Written Answers Nos. 239-258
239. Deputy Christopher O'Sullivan asked the Minister for Finance if he has considered extending the loan moratorium and forbearance initiatives for businesses that are unable to meet current debt obligations. [24846/20]
Amharc ar fhreagraLast March in response to the Covid-19 crisis, the Banking and Payments Federation of Ireland (BPFI) and its members announced a 3-month payment break would be made available for their customers, including SMEs. Following the initial payment break a further 3-month extension was announced by BPFI. As such, the Deputy should note that these payment breaks were introduced on a voluntary basis and were not done so on a statutory basis.
As a result of COVID-19, the outlook remains uncertain for corporate, SME and household borrowers. Alongside other schemes and supports, payment breaks continue to support these borrowers. However, it should be noted that there has been a material reduction in the value of outstanding or active payment breaks, and those customers whose financial circumstances have normalised will return to making full payments.
The Central Bank is focused on ensuring that extensions to COVID-19 related payment breaks operate in borrowers’ best interests and in line with regulatory requirements. The Central Bank has clearly communicated and agreed with the Banking and Payments Federation of Ireland that it expects that at the end of the agreed payment break that borrowers who can return to full repayments be given, at the minimum, the option to either repay the loan within the remaining term or extend the term of the loan, without penalties noting that borrower circumstances and the appropriateness of each option may differ.
I encourage all borrowers who continue to experience financial distress to engage as early as possible with their lenders. Borrowers have a suite of regulatory protections and lenders have specific obligations to support borrowers. Borrowers should consider what they can pay and should be cautious about accruing significant amounts of arrears where it is not necessary.
For some borrowers temporary additional supports may be the answer initially, while for others the more appropriate and sustainable option will be deeper restructuring. Over the longer term, restructuring arrangements put in place must be appropriate and sustainable in the customers’ long-term interest in all cases.
Lenders must engage with borrowers to identify an appropriate and sustainable solutions. They should use the full suite of restructuring solutions available to them including short-term forbearance (such as reduced payments). Borrower circumstances differ, so the right solution for each borrower differs too.
The Central Bank of Ireland has a number of measures in place to specifically protect and support the interests of businesses. Banks must follow regulations set out in the Central Bank’s Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-sized Enterprises) Regulations 2015 (the SME Regulations).
The SME Regulations https://centralbank.ie/news/article/regulations-for-firms-lending-to-smes-from-2016 set out the required treatment of SMEs by regulated entities in relation to various aspects of business lending. This includes detailed provisions around the credit application process, requirements regarding security or collateral, credit refusals and withdrawals, handling complaints, managing arrears and having in place policies for engaging with SMEs in financial difficulty.
240. Deputy Richard Bruton asked the Minister for Finance if the extension of employment wage subsidy scheme to proprietors and executive directors of small businesses will be considered. [24901/20]
Amharc ar fhreagraThe Employment Wage Subsidy Scheme (EWSS) was legislated for in the Financial Provisions (Covid-19) (No. 2) Act 2020. The EWSS provides a flat-rate subsidy to qualifying employers, based on the number of qualifying employees on the payroll.
In order to be eligible for the scheme, an employer must be able to demonstrate that his or her business will experience a 30% reduction in turnover or customer orders between 1 July and 31 December 2020, by reference to the corresponding criteria in 2019, as a result of business disruption caused by the Covid-19 pandemic. Additionally, the employer must have a tax clearance certificate to be eligible to join the EWSS and must continue to meet the requirements for tax clearance throughout the scheme.
Executive directors are directors who are involved in the day to day management of the company. Executive directors are generally treated the same as ordinary employees provided, they are not also a proprietary director. Therefore, subject to the company meeting the eligibility conditions, the employer can claim a subsidy in respect of executive directors.
Proprietary directors are directors who can control, either directly or indirectly, more than 15% of the share capital of a company. Under the legislation as enacted, proprietary directors are not qualifying employees for the purposes of the scheme. However, as I announced at the end of July, this position has been revisited and the EWSS can be claimed by an eligible employer in respect of proprietary directors. Following the review of the matter undertaken by my Department and the Revenue Commissioners, it has been agreed that the only additional qualifying criteria that will apply in the case of proprietary directors as qualifying employees is that the proprietary director has to have been paid wages which were reported to Revenue on the payroll of the eligible employer at any stage between 1 July 2019 and 30 June 2020. Further, it has also been agreed that where a person is a proprietary director of two or more eligible companies, a claim for EWSS can only be submitted in respect of a single company only.
The amending legislation necessary to give a statutory footing to the above will be included in the Finance Bill later this year.
In the meantime, the above will be implemented by Revenue as confirmed in both a press release that was issued on 31 August (see https://www.revenue.ie/en/corporate/press-office/press-releases/2020/pr-310820-proprietary-directors-ewss-1-September.aspx) and the updated Guidance (see https://www.revenue.ie/en/corporate/communications/documents/ewss-guidelines.pdf).
241. Deputy Emer Higgins asked the Minister for Finance if the process for claiming tax credits when working from home will be simplified by automatically providing a tax credit or part thereof for each day a person works from home; and if he will make a statement on the matter. [24945/20]
Amharc ar fhreagraI am advised by Revenue that while working remotely does not entitle PAYE workers to a tax credit, there is a Revenue administrative practice in place when e-workers incur certain expenditure in the performance of their duties of employment from home. Revenue have confirmed that PAYE workers using their primary residence as a workplace during Covid-19 restrictions qualify as e-workers.
E-Workers will incur certain expenditure in the performance of their duties from home, such as additional heating and electricity costs. Revenue allows an employer to make payments up to €3.20 per day to employees, subject to certain conditions, without deducting PAYE, PRSI, or USC.
Revenue also advise that the provision of equipment, such as computers, printers, scanners and office furniture by the employer to enable the employee work from home will not attract a Benefit-In-Kind charge, where the equipment is provided primarily for business use. The provision of a telephone line, broadband and such facilities for business use will also not give rise to a Benefit-in-Kind charge, where private use of the connection is incidental.
Where an employer does not pay €3.20 per day to an e-worker, I am advised that employees retain their statutory right to claim a deduction under section 114 of the Taxes Consolidation Act (TCA) 1997 in respect of actual vouched expenses incurred wholly, exclusively and necessarily in the performance of the duties of their employment. PAYE employees are entitled to claim costs such as additional light and heat in respect of the number of days spent working from home, apportioned on the basis of business and private use.
PAYE workers can claim e-working expenses by completing an Income Tax return at year end. Revenue advise that the simplest way for taxpayers to claim their e-working expenses and any other tax credit entitlements is by logging into the myAccount facility on the Revenue website.
I am advised that detailed guidance on e-working and how claims for e-working expenses should be calculated and submitted to Revenue, are set out on the Revenue website 05-02-13.
Having regard to the foregoing, there are no plans at the present time to automatically provide a tax credit, or part thereof, where a person works from home.
242. Deputy Ged Nash asked the Minister for Finance the estimated additional revenue that would be raised by increasing the 2% stamp duty charged on residential property deals worth more than €1 million to 17% in line with the rate in the UK; his views on the appraisal by the Tax Strategy Group that the current rate is low; the action he plans to take in Budget 2021 to address the matter; and if he will make a statement on the matter. [25121/20]
Amharc ar fhreagraI am advised by Revenue that a Ready Reckoner is available on its website at link: https://www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf which provides a wide range of detailed information, including on page 18, changes to the Stamp Duty rate on residential property. While the Ready Reckoner does not show the specific costing you have requested, this can be estimated on a pro-rata or straight line basis from the data provided.
The estimates set out in the Ready Reckoner are based on the assumption of no change in behaviour by taxpayers following a rate change. However, an increase such as that you have proposed could result in significant behavioural change and the estimated yield is less likely to be achieved.
The TSG is not a decision-making body and the papers produced are simply a list of options and issues to be considered in the Budgetary process. Papers on various options for tax policy changes are prepared annually by officials for consideration be the Group.. The 2020 meeting of the Group took place on the 10th of this month, and the papers were published on the 14th https://www.gov.ie/en/publication/fdd38-budget-2021-tsg-papers/).
The 2020 TSG paper on stamp duty notes the anticipated increase in Stamp Duty Land Tax (SDLT) in the UK, which has yet to come into effect, " In the UK a maximum (stamp duty) rate of up to 17% will soon apply (delayed due to Covid-19) in the case of the purchase(r) meeting certain criteria (top rate of 12% on value over £1.5 million plus a 3% surcharge on second homes, plus a 2% surcharge on non-UK residents with effect from April 2021)."
There were a series of changes introduced to SDLT in the UK this year, and my Department will continue to monitor any impact these changes have on the property market there.
Finally, as the Deputy will be aware, it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.
243. Deputy Ged Nash asked the Minister for Finance the estimated additional revenue that would be raised by ending the current BIK rate for non-electric vehicles; and if he will make a statement on the matter. [25123/20]
Amharc ar fhreagraHaving clarified with the Deputy I understand this question is in fact referring to a reduction in theceiling on which no BIK applies for electric cars from €50,000 to €40,000 and €30,000.
I am advised by Revenue that while some employee-level taxable benefits are recorded separately in employer tax returns, the information required to estimate the Deputy’s proposals are not available.
244. Deputy Richard Boyd Barrett asked the Minister for Finance the most up to date figures for the number of jobs created by the Irish Strategic Investment Fund in its commercial partnerships; and the locations in which the jobs were created by companies obtaining such investment. [25246/20]
Amharc ar fhreagraI am informed by the National Treasury Management Agency, which manages the Ireland Strategic Investment Fund (ISIF), that this information can be obtained on the ISIF website at the following link: https://isif.ie/uploads/publications/ISIF-H1-2020-Update.pdf
The data in the report reflects detailed survey data for Financial Year 2019. Given the quantum of surveys of underlying investees and underlying investees of indirect investments and the comprehensive analysis completed, finalisation and publication of this economic impact data lags 6 months behind and so the H1 2020 update presents the most recent data available.
As the Deputy will see on page 8 of the report, at year end 2019, jobs supported by ISIF capital amounted to 38,967. Further detail on the geographic split is outlined on page 9, where it shows that Dublin accounted for 46% of these jobs, Leinster, excluding Dublin, 25%, Munster 20%, Connacht 5% and Ulster 4%. This is broadly in line with the latest available data on the Central Statistics Office regional split of Gross Value Added, where Dublin accounted for 45%, Leinster 19%, Munster 24%, Connacht 7% and Ulster 5%.
246. Deputy Richard Bruton asked the Minister for Finance if additional Covid-19 supports are being considered for sectors whose revenue throughout the period of the new Covid-19 Roadmap are likely to be impacted to a far greater extent than 30% which has featured to date in the design of supports of general application. [25269/20]
Amharc ar fhreagraI am aware of the concerns that have been raised regarding the pace of recovery for some sectors of the economy and that it has been suggested that modifications should be made to some of the new State supports on the basis of particular sectoral characteristics.
However, I would note that the reality of COVID-19 is that our whole economy and labour market have been rapidly transformed by this unprecedented shock and nearly all sectors have been negatively impacted either directly or indirectly.
The Employment Wage Subsidy Scheme (EWSS) has therefore been deliberately designed as an economy wide measure that is open to all sectors as was the case for the Temporary Wage Subsidy Scheme (TWSS) before it.
The EWSS is designed to maintain the link between employees and employers and a number of flexible elements have been introduced in the EWSS, for example, it includes employees that were not previously eligible for the TWSS, such as seasonal workers and new hires, and applications for such workers under the EWSS may be backdated to 1 July 2020.
Many of the strictest public health restrictions on the economy have been eased and it is expected that businesses are able to shoulder more of the economic burden of their businesses, so it is appropriate that the level of State subsidy be moderated. At the same time, it is recognised that economic outputs are unlikely to return to normal for many businesses for much of the rest of 2020, which is why the Government remains committed to supporting employers by means of a wage subsidy.
I am advised by Revenue that, as of 21 September 2020, there were 35,097 employers registered for the EWSS which is considered a strong level of participation so far and, notably, proportionately more than half of all those who availed of the Temporary Wage Subsidy Scheme (TWSS) over the whole duration of that scheme. This is also 78% of all employers who availed of the TWSS at its close in August, with more applications expected before the end of September.
As a result, there are no plans at present to re-visit the core eligibility criteria for the EWSS including changes to the turnover benchmark. However, I can confirm to the Deputy that the operation of the EWSS and its effectiveness will be kept under close review over the coming months. In fact, the relevant legislation obliges me to monitor and superintend the administration of the scheme and empowers me to make certain adjustments across the whole scheme where I determine that these are necessary.
For those businesses who need further support, there are a number of options open to them – including State-backed loans which may be repaid using EWSS funds as well as grants. Particular attention is drawn to the comprehensive package of business and employer supports that have been made available as part of the July Stimulus Plan - including the Credit Guarantee Scheme, the SBCI Working Capital Scheme, Sustaining Enterprise Fund, and the Covid-19 Business Loans Scheme.
247. Deputy Louise O'Reilly asked the Minister for Finance the amount collected in 2019 from pub licence fees. [25276/20]
Amharc ar fhreagraI am advised by Revenue that the receipts collected in respect of pub and other types of Excise licence in 2019 and earlier years are published on the Revenue website at the following link:
https://www.revenue.ie/en/corporate/information-about-revenue/statistics/excise/licences/excise-licences.aspx.
248. Deputy Cian O'Callaghan asked the Minister for Finance the capital gain tax yield is broken down by type of asset (details supplied) over the past five years, in tabular form; the estimated yield for 2021; and if he will make a statement on the matter. [25340/20]
Amharc ar fhreagraIn general, CGT is charged on the value of the capital gain made on the disposal of an asset. The current rate of CGT has stood at 33% cent for disposals made from 6 December 2012 with a limited number of exemptions and reliefs.
I am advised by Revenue that information in respect of Capital Gains Tax (CGT), including the types of asset disposal giving rise to taxable gains, for the most recent years available, is published on the Revenue website at:
https://www.revenue.ie/en/corporate/documents/statistics/income-distributors/summary-of-capital-gains-tax-returns.pdf.
As per the Stability Programme Update published in April 2020, the estimated yield for CGT for 2021 is €930 million. Updated estimates will be published in the context of Budget 2021.
249. Deputy Cian O'Callaghan asked the Minister for Finance the demographic breakdown, age, income, location of those who pay capital gains tax by type of assets (details supplied) for the past five years in tabular form; and if he will make a statement on the matter. [25341/20]
Amharc ar fhreagraIn general, CGT is charged on the value of the capital gain made on the disposal of an asset. The current rate of CGT has stood at 33% cent for disposals made from 6 December 2012. Ireland’s CGT regime includes a number of exemptions and reliefs. More information on CGT reliefs
(https://www.revenue.ie/en/gains-gifts-and-inheritance/cgt-reliefs/index.aspx) and exemptions (https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/what-is-exempt-from-cgt.aspx) are available on the Revenue website.
I am advised by Revenue that information in respect of Capital Gains Tax (CGT), including the types of asset disposal giving rise to taxable gains, for the most recent years available, is published on the Revenue website at link:
https://www.revenue.ie/en/corporate/documents/statistics/income-distributors/summary-of-capital-gains-tax-returns.pdf.
A breakdown by county for CGT receipts is also published at link: https://www.revenue.ie/en/corporate/documents/statistics/receipts/net-receipts-by-county.pdf .
A breakdown by age and income is not available by year. However, the Deputy may be interested in the analysis included at link: https://www.revenue.ie/en/corporate/documents/research/capital-taxes-profile.pdf, which includes information on the incomes of individuals making CGT payments.
Any changes to the CGT regime are considered in the context of annual Budget and Finance Bill process.
250. Deputy Jennifer Murnane O'Connor asked the Minister for Finance his plans to fast track finance for SMEs to enable them to reopen to the levels required to reintegrate staff and reduce figures nationally of those in receipt of pandemic unemployment payment; his further plans to address the issues being experienced by SMEs, and in particular publicans, by which they are being refused credit by lending institutions due to a lack of repayment capacity with no consideration being afforded to the fact that many still cannot trade; and if he will make a statement on the matter. [25449/20]
Amharc ar fhreagraCovid-19 has brought unprecedented challenges for all of us in society. The Government recognises the importance of the SME sector that accounts for over 99 percent of businesses and nearly 70 per cent of employment in the Irish economy. That is why a key focus of Government has been to support businesses as they work through the challenges facing them.
Government has acted decisively to counteract the worst effects of the pandemic by providing supports with a total value of €24½ billion to-date–mostly in the form of labour supports, investment in the health service and through direct supports to businesses. Some €16 billion of this is accounted for by increases in expenditure in 2020; this is over five times the increase that was planned in the original estimates for 2020 published last year.
These actions have enabled Government to introduce a range of measures to help businesses. These have included the Employee Wage Subsidy Scheme (EWSS), the ‘warehousing’ of certain COVID-19 related tax debts, competitively priced investment and working capital loan schemes and direct business supports in the form of business grants.
Furthermore, the Tánaiste, the Minister for Public Expenditure, the Minister for Agriculture and Food and I launched a €2bn Covid-19 Credit Guarantee Scheme on 7 September 2020. This scheme will ensure that SMEs, primary producers and small Mid-Caps can access liquidity to keep their businesses operating, as our economy continues to re-open and more and more people get back to work.
In relation to those businesses refused credit, the Credit Review https://www.creditreview.ie was established to assist those SMEs and farm borrowers that have had credit applications of up to €3 million refused or indeed an existing credit facility withdrawn or amended by the participating bank. SMEs can apply to Credit Review after exhausting the internal appeals process in the participating institution, which are currently AIB, BOI, Ulster Bank and Permanent TSB.
In addition, the Central Bank of Ireland has a number of measures in place to specifically protect and support the interests of businesses.
Banks must follow regulations set out in the Central Bank’s Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-sized Enterprises) Regulations 2015 (the SME Regulations).
The SME Regulations https://centralbank.ie/news/article/regulations-for-firms-lending-to-smes-from-2016 set out the required treatment of SMEs by regulated entities in relation to various aspects of business lending. This includes detailed provisions around the credit application process, requirements regarding security or collateral, credit refusals and withdrawals, handling complaints, managing arrears and having in place policies for engaging with SMEs in financial difficulty.
251. Deputy Richard Boyd Barrett asked the Minister for Finance the estimated cost of restoring tax relief for trade union subscriptions. [25504/20]
Amharc ar fhreagraThe following table sets out details of the cost of the tax relief for trade union subscriptions in the seven years immediately prior to its end, including 2010 (in which year, the measure cost some €26 million):
|
Year |
Cost (€ million) |
No. of Claims |
|
2004 |
10.7 |
248,300 |
|
2005 |
11.8 |
272,100 |
|
2006 |
19.2 |
294,300 |
|
2007 |
20.7 |
316,300 |
|
2008 |
26.4 |
341,900 |
|
2009 |
26.7 |
345,800 |
|
2010 |
26.0 |
337,500 |
I am advised by Revenue that while these figures may not provide an accurate indicator of future costs of a new scheme, there is no other basis available to Revenue on which to estimate such costs.
252. Deputy Richard Boyd Barrett asked the Minister for Finance the size of the national debt. [25517/20]
Amharc ar fhreagra253. Deputy Richard Boyd Barrett asked the Minister for Finance the estimated amount of interest that will be paid on the national debt in 2021 [25518/20]
Amharc ar fhreagraI propose to take Questions Nos. 252 and 253 together.
I am informed by the National Treasury Management Agency (NTMA) that at end-August 2020, Gross National Debt stood at almost €230bn. This is an increase of just over €23bn on the year-end 2019 position and reflects the impact of the COVID-19 pandemic on the public finances and the resultant increased borrowing requirement.
I should point out that Gross National Debt is expected to decline before year-end, primarily due to the €6.5bn bond maturity on 18 October.
After taking account of Exchequer cash balances and other financial assets, I am informed that the net measure, National Debt, stood at just under €198bn at end-August 2020.
In the April 2020 Stability Programme Update cash interest on the National Debt in 2021 was projected at just below €3.9bn. An updated estimate will be published as part of next month’s Budget.
254. Deputy Richard Boyd Barrett asked the Minister for Finance the estimated primary Exchequer surplus for 2021. [25521/20]
Amharc ar fhreagraAs the Deputy will be aware, my Department publishes a full set of economic and fiscal forecasts twice a year, in the Stability Programme Update in the spring and in the Budget in October.
My officials are currently producing an updated set of economic and fiscal forecasts as part of preparation for Budget 2021. These forecasts will be published in the Budget documentation and will include the projected Exchequer balance for next year, taking into account all revenue and expenditure developments to date.
In addition to this, the ‘white paper’, the estimates of receipts and expenditure for this year and next in a no policy change scenario, will be published prior to Budget 2021, on Friday, October 9th.
255. Deputy Richard Boyd Barrett asked the Minister for Finance the amount of revenue collected through vehicle registration tax in 2019. [25522/20]
Amharc ar fhreagraI am advised by Revenue that the Vehicle Registration Tax (VRT) receipts collected in 2019 and earlier years are published on the Revenue website at link:
https://www.revenue.ie/en/corporate/information-about-revenue/statistics/excise/receipts-volume-and-price/excise-receipts-commodity.aspx.
256. Deputy Richard Boyd Barrett asked the Minister for Finance the amount of tax that was forgone due to the knowledge box in the latest available figures. [25524/20]
Amharc ar fhreagraI am advised by Revenue that the most recent data on the annual cost and the number of claimants of the Knowledge Development Box (KDB) for the years 2016, 2017 and 2018 are published on page 16 of Revenue’s paper on 2019 Corporation Tax payments and 2018 Corporation Tax returns at link: https://www.revenue.ie/en/corporate/documents/research/ct-analysis-2020.pdf.
A claimant company has a period of up to 24 months to make a claim for KDB relief. Therefore, claims in respect of year ended 31 December 2018 may be filed up to 31 December 2020, and claims in respect of year ended 31 December 2019 may be filed up to 31 December 2021.
257. Deputy Richard Boyd Barrett asked the Minister for Finance the amount collected in stamp duty charged on the purchase of stocks and marketable securities of incorporated companies here in 2019. [25560/20]
Amharc ar fhreagraI am advised by Revenue that the available information is the yield from Stamp Duty on transactions in shares, stocks and marketable securities and is published at the following link:
https://www.revenue.ie/en/corporate/information-about-revenue/statistics/receipts/receipts-stamp-duty.aspx.
This information is not separately available in relation to Irish incorporated companies only.
For ease of reference, the 2019 figure shown is €383.62 million.
258. Deputy Richard Boyd Barrett asked the Minister for Finance the most recent figures for total household wealth and the property and financial assets less all liabilities. [25562/20]
Amharc ar fhreagraAccording to the latest figures from the Central Bank’s Quarterly Financial Accounts, the net worth, or wealth, of households in Ireland stood at €791bn at the end of the first quarter of 2020, the latest available figures. This includes financial and housing assets, net of all liabilities.
The value of total household assets excluding liabilities is €936bn.
The table below provides a breakdown of household net worth:
|
Q1 2020 |
Financial Assets |
Liabilities |
Housing Assets |
Net Worth |
|
€bn |
395 |
-145 |
541 |
791 |
Household net worth rose by 3 per cent year-on-year from Q1 of 2019, driven both by a 1.8 per cent rise in the value of housing assets and a 2.5 per cent increase in the value of financial assets. This is above the pre-crisis peak of €721bn.
The series reached a record high of €802bn in the fourth quarter of 2019, before falling slightly in the first quarter of 2020 due primarily to decreases in the value of insurance and pension schemes.
