Thursday, 22 Oct 2020

Living City Initiative

Ceisteanna (47)

Brendan Howlin

Ceist:

47. Deputy Brendan Howlin asked the Minister for Finance his plans to extend the Living City Initiative to further large towns such as Wexford; and if he will make a statement on the matter. [32113/20]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

The Living City Initiative is a very specific tax incentive, established in compliance with the Department of Finance’s Tax expenditure Guidelines, with the aim of encouraging businesses and home-owners back to the centre of Irish cities in order to preserve historic buildings in special regeneration areas. I do not believe that it is a suitable vehicle for broader application beyond its original policy goal and I have no plans at present to extend the scheme along the lines mentioned by the Deputy.

An extension of Living City would amount to s. 23 type relief. These types of reliefs were, with good reason, ended a over decade ago. Also, a proposal to extend would have the potential for increased Exchequer costs and would give rise to state aid concerns. Ireland’s past experience with tax incentives in this sector strongly suggests the need for a cautionary stance.

Primary Medical Certificates

Ceisteanna (48, 53)

Rose Conway-Walsh

Ceist:

48. Deputy Rose Conway-Walsh asked the Minister for Finance the position regarding the current situation of primary medical certificates; if procedures are in place to allow for consolations via video or telephone to account for Covid-19 related restrictions; and if he will make a statement on the matter. [32116/20]

Amharc ar fhreagra

Denis Naughten

Ceist:

53. Deputy Denis Naughten asked the Minister for Finance when he plans to revise Regulation 3 of Statutory Instrument 353 of 1994; the number of applications in 2019 remission or repayment of Value Added Tax and Vehicle Registration Tax by persons with a disability; the total cost of this relief; the number of persons that have availed of the fuel grant in 2019; the total value of grants paid; the number of vehicles exempt from motor tax and the value of same in 2019; the projected underspend on foot of the suspension of the scheme to new applicants if it is not reinstated in 2020; and if he will make a statement on the matter. [32117/20]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 48 and 53 together.

I am informed by Revenue that the total cost and number of claimants for repayments of Value Added Tax (VAT) and remissions/repayments of Vehicle Registration Tax (VRT) under the Drivers and Passengers with Disabilities (DPD) scheme, as well as the total cost and number of persons who availed of the Fuel Grant in 2019, are provided in the table below.

-	€m	Number
VAT Repaid	€26.8	6,082
VRT Remitted/Repaid	€35.4	6,374
Fuel Grant	€10.5	18,504

The issue of underspend does not arise in relation to a demand led scheme.

In relation to the current cessation of primary medical certificate assessments I have set out the position in some detail in previous responses to Parliamentary Questions. A Supreme Court decision of 18th June found in favour of two appellants against the Disabled Drivers Medical Board of Appeal's refusal to grant them a PMC. The judgement found that the medical criteria set out in the Regulations did not align with the regulation making mandate given in the primary legislation to further define criteria for ‘severely and permanently disabled’ persons.

The Supreme Court decision has raised complex legal and policy issues which will require careful consideration. In parallel to that consideration there is a need to examine how best the Scheme can target resources to those persons who most need them. I am currently giving consideration to policy and legislative proposals set out by my officials and will seek to progress this issue in the coming weeks.

In the interim, on foot of the legal advice received, it became clear that it was appropriate to revisit the six medical criteria set out in Regulation 3 of Statutory Instrument 353 of 1994 for these assessments. In such circumstances, it is not proposed to continue with PMC assessments until a revised basis for such assessments is established. The medical officers who are responsible for conducting PMC assessments need to have assurance that the decisions they make are based on clear criteria set out in legislation. While Regulation 3 of Statutory Instrument No. 353 of 1994 was not deemed to be invalid, nevertheless it was found to be inconsistent with the mandate provided in Section 92 of the Finance Act 1989.

My officials were in contact with the Medical Board of Appeal and with officials in the Department of Health and will continue to liaise with them, as required, going forward. I have also written to the Minister for Health to request that there are no further PMC assessments until a sound legal basis for such assessments is re-established.

While it is regrettable that PMC assessments are currently not taking place and I acknowledge that this will result in a growing waiting list, I can give a commitment that I will seek to bring clarity to this situation as soon as possible such that PMC assessments can re-continue based on a firm legal basis, without which it is impossible to continue accepting new applicants to the scheme.

Finally, I would like to clarify that the Scheme itself is still operating. All persons or charitable organisations that can currently access the Scheme will continue to be able to do so and make claims for tax reliefs and the fuel grant in the normal manner.

Covid-19 Pandemic Supports

Amharc ar fhreagra

Joe O'Brien

Ceist:

61. Deputy Joe O'Brien asked the Minister for Finance if businesses in the events, exhibition and conference industries will be eligible to apply for the recently announced CRSS scheme; and if he will make a statement on the matter. [32183/20]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 49, 51, 57, 59, 60 and 61 together.

The details of the Covid Restrictions Support Scheme (CRSS) will be set out in the Finance Bill due to be published this week. The CRSS is a targeted support for businesses significantly impacted by restrictions introduced by the Government under public health regulations to combat the effects of the Covid-19 pandemic.

The support will be available to companies and self-employed individuals who carry on a trade or trading activities from a business premises located in a region subject to restrictions, introduced in line with the Living with Covid-19 Plan, with the result that the business is required to prohibit or considerably restrict customers from accessing their business premises. Generally, this refers to Covid restrictions at Level 3, 4 or 5 of the Government’s Plan for Living with Covid-19 but certain businesses may qualify for the support where lower levels of restrictions are in operation.

Where, as a result of the restrictions, a company or a self-employed individual is either forced to temporarily close their business, or their business is required to operate at significantly reduced levels, they will qualify for support under the scheme. Certain other conditions will apply, including that the person has a tax clearance certificate.

Qualifying businesses will be able to make a claim to Revenue under the CRSS for a cash payment, which will be known as an “Advance Credit for Trading Expenses” (“ACTE”). The ACTE will provide an immediate cash support to businesses. The amount of the ACTE will be based on an amount equal to 10% of the average weekly turnover of the business in 2019 (or in the case of new businesses, the average weekly turnover in 2020) up to €20,000 and 5% thereafter, subject to a maximum weekly payment of €5,000.

All eligible businesses can claim the support irrespective of their turnover levels, but the amount of the ACTE cannot exceed the lower of the amount based on 10%/5% of the relevant weekly turnover or €5,000 per week.

Where businesses ordinarily operate from a business premises (generally a building) located in a region for which restrictions are in operation, they may qualify under the scheme provided they meet the eligibility criteria, including the requirement that customers are either prohibited, or significantly restricted, from accessing their business premises to purchase goods or services due to the specific terms of the Covid restrictions announced by Government.

Where a business does not ordinarily operate from a fixed business premises located in a region that is subject to restrictions, such as certain musicians, that business will not meet the eligibility criteria. A business that does ordinarily operate from a music or entertainment venue (for example, a company that operates a theatre) located in a region subject to restrictions, and who meets the eligibility criteria, will however be able to claim support under CRSS.

It is not sufficient that the trade of a business, such as a travel agency, has been impacted because of a reduction in customer demand as a consequence of Covid-19, or that the business supplies goods or services to another business that qualifies for the support because, under the Covid restrictions, that other business is required to temporarily close, or significantly reduce, its activity. However, where customers of such a business are prohibited or significantly restricted from accessing the business premises in which the business is ordinarily carried on, as may be the case with travel agents under level 5 of the Plan for Living with Covid-19, the business may qualify for the CRSS.

Support provided under the CRSS will be in the form of a valuable upfront cash payment, enabling eligible businesses to meet costs associated with their business premises, such as rent, insurance and utilities, at a time when, because of the specific terms of the restrictions announced by the Government, they cannot, for a period of time, provide goods or services to their customers or can only do so to a limited extent. The scheme will not apply to a business in the events industry or in other sectors, which does not ordinarily operate from a fixed business premises located in a region subject to the restrictions, but rather supplies goods or services to a business that does qualify for support under CRSS because, under the Covid restrictions, that other business is required to temporarily close or significantly reduce its activity. Each business must satisfy the eligibility criteria in their own right.

Companies and self-employed workers who do not qualify under this scheme may be entitled to support under various measures put in place by Government, including the range of measures announced as part of Budget 2021 to support live entertainment in 2021, and existing supports available under the COVID Pandemic Unemployment Payment (PUP) and the Employment Wage Subsidy Scheme (EWSS). They may also be eligible to warehouse VAT and PAYE (Employer) debts and also excess payments received by employers under the Temporary Wage Subsidy Scheme, and the balance of Income Tax for 2019 and Preliminary Tax for 2020 for self-assessed taxpayers if applicable.

Banking Sector

Ceisteanna (50)

Catherine Murphy

Ceist:

50. Deputy Catherine Murphy asked the Minister for Finance if he will meet with the representatives of the financial services union regarding a bank (details supplied) [32208/20]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

I emphasised to representatives of Ulster Bank in my meeting yesterday that staff, customers and other stakeholders must be informed promptly about any decisions made under the ongoing strategic review being undertaken by NatWest, Ulster Bank's parent. In particular, I said that staff should be consulted and kept informed of developments in the review.

While I have no role in the review or any commercial decisions arising from the review as these are matters for Ulster Bank and Natwest, I highlighted the critically important role that Ulster bank plays in the Irish retail financial market and in the economy both as a significant employer and in terms of the communities it serves. With regard to a meeting with the Financial Services Union, I believe on balance, that it would not be advisable to hold a meeting at this stage. Ulster Bank should continue to engage directly with their staff and their representative as the review progresses.

Question No. 51 answered with Question No. 49.

Tax Code

Ceisteanna (52)

Emer Higgins

Ceist:

52. Deputy Emer Higgins asked the Minister for Finance if he will review the tax burden for persons over 66 years of age who are still making tax contributions (details supplied). [32249/20]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

In relation to taxation for those over 66, a person aged 65 and over is fully exempt from income tax where his or her total income from all sources is less than the relevant exemption limit. For 2020, the exemption limits are €36,000 for a married couple or civil partners and €18,000 for a single individual. Where an individual exceeds the exemption limit, he or she is liable to tax based on the normal system of rate bands and tax credits, subject to marginal relief where relevant.

Other tax supports for individuals in this age group include the Age Tax Credit which is available to all individuals aged 65 or over who do not qualify for an exemption from income tax. This credit is currently set at €245 for single individuals or €490 for a married couple or civil partners.

In the context of limited resources, I am satisfied that the current income tax system is fair and equitable to individuals who are over the age of 66.

In relation to the taxation of taxi drivers, I would highlight that as part of Budget 2021, the Earned Income Credit was increased to €1,650. This change will apply from the 2020 tax year and is targeted at those who are self-employed.

The position with respect to individuals’ entitlements to the Pandemic Unemployment Payment (PUP) is a matter for my colleague, the Minister for Social Protection. However, I would note that as part of Budget 2021 it was announced that self employed workers can earn up to €480 per month and still keep their PUP.

Further, I would advise the Deputy that, subject to the other relevant qualifying criteria being met, there is no restriction on persons who are over 66 in the application of the Employment Wage Subsidy Scheme (EWSS), or the loss relief measure for the self-employed that was announced in the July Stimulus package.

Question No. 53 answered with Question No. 48.

Mortgage Lending

Ceisteanna (54)

Gerald Nash

Ceist:

54. Deputy Ged Nash asked the Minister for Finance if his attention has been drawn to the fact that a bank (details supplied) is requesting information from mortgage applicants to confirm whether or not their salaries are supported through the EWSS; if his attention has further been drawn to the difficulties employees have in obtaining such information from their employer; if employees are entitled to have such information under the terms of the scheme; and if he will make a statement on the matter. [32125/20]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

As you will be aware both officials and myself have engaged and will continue to engage extensively with the Banking and Payments Federation (BPFI) and the banks directly in relation to supports for personal and business customers affected by the COVID-19 crisis. Officials in my Department are alert to issues raised directly by the public and these inform the Department’s ongoing engagement process and policy formation.

The Wage Subsidy Schemes introduced as part of the Government’s response to Covid-19 have been some of the main tools with which we have protected the income of employees who otherwise would not be working. However, whilst I acknowledge the seriousness of the situation for some mortgage applicants, what I cannot do is mandate what information is required by regulators and lenders to complete lending sustainability evaluations.

The Employment Wage Subsidy Scheme (EWSS) is an economy wide scheme open to all sectors, as was the case for the Temporary Wage Subsidy Scheme (TWSS) before it. Unlike the TWSS however, which was an income support to the employee paid via the employer, the EWSS is a subsidy to the employer, delivering a per-head subsidy on a flat rate basis. Up to €350 may be claimed by the employer retrospectively for every worker who is paid between €151.50 and €1,462 per week.

The position in relation to the EWSS does not affect any legal obligations that the employer may have to their employee as regards any terms, conditions or entitlements of their employment, including pay and hours worked. A list of employers who have availed of the EWSS will ultimately be published.

It is important to highlight that, as Minister for Finance, I cannot mandate or overrule the internal risk assessment processes in any bank, even one in which the State has a shareholding. Furthermore I am specifically precluded from intervening in the case of any individual customer with any bank, even one in which the State has a shareholding. Decisions in this regard are the sole responsibility of the board and management of the banks which must be run on an independent and commercial basis. The independence of banks in which the state has a shareholding is protected by Relationship Frameworks which are legally binding documents that cannot be changed unilaterally. These frameworks, which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market.

Notwithstanding this, officials in my Department requested a comment from Bank of Ireland on the matter you have raised and received the following:

“At Bank of Ireland we are very conscious of the potential impact of COVID-19 on income levels and we assess each application carefully taking individual customer circumstances into consideration. Where customers are progressing mortgage applications and have affordability to do so, the Bank continues to support those applications.

“Where income has changed or where we are aware of potential challenges to a customer’s income as a result of COVID-19, we are liaising with customers to understand their circumstances and assess if these are expected to change again in the future. This process has always been followed as it wouldn’t be responsible to provide somebody with a mortgage at a level that they may struggle to afford now or in the future.

“We engage closely with our mortgage applicants on an ongoing basis to ensure we fully understand their circumstances. As part of this engagement we ask employers to confirm if their employee’s income is supported by a Government scheme due to COVID-19. The Bank does not seek any information about financial support that may be provided to the employer.”

Tax Rebates

Ceisteanna (55)

Seán Sherlock

Ceist:

55. Deputy Sean Sherlock asked the Minister for Finance if a person (details supplied) in County Cork is entitled to a tax and USC refund. [32129/20]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

Revenue has advised me that the person in question is in receipt of both an occupational pension and weekly payments from the Department of Social Protection, Community and Rural Development and the Islands. These payments are taxable income sources and are subject to tax rates, rate bands and tax credits in the normal manner.

Due to the person’s level of income in 2020, no tax has been deducted from the person during the year and consequently there is no refund (of tax) due to the person. However, Revenue noted that Universal Social Charge (USC) deductions were being applied to the person's occupational pension in 2020 (year to date) even though the pension is below the €13,000 annual exemption threshold for USC.

To rectify the position, Revenue has input the necessary exemption marker to the person’s records and issued an amended payroll notification to the person's pension provider. The USC overpayment will be refunded directly to the person in their next monthly pension payment.

Finally, if the person has any further queries or concerns, the person should contact Revenue’s National PAYE Helpline at telephone number 01-7383636.

Value Added Tax

Ceisteanna (56)

Brendan Griffin

Ceist:

56. Deputy Brendan Griffin asked the Minister for Finance his plans in relation to tax back for shoppers from overseas; if he will categorically rule out raising the threshold to help protect struggling retailers, craft producers and other Irish producers, and help protect the competitiveness of Ireland as a holiday destination; and if he will make a statement on the matter. [32137/20]

Amharc ar fhreagra

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.

Question No. 57 answered with Question No. 49.

Disabled Drivers and Passengers Scheme

Ceisteanna (58)

Paul Kehoe

Ceist:

58. Deputy Paul Kehoe asked the Minister for Finance the reason the full VRT reduction applicable on the disabled driver scheme is not available to an person who purchases an electric vehicle; if he plans to amend same; and if he will make a statement on the matter. [32154/20]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

I am informed by Revenue that the Disabled Driver and Passenger Scheme provides for the remission or repayment of VRT up to the maximum limits as provided for in Statutory Instrument 353 of 1994. Section 135C(3)(b) of the Finance Act 1992 further provides that a Category A series production electric vehicle can avail of relief of up to €5,000 on the VRT due.

The Disabled Drivers and Passengers Scheme treats electric and other vehicles on the same basis; the amount of VRT due or paid on any vehicle is remitted or repaid up to the maximum relief applicable (€10,000 for VRT/VAT relief in the majority of cases). Because of the separate VRT relief for electric vehicles, the amount of VRT due or paid on such a vehicle may be lower than the maximum relief permitted. In such a case the VRT relief will equate to the actual VRT due or paid.

I have no plans to amend the Scheme in this regard.

Questions Nos. 59 to 61, inclusive, answered with Question No. 49.

Tax Code

Ceisteanna (62)

Carol Nolan

Ceist:

62. Deputy Carol Nolan asked the Minister for Finance if he will provide clarification on a pensions-related issue (details supplied); and if he will make a statement on the matter. [32195/20]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

The long established policy of providing tax relief for pension contributions is to encourage saving by employers, employees and the self-employed towards their retirement income. A repayment of contributions is only permitted in highly limited circumstances, for example due to ill-health, and as such, this would be subject to income tax.

The policy rationale underpinning this is that the State provides generous tax relief on both pension contributions and fund growth to ensure that people have sufficient savings to fund their regular costs and expenses during their retirement. However, on actual drawdown, a pension is subject to tax at the individual’s marginal tax rate. In the event of any early encashment of a pension fund, the tax relief received must be clawed back. It should also be noted that any refund of pension contributions is governed by the terms of the specific scheme or product.

As is the case with all matters of policy, while they are kept under review on a continuous basis I do not have any plans at this time to revise these pension arrangements.

It is important to point out that a very significant and comprehensive package of measures has already been put in place to assist individuals and businesses impacted by the COVID-19 pandemic. This includes the Employment Wage Subsidy Scheme (EWSS), the Pandemic Unemployment Payment (PUP), bank-related forbearance measures, and various other Government supports that were announced in the July Stimulus Package and in Budget 2021, such as the Re-Start Grants, Credit Guarantee Scheme, Covid Restrictions Support Scheme (CRSS) and the VAT reduction from 13.5% to 9%.

Banking Sector

Ceisteanna (63, 65)

Catherine Murphy

Ceist:

63. Deputy Catherine Murphy asked the Minister for Finance if he or his officials have engaged with and or corresponded with a bank (details supplied) and or a service in relation to the possibility of the bank withdrawing from the Irish banking market [32207/20]

Amharc ar fhreagra

Pearse Doherty

Ceist:

65. Deputy Pearse Doherty asked the Minister for Finance the discussions he has had with a bank (details supplied) regarding the reported closure of its branches and operations; and if he will make a statement on the matter. [32250/20]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 63 and 65 together.

I became aware that NatWest is engaged in a strategic review of its operations, including those of its subsidiary, Ulster Bank, thanks to media reports published last month. Following these media reports, officials from my Department contacted Ulster Bank and NatWest.

Yesterday, I met with representatives of Ulster Bank. I outlined that I expected that staff, customers and other stakeholders would be informed promptly about any decisions being made. In particular, I asked that staff representatives will be consulted and kept informed of developments. I also emphasised the importance of Ulster Bank to the Irish financial services market, to the wider economy and to the communities it serves.

Ulster Bank confirmed that the strategic review is ongoing and that no decision has yet been taken. Ulster Bank also confirmed that there is no set timetable for this review and that it is fully aware of the strategically important role that Ulster Bank plays in the provision of financial services to the Irish market.

While I will have further engagement with the bank as the review process continues, I would like to emphasise that I have no role in the review or any commercial decisions arising from it.

Covid-19 Pandemic Supports

Ceisteanna (64)

Bríd Smith

Ceist:

64. Deputy Bríd Smith asked the Minister for Finance when he will publish the list of companies that availed of the temporary wage subsidy scheme; if this list will detail the amount of funds claimed in each case; and if he will make a statement on the matter. [32231/20]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

Revenue has advised me that it anticipates publishing the list of employers that availed of the Temporary Wage Subsidy Scheme (TWSS) by end October 2020, in accordance with Section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020. The published list will include the names and addresses of recipient employers but will not include the subsidy amounts paid as there is no legislative basis to provide such information.

Question No. 65 answered with Question No. 63.