Tuesday, 20 Oct 2020

Written Answers Nos. 220-242

Value Added Tax

Ceisteanna (222, 223)

Niall Collins

Ceist:

222. Deputy Niall Collins asked the Minister for Finance if beauty salons are part of the reduced VAT rate (details supplied); and if he will make a statement on the matter. [31434/20]

Niall Collins

Ceist:

223. Deputy Niall Collins asked the Minister for Finance if he will clarify the areas to which the 9% VAT rate will apply (details supplied); and if he will make a statement on the matter. [31435/20]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 222 and 223 together.

As the Deputy will be aware, the VAT rate applied to Tourism and Hospitality related goods and services has been temporarily reduced from 13.5% to 9%, from 1 November 2020 to 31 December 2021, in recognition of the unprecedented challenges facing the sector. This change will apply to restaurant supplies, tourist accommodation, cinemas, theatres, museums, historic houses, open farms, amusement parks, and hairdressing, as well as certain printed matter.

The VAT rates applying in Ireland are subject to the requirements of EU VAT law with which Irish VAT law must comply. While hairdressing services will apply the 9% rate from 1 November, services consisting of the care of the human body, including beauticians, are subject to the 13.5% rate.

This arises from the fact that many of goods and services to which Ireland applies a reduced rate of VAT, including services related to care of the human body, have their basis under an EU derogation that provides that as Ireland applied a reduced rate to these items on 1 January 1991, we are entitled to continue applying that reduced rate to those items. However, this is conditional on the rate being no less than 12%. These are known as ‘parked’ items, and are provided for under Article 118 of the EU VAT Directive. As the services provided by beauticians are part of these parked items, it is not possible for Ireland to apply the rate of 9% to them.

Question No. 224 answered with Question No. 197.

Question No. 225 answered with Question No. 192.

Covid-19 Pandemic Supports

Ceisteanna (226, 227, 228)

Gerald Nash

Ceist:

226. Deputy Ged Nash asked the Minister for Finance the number of businesses and employees respectively on the employment wage subsidy scheme, EWSS, in County Louth; and if he will make a statement on the matter. [31482/20]

Gerald Nash

Ceist:

227. Deputy Ged Nash asked the Minister for Finance the percentage and number of employees on the employment wage subsidy scheme, EWSS, receiving a full wage top-up contribution from their employers; the percentage and number of employees on the EWSS receiving a partial wage top-up from their employers; the percentage and number of employees on the EWSS receiving no top-up of their wages; and if he will make a statement on the matter. [31483/20]

Gerald Nash

Ceist:

228. Deputy Ged Nash asked the Minister for Finance the number and percentage of employees respectively on the lower and higher rate of employment wage subsidy scheme, EWSS, in tabular form; and if he will make a statement on the matter. [31484/20]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 226 to 228, inclusive, together.

Revenue is publishing regular statistical updates on the operation of the Employment Wage Support Scheme (EWSS), as it did previously for the Temporary Wage Subsidy Scheme (TWSS). These statistics are available at: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/number-of-taxpayers-and-returns/covid-19-wage-subsidy-scheme-statistics.aspx.

In the statistics release dated 15 October 2020 at the above link, Table 3 shows the numbers of EWSS employers and employees by county for September (the most recent full month EWSS payment data). For Louth, these figures are roughly 850 and 7,500 respectively. Regarding Question 228, Table 4 of the same statistics shows the number of employees in respect of whom EWSS is being paid, by their weekly pay range.

Regarding Question 227, the EWSS operates as a flat rate subsidy based on the number of qualifying employees on each employer’s payroll. Employers operate payroll as normal while in receipt of EWSS and therefore, unlike the TWSS, the issue of employer additional pay or top-ups does not arise.

Covid-19 Pandemic Supports

Ceisteanna (229)

Gerald Nash

Ceist:

229. Deputy Ged Nash asked the Minister for Finance the status of his plans to reform the employment wage subsidy scheme, EWSS; and if he will make a statement on the matter. [31485/20]

Freagraí scríofa

Minister for Finance

As I announced on Budget day, there will be no cliff-edge to the Employment Wage Subsidy Scheme (EWSS) which will be in place until 31 March 2021. It is noted that the legislation implementing the EWSS also provides that the scheme may be extended until the end of June 2021, should it be required.

It is acknowledged that a similar type scheme will be needed out to the end of 2021 to provide businesses with greater levels of certainty, to the greatest extent possible. The Government will decide on the form of such a measure, which is expected to be adjusted to suit the economic conditions of 2021, as they become clearer.

More immediately, the Deputy will be aware that, yesterday, the Government decided upon and announced a move to Level 5 restrictions. A revision of the rates of subsidy that may be claimed under the EWSS has been announced as part of that. As has been the case throughout the pandemic, the Government continues to operate in a highly responsive manner and to adjust policy in relation to the scheme where such changes are deemed necessary. In this regard also, the Financial Provisions (Covid-19) (No. 2) Act 2020 obliges me to monitor and superintend the administration of the wage subsidy scheme and this is a duty that I intend to carry out fully over the life of the scheme.

In the meantime, it is noted that EWSS payments have been made to almost 33,000 employers in respect of 341,200 workers in September worth €254 million which is considered strong coverage for employers who need it.

Covid-19 Pandemic Supports

Ceisteanna (230)

Gerald Nash

Ceist:

230. Deputy Ged Nash asked the Minister for Finance the status of the compliance programme for the employment wage subsidy scheme, EWSS; the number of employers that have been inspected; the number of cases requiring further investigation; the number of employers that have been sanctioned; and if he will make a statement on the matter. [31486/20]

Freagraí scríofa

Minister for Finance

The Deputy will be aware that the Employment Wage Subsidy Scheme (EWSS) was legislated for under 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.

The EWSS is administered by Revenue on a 'self-assessment' basis. I am advised by Revenue that the primary focus at the moment is on getting the scheme up and running and ensuring that all employers who are eligible for subsidy payments are registered for the EWSS and receive the payments they are entitled to quickly. Complementing this focus is a real-time monitoring, and where appropriate, review of submissions received from employers where anomalies are detected to ensure they are corrected in a timely manner, thereby ensuring employers receive their entitlements in a timely manner.

The legislation includes specific anti-abuse provisions which underpin the obligation on employers to operate the scheme as intended by the legislation, with bona fide commercial reasons underpinning any changes in the operation of employee payroll arrangements. Section 28B (6)(b)(i) refers to manipulation of payroll to include instances where contractual gross pay which would otherwise have been paid is deferred, suspended, increased or decreased. Section 28B (6)(b)(ii) refers to laying off one employee to replace him or her with more than one employee earning a lower wage, other than for bona fide commercial reasons.

The consequences of a determination by Revenue that abuse has occurred would be significant with sanctions imposed reflecting the seriousness of such actions including complete exclusion from the scheme at employer level, a requirement to repay all subsidies already received and PRSI credit issued together with interest, and the employer may face criminal prosecution. The number of sanctions issued will therefore be available in due course.

The purpose of the anti-abuse provisions are to act as a deterrent against abuse of the system. I am satisfied that these measures and the real-time monitoring of payroll submissions by Revenue will minimise the opportunity for abuse. The wage subsidy scheme is an exceptional measure to support business and employment in these difficult times and there will be no tolerance for abuse of the scheme. However, I am advised by Revenue that the vast majority of employers are making their best efforts to maintain as much employment as possible and are adjusting their payroll systems, in conjunction with their payroll software providers, to comply with the conditions of the scheme.

Covid-19 Pandemic Supports

Ceisteanna (231)

Gerald Nash

Ceist:

231. Deputy Ged Nash asked the Minister for Finance the status of the staycation subsidy grant; if the projected cost of the scheme has changed in view of level 3 restrictions; and if he will make a statement on the matter. [31488/20]

Freagraí scríofa

Minister for Finance

The Stay and Spend scheme provides tax relief by means of a tax credit at the rate of 20% on qualifying expenditure of up to €625 per person, or €1,250 for a jointly assessed couple. The tax credit is worth a maximum of €125, or €250 for a jointly assessed couple. The purpose of the scheme is to provide targeted support to businesses within the hospitality sector whose operations are likely to be most affected by continued restrictions.

The scheme is just one of a broad range of measures to support various sectors, including hospitality, at this time. For example, I announced in my Budget speech that the VAT rate applied to Tourism and Hospitality related goods and services is to be temporarily reduced from 13.5% to 9%, from 1 November 2020 to 31 December 2021, in recognition of the unprecedented challenges facing the sector.

The Stay and Spend scheme has been in operation since 1 October, and as of 16 October, 2743 business premises had registered to be Qualifying Service Providers.

Notwithstanding the Government decision and announcement yesterday to move to Level 5 restrictions, it is still too early in the lifetime of the scheme to conclude that a revision in the estimated cost of same is warranted.

Property Tax

Ceisteanna (232)

Noel Grealish

Ceist:

232. Deputy Noel Grealish asked the Minister for Finance the number of properties in County Galway, excluding Galway city, currently exempt from paying local property tax; the financial loss to the Exchequer annually due to this exemption; the number of properties in County Galway, excluding Galway city, not paying property tax for which they are liable; the financial loss to the Exchequer as a result of this; and if he will make a statement on the matter. [31509/20]

Freagraí scríofa

Minister for Finance

I am advised by Revenue that approximately 74,750 properties have been registered for Local Property Tax (LPT) for Galway County (Local Authority Area) at the end of September 2020. This includes 1,908 properties that are exempt from LPT with associated liabilities of approximately €400,000.

The LPT rate of compliance for Galway County at end September 2020 is almost 92%, which is in line with the national average. It is too early to conclude that the remaining 8% (approx. 6,000 properties) are non-compliant for LPT in 2020 as payments and requests for payment arrangements are still being received and it is expected that this trend will continue until the end of the year.

Brexit Issues

Ceisteanna (233)

Éamon Ó Cuív

Ceist:

233. Deputy Éamon Ó Cuív asked the Minister for Finance the reason it is planned to limit VAT rebate under the retail export scheme for international visitors, non-EU, to purchases over €175 as part of the Brexit omnibus Bill; if post Brexit it will be possible to have different rules applying to UK tourists compared to other non-EU states; and if he will make a statement on the matter. [31533/20]

Freagraí scríofa

Minister for Finance

I have previously outlined the rationale for the changes proposed to the VAT Retail Export Scheme. This scheme enables visitors that are resident outside the EU to benefit from VAT relief on goods purchased in Ireland and subsequently taken outside of the EU. If the scheme applies to UK visitors post-Brexit without changes UK visitors will be able to buy goods VAT free in Ireland.

This could give rise to a considerable displacement of consumer purchases, resulting in significant VAT revenue losses, as purchases by UK visitors in Ireland would not produce any VAT revenues. Due to the volume of passenger movements between the UK and Ireland, the volume of refund applications is likely to significantly increase which simultaneously heightens the risk of abuse of the Retail Export Scheme post Brexit.

As I have previously advised, the measures in the Bill are precautionary and aim both to minimise the potential for abuse of the scheme and to reduce the possibility of diversion in retail consumption from Ireland to the UK, post Brexit.

The amended legislation proposed in the General Scheme of the Brexit Omnibus Bill 2020 provides for two elements to restrict the scheme. The first is a new requirement of proof of importation of the goods into the UK and the associated proof of payment, where applicable, of relevant UK VAT and duties, for the goods purchased under the scheme in order to qualify for a refund. The second is to provide that the value of qualifying goods must exceed €175 in value in order to be eligible for a refund under the scheme. This change is fully compatible with EU law and is in line with the EU VAT Directive. The monetary limit will apply in respect of all third country travellers who apply for a refund under the scheme, post commencement of the relevant sections.

The Ireland/Northern Ireland Protocol ensures that there will be no VAT Retail Export Scheme between Ireland and Northern Ireland. Any changes to the operation of the scheme will of course be kept under review by Revenue.

Vehicle Registration Tax

Ceisteanna (234)

Seán Sherlock

Ceist:

234. Deputy Sean Sherlock asked the Minister for Finance his policy in relation to the continuation of the vehicle registration tax, VRT, relief on fully electric cars. [31547/20]

Freagraí scríofa

Minister for Finance

The VRT relief of up to €5,000 for electric vehicles will remain in place until at least 31/12/2021. Any decision to further extend this relief will be made in the context of Budget 2022 having regard to Government climate action policy and value for money considerations.

Question No. 235 answered with Question No. 202.

Question No. 236 answered with Question No. 197.

Value Added Tax

Ceisteanna (237)

Neasa Hourigan

Ceist:

237. Deputy Neasa Hourigan asked the Minister for Finance if dry cleaning, laundry and tailoring services are included in the recently announced reduction in VAT rates from 13.5% to 9%; and if he will make a statement on the matter. [31606/20]

Freagraí scríofa

Minister for Finance

The VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. The scope under the VAT Directive to apply a 9% rate is limited to certain categories, including tourism and hospitality related goods and services, but this does not include dry-cleaning and laundry services, which remain liable at the 13.5% rate. It is not intended to reduce the VAT rate applying to tailoring services at this time and therefore the 13.5% rate will continue to apply.

Fuel Rebate Scheme

Ceisteanna (238, 239, 240, 241, 242)

Verona Murphy

Ceist:

238. Deputy Verona Murphy asked the Minister for Finance the cost of the diesel rebate scheme since its inception; the number of licensed road hauliers registered to claim the rebate; the amount paid to same in 2019 and to date in 2020; and if he will make a statement on the matter. [31682/20]

Verona Murphy

Ceist:

239. Deputy Verona Murphy asked the Minister for Finance the number of licensed road hauliers entitled to the diesel rebate scheme; the number claiming same; and if he will make a statement on the matter. [31683/20]

Verona Murphy

Ceist:

240. Deputy Verona Murphy asked the Minister for Finance the number of licensed road hauliers entitled to the diesel rebate scheme and not claiming same; and if he will make a statement on the matter. [31684/20]

Verona Murphy

Ceist:

241. Deputy Verona Murphy asked the Minister for Finance the number of licensed bus operators entitled to the diesel rebate scheme and claiming same; and if he will make a statement on the matter. [31685/20]

Verona Murphy

Ceist:

242. Deputy Verona Murphy asked the Minister for Finance the number of licensed bus operators entitled to the diesel rebate scheme and not claiming same; and if he will make a statement on the matter. [31686/20]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 238 to 242, inclusive, together.

I am advised by Revenue that, under the terms of the Diesel Rebate Scheme (DRS) which came into effect on 1 July 2013, qualifying road transport operators submit their claims, via an online system, on a quarterly basis. The table below shows the number of claimants, the number of repayments and the amount repaid since the scheme commenced. A breakdown of the claimants by type of licence, vehicle or industry is not available.

Diesel Rebate Scheme

Year	Total Number of Claimants	Total Number of Repayments	Value of Repayments
2013	1,390	1,786	€6.28m
2014	2,004	6,078	€22.03m
2015	1,780	4,117	€9.93m
2016	624	1,218	€0.53m
2017	442	876	€0.79m
2018	713	1,237	€1.92m
2019	830	2,405	€9.41m
2020 to 30/09/20	833	1,584	€6.38m

The cost of the scheme per year depends on the level of uptake, which is influenced by the market price of diesel. The repayment rate is calculated quarterly on a sliding scale basis, using the national average purchase price of diesel. Since 1 January 2020, the maximum amount repayable is 7.5c per litre when the price of diesel (including VAT) is €1.43 per litre or above. There is no repayment when the price of diesel (including VAT) is at or below €1.23 per litre. Full details of the repayments rates applicable are available at: https://www.revenue.ie/en/companies-and-charities/excise-and-licences/mineral-oil-tax/diesel-rebate-scheme/diesel-rebate-rates.aspx .

As it is the responsibility of the individual transport operators to submit claims, Revenue does not have information on which operators may be entitled to a rebate but have not made a claim in respect of any period (quarter).