detailed legal and taxation advices given the complexity of the case. In respect of Counsel’s fees and fees for expert witnesses, the amount paid was considered by the office of the Attorney General and the CSSO to be fair and reasonable.
Advice from the State Claims Agency, NTMA was sought in relation to Counsels’ brief fee for the oral hearing before the General Court in Luxembourg, as referred to above, and a request by counsel for a review of other fees paid in the case.
The advice of a legal cost accountant was not sought for the expert witness fees.
87. Deputy Richard Boyd Barrett asked the Minister for Finance if he will consider asking financial lending institutes to extend the AIP, approval in principle, beyond six months for persons with mortgage approval as they will not allow drawdown of the loan while the lendee is in the wage subsidy scheme; and if he will make a statement on the matter. [11137/20]
Amharc ar fhreagraThe European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness. The assessment must take appropriate account of factors relevant to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The CMCAR further provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which is necessary, sufficient and proportionate. In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower.
Within the parameters of this regulatory framework, the decision to grant or refuse an individual application for mortgage credit is a commercial decision to be made by the regulated entity. Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. The Banking & Payments Federation Ireland (BPFI) has published a Covid-19 Support FAQ which customers can consult, or customers can contact their lender directly, if they have any queries or concerns about the impact of COVID-19 on their mortgage application. It can be noted that the FAQ indicates that lenders may extend the period of a mortgage Approval in Principle where an individual’s circumstances have not materially changed as a result of COVID-19. The BPFI state that this will likely be for 3-6 months, but it may vary depending on the lender’s assessment of an individual’s circumstances. However, if a borrower's circumstances have materially changed as a result of Covid-19, the BPFI advises that lenders may keep the application open on its system for a period of time; but this again may vary depending on the lender’s assessment of an individual’s circumstances. After this period of time, the BPFI states that the lender will undertake a review of the application which will likely include a request for the individual to provide an update on their employment and income situation.
More generally it can also be noted that the Central Bank has indicated that it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic.
88. Deputy Brendan Howlin asked the Minister for Finance if further consideration will be given to the application for the temporary wage subsidy scheme by a business (details supplied); the reason the business has been excluded from the scheme due to the fact it was closed for renovations on the designated date; and if he will make a statement on the matter. [11140/20]
Amharc ar fhreagraI am advised by Revenue that the business in question does not meet the essential criteria for qualification for the Temporary Wage Subsidy Scheme (TWSS) .
As I indicated in my reply of 3 June last to the Deputy’s previous question about the eligibility of the business concerned for the TWSS, the legislation underpinning the scheme and the scheme itself were developed quickly, having regard to the urgent objective of getting much needed financial assistance to employers and employees.
For operability reasons, the TWSS had to build on data returned to Revenue through its real-time PAYE system. The core principles of the scheme are that:
- the business is suffering significant negative economic impact due to the pandemic,
- the employees in respect of whom the wage subsidy is claimed were included on the employer’s payroll on 29 February 2020, and
- the February 2020 payroll submissions were submitted to Revenue before, in general, 15 March 2020 but recently extended, by concession, to 1 April 2020.
The latter two conditions were particularly designed with a view to preventing abuse of the scheme.
It is not possible to adapt the TWSS to provide bespoke arrangements to allow an individual employer avail of the scheme.
89. Deputy Seán Haughey asked the Minister for Finance if the rate of VAT on services provided in yoga studios will be reduced similar to the reductions implemented for other hospitality services in view of the difficulties such businesses are experiencing due to the Covid-19 pandemic; and if he will make a statement on the matter. [11141/20]
Amharc ar fhreagra91. Deputy Fergus O'Dowd asked the Minister for Finance if he will address matters raised in correspondence relating to an organisation (details supplied); and if he will make a statement on the matter. [11201/20]
Amharc ar fhreagra107. Deputy Denis Naughten asked the Minister for Finance the reason yoga and pilates were not included in the lower rate of VAT for the hospitality sector in the past; if they will be included in a future VAT reduction in the hospitality sector; and if he will make a statement on the matter. [11368/20]
Amharc ar fhreagra131. Deputy Michael McGrath asked the Minister for Finance the position regarding the application of VAT on yoga; the rate for same; if he is considering a reduction in the rate; and if he will make a statement on the matter. [11494/20]
Amharc ar fhreagra142. Deputy Cormac Devlin asked the Minister for Finance if he will consider including the yoga sector in plans to reduce the rate of VAT from 13.5% in the hospitality, hairdressing and gym sectors; and if he will make a statement on the matter. [11643/20]
Amharc ar fhreagraI propose to take Questions Nos. 89, 91, 107, 131 and 142 together.
I am advised by Revenue that the VAT rating of goods and services is subject to the requirements of the EU VAT Directive, with which Irish VAT law must comply. Under the Directive, Ireland can and does apply a reduced rate, currently 13.5%, to the supply of yoga classes; the Directive does not permit the application of a rate below 12% to the supply of such services.
90. Deputy Louise O'Reilly asked the Minister for Finance if the names of businesses availing of the temporary wage subsidy scheme that are claiming for over 100 employees will be published; the value of the subsidy being provided to these businesses in tabular form; and if he will make a statement on the matter. [11168/20]
Amharc ar fhreagraRevenue has advised me that employers within the TWSS who have more than 100 employees account for approximately 3% of all employers in the scheme and 37% of the employees being supported by the scheme.
Notwithstanding any obligations imposed on Revenue under section 851A of the Taxes Consolidation Act 1997 or any other enactment relating to the confidentiality of taxpayer information, section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020 provides that the names and addresses of all employers to whom a temporary wage subsidy has been paid will be published by Revenue on its website.
I am advised by Revenue that it will publish the details in question when the Temporary Wage Subsidy Scheme (TWSS) has ended. In the interest of fairness to all employers participating in the scheme, Revenue will not be commenting on whether any particular employer has availed of the scheme until the scheme has ended.
93. Deputy James Browne asked the Minister for Finance his views on social welfare recipients struggling to pay property tax in view of the fact they also pay housing estate management fees; and if he will make a statement on the matter. [11206/20]
Amharc ar fhreagraI am informed by Revenue that, for those property owners struggling to pay local property tax (LPT), a wide range of payment options are available to suit individual circumstances and payment of LPT can be partially or fully deferred in certain circumstances. In addition, while not restricted to recipients of social welfare payments, such people may qualify for one of the LPT exemptions.
LPT can be paid in phased payment arrangements over a year by, for example, direct debit, deduction at source from salary, occupational pensions or certain social welfare payments or at post offices.
People on low income can qualify for a full or partial deferral of LPT in certain circumstances in respect of an owner-occupied property. Those whose estimated gross income is less than €15,000 for a single person, or €25,000 for a couple, during a particular year can apply for full deferral of the LPT charge. Those whose estimated gross income is less than €25,000 for a single person, or €35,000 for a couple, can apply for a deferral of 50% of the LPT charge. In addition, the gross income amounts for certain property owners with an outstanding mortgage can be increased by 80% of the amount of the mortgage interest payments. Where a deferral is in place, the outstanding liability automatically attaches as a charge on the property and must be paid before the property is sold. Annual interest at a rate of 4% is charged on the deferred amount.
94. Deputy Michael McGrath asked the Minister for Finance his plans to review the provision by which the employment and investment incentive scheme is only available to SMEs that are less than seven years old; and if he will make a statement on the matter. [11211/20]
Amharc ar fhreagraThe Employment and Investment Incentive (EII) replaced the Business Expansion Scheme in 2011. It is a tax relief incentive scheme that provides tax relief for investment in certain corporate trades and is targeted at job creation and retention for firms in their first seven years of market operation or before that point.
Generally, companies older than seven years should be in a position to raise funding without State support, either from existing investors or from financial institutions. However, such companies may still use the EII if they are expanding into a new product or market and are looking to raise more than 50% of their average annual turnover in the previous five years. Alternatively, they may avail of EII if they are still carrying on the same activity that they originally raised funding for (for example, in the case of R&D which is still ongoing) or where the additional fund raising was foreseen in their original business plan (for example, the business plan foresaw Phase one, Phase two and Phase three fund raising).
In 2018, I commissioned a report on EII which confirmed that market failures continued in the provision of risk capital for start-up companies.
The report, which was carried out by Indecon Economic Consultants, may be found at:
https://assets.gov.ie/4045/071218130657-3be4a529aeee4999ba8d63bb0c0ff9d9.pdf
As the Deputy will be aware, subsequently the EII has been subject to significant changes in recent Finance Acts including a substantial redraft in Finance Act 2018 and changes aimed at:
- streamlining the application and approval process requirements;
- providing full income tax relief (40%) in the year in which the investment is made. This compares with current arrangements where 30% relief is provided upon the initial investment and a further 10% is given after Year 3 subject to certain conditions; and
- increasing the investment limit from €150k to €250K and to €500k in the case of those who invest for a minimum period of 10 years.
As a state aid, EII operates under the EU General Block Exemption Regulation (GBER). Article 21 of GBER allows Member States to incentivise investment in SMEs which have been in operation for less than seven years with certain exceptions. There are no plans at the present moment to review that position.
95. Deputy Ged Nash asked the Minister for Finance if his attention has been drawn to the number of cases that have had mortgage approval withdrawn as a result of being on the temporary wage subsidy scheme; if he has made formal contact with lending institutions regarding this matter; if so, the response; and if he will make a statement on the matter. [11224/20]
Amharc ar fhreagraThe European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness. The assessment must take appropriate account of factors relevant to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The CMCAR provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which is necessary, sufficient and proportionate. In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower.
Within the parameters of this regulatory framework, the decision to grant or refuse an individual application for mortgage credit is a commercial decision to be made by the regulated entity. In this context, a loan offer may contain a condition that would allow the lender to withdraw or vary the offer if in the lender’s opinion there is any material change in circumstances prior to drawdown. In such cases, the decision to withdraw or vary the offer is a commercial decision for the lender.
Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. The Banking & Payments Federation Ireland (BPFI) has published a Covid-19 Support FAQ which customers can consult, or customers can contact their lender directly, if they have any queries or concerns about the impact of COVID-19 on their mortgage application. It should also be noted that the Central Bank has also indicated that it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic.
96. Deputy Paul McAuliffe asked the Minister for Finance the estimated cost of the extension of the Covid-19 emergency payment and the temporary wage subsidy scheme. [11235/20]
Amharc ar fhreagraIn recognition of the challenges which remain for businesses across the country, the Government decided on 5 June 2020 to extend the Temporary Wage Subsidy Scheme (TWSS) until the end of August.
It is not possible to provide an accurate estimate of the cost of the extension. However, to-date, the scheme is estimated to cost roughly €500 million per week.
The intention is to continue to monitor the scheme closely in the coming weeks and months, noting that there should be a decline in costs and reliance on the scheme as the public health restrictions are eased through the summer.
Policy and cost estimates relating to the Covid-19 Pandemic Unemployment Payment are a matter for the Minister for Employment Affairs and Social Protection in the first instance.
97. Deputy Seán Haughey asked the Minister for Finance if his attention has been drawn to the fact that some financial institutions are refusing mortgage applications in cases in which applicants are on the temporary wage subsidy scheme; the steps he will take to prevent this practice; and if he will make a statement on the matter. [11236/20]
Amharc ar fhreagraThe European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness. The assessment must take appropriate account of factors relevant to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The CMCAR further provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which is necessary, sufficient and proportionate. In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower.
Within the parameters of this regulatory framework, the decision to grant or refuse an individual application for mortgage credit is a commercial decision to be made by the regulated entity. In this context, a loan offer may contain a condition that would allow the lender to withdraw or vary the offer if in the lender’s opinion there is any material change in circumstances prior to drawdown. In such cases, the decision to withdraw or vary the offer is a commercial decision for the lender.
Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. The Banking & Payments Federation Ireland (BPFI) has published a Covid-19 Support FAQ which customers can consult, or customers can contact their lender directly, if they have any queries or concerns about the impact of COVID-19 on their mortgage application. It should also be noted that the Central Bank has indicated that it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic.
98. Deputy Marc MacSharry asked the Minister for Finance if he will review the rules governing the temporary wage subsidy scheme as they apply to a company (details supplied) in County Leitrim; and if he will make a statement on the matter. [11237/20]
Amharc ar fhreagraThe Temporary Wage Subsidy Scheme (TWSS) was legislated for in section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020.
The TWSS is an emergency measure to deal with the impact of the Covid-19 pandemic on the economy. Of necessity, the underlying legislation and the scheme itself were developed really quickly, having regard to the urgent Government objective of getting much needed financial assistance to employers and employees, where businesses have been seriously affected by the pandemic and the necessary restrictions introduced to fight the spread of the Covid-19 virus. It cannot be tailored to meet every individual set of circumstances for either employers or employees.
The TWSS necessarily builds on data returned to Revenue through its real-time PAYE system. The core principles of the scheme are that:
- the business is suffering significant negative economic impact due to the pandemic,
- the employees in respect of whom the wage subsidy is claimed were included on the employer’s payroll on 29 February 2020, and
- the February 2020 payroll submissions were submitted to Revenue before, in general, 15 March 2020 but recently extended, by concession, to 1 April 2020.
Revenue advise me that the business in the instance raised by the Deputy does not meet the eligibility criteria for the TWSS at employer level and, thus, is not a position to qualify for the scheme.
100. Deputy Éamon Ó Cuív asked the Minister for Finance if he will reintroduce a lower VAT rate for the foreseeable future for the tourism industry in order to stimulate the industry which has been hit severely by the Covid-19 pandemic; and if he will make a statement on the matter. [11243/20]
Amharc ar fhreagraThe Government is fully aware of the unprecedented impact that the coronavirus is having on business and people’s livelihoods. In this regard a range of measures have been introduced to provide income support to those who need it while also giving confidence to employers to retain the link with employees so that when this crisis passes our people can get back to work as quickly and seamlessly as possible.
In addition to current support measures, my officials are examining a range of possible measures to ensure that the economy is in a position to recover rapidly while maintaining a stable tax base.
