Written Answers Nos. 217-236
217. Deputy Darren O'Rourke asked the Minister for Finance if there are provisions or plans in place for households to defer payment of the local property tax in view of the financial constraints related to Covid-19 restrictions; and if he will make a statement on the matter. [6937/21]
Amharc ar fhreagraI am informed by Revenue that it has engaged extensively with residential property owners who are experiencing financial difficulties since the pandemic began to agree flexible Local Property Tax (LPT) payment arrangements and has assured me that it will continue to do so.g
Any property owners experiencing financial difficulties can avail of a wide range of flexible payment options both in respect of 2021 liabilities and for any previous years where liabilities remain outstanding. The full range of payment options, which include phased arrangements, are available to property owners via the LPT portal on the Revenue website at link www.revenue.ie/en/property/local-property-tax/paying-your-lpt/index.aspx.
There are also existing provisions in place that allow property owners to defer payment of LPT in certain circumstances. Further information regarding the deferral of LPT is available on the Revenue website at link www.revenue.ie/en/property/documents/lpt/guidelines-for-deferral-of-lpt.pdf. However, deferral is not an exemption from LPT, and the outstanding liability remains as a charge on the property until it is paid and carries an interest charge of 4% per annum.
220. Deputy Seán Haughey asked the Minister for Finance if he will give consideration to extending the help-to-buy scheme beyond 2021; if the claimable period for this allowance is the four years prior to an application; if these four years must be full or partial tax years; and if he will make a statement on the matter. [6983/21]
Amharc ar fhreagraThe Help to Buy (HTB) incentive was introduced in 2017. The measure is currently scheduled to expire on 31 December 2021.
HTB gives a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid in Ireland over the previous four years, subject to limits outlined in the legislation. An increase in the supply of new housing remains a priority aim of Government policy.
The scheme is designed to stimulate the supply of new houses in the housing market and to assist first-time buyers in accumulating a deposit for a new home. In order to further help meet these goals, I announced an enhancement to the existing scheme with effect from 23 July last for the remainder of 2020 as part of the July Stimulus Package. The legislation that gives effect to this is set out in the Financial Provisions (Covid-19) (No.2) Act 2020. The Finance Act 2020 further extended the period of application of the enhanced levels of support until 31 December 2021.
The question of the future of HTB support beyond its current expiry date is a matter that will be considered in due course in the context of Budget 2022 and the subsequent Finance Bill.
With regard to the other parts of the Deputy's question, I am advised by Revenue that where the conditions of the scheme are met, the incentive gives a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid in the State over the four tax years preceding the year of application, subject to limits outlined in the legislation. The HTB claimants may select all or any of the previous four tax years for the purposes of calculating the HTB refund. For the purposes of the HTB scheme, a tax year is considered January to December of the relevant year. Where an applicant has only paid Income Tax for part of a tax year (e.g. if only worked August to December), the applicant may still choose that year as a relevant tax year for the purposes of the HTB scheme, and any Income Tax / DIRT paid during that year will be included in the HTB refund calculations, subject to the limits outlined in legislation.
The Tax and Duty manual Part 15-01-46 Help to Buy Scheme under part 11 provides details on how the payment is calculated and example scenarios for reference. In summary, HTB will be calculated firstly based on the amount of Income Tax paid in the preceding four years, starting with the earliest year selected by the claimant. Where the HTB maximum has not been reached, DIRT paid in the preceding four years will be taken into account, starting with the earliest year selected by the claimant.
221. Deputy Michael Creed asked the Minister for Finance the arrangements put in place in March 2020 by his Department and the Revenue Commissioners with regard to benefit-in-kind and the Covid-19 pandemic; the reason these changes were reversed in January 2021; and if he will make a statement on the matter. [6992/21]
Amharc ar fhreagraI am advised by Revenue that concessional treatment has been agreed in relation to the operation of the benefit-in-kind (BIK) tax charge on employer-provided vehicles during the course of COVID-19 related travel restrictions.
Therefore, where an employer provided vehicle is made available to an employee the following will apply for the time being:
(a) Employer Takes Back Possession of the Vehicle
Where an employer takes back possession of the vehicle and an employee has no access to the vehicle, no BIK shall apply for the period.
(b) Employer Prohibits Use
Where an employee retains possession of a vehicle, but the employer prohibits the use of the vehicle, no BIK shall apply if the vehicle is not used for private use. Records should be maintained to show that the employer has prohibited its use and no such use has occurred, e.g. communication from employer, photographic evidence of odometer etc.
(c) Employer Allows Private Use
Where an employee has a car provided by his/her employer and
- the circumstances in the previous example don’t apply;
- limited or reduced business mileage (if any) is undertaken during the period of the COVID-19 crisis; and
- personal use is limited
the amount of business mileage travelled in January 2020 may be used as a base month for the purposes of calculating the amount of BIK due. Thus, the percentage applied in the calculation of the cash equivalent, which is based on annualised business mileage, may have regard to the actual business mileage for January 2020, for the period of the COVID-19 restrictions. Appropriate records should be kept, e.g. business mileage travelled in January 2020, amount of private use, photographic evidence of odometer etc.
Employee Continues Working
Where an employee continues to undertake business travel as usual in an employer-provided vehicle, the usual BIK rules will apply. Further information on the taxation of employer-provided vehicles is available on Revenue's website.
Guidance on the above, and many other matters pertaining to COVID-19, can be found on Revenue's website.
Allowing January 2020 to be used as the base month for the calculation of business mileage in scenario (c) above enables the annualised business mileage to be calculated having regard to the actual business mileage that would likely have been undertaken in the absence of any COVID-19 related travel restrictions. This is considered to be both a fair and reasonable approach, however it is acknowledged that this approach may not cater for every individual situation.
Therefore, in situations where an employee did not have any business mileage for their current role in January 2020, for example where an employee has taken on a new role since that time, a reasonable alternative may be used to calculate the annualised business mileage for 2021. The reasonable alternative used should have due regard to the specific role carried out by the employee, and the business travel the employee would likely be expected to undertake in the absence of any COVID-19 related travel restrictions.
222. Deputy Willie O'Dea asked the Minister for Finance the remedy he plans for a person who has been refused flood risk insurance even though they had flood risk insurance for many years for the same property; his plans to alleviate this problem; and if he will make a statement on the matter. [7015/21]
Amharc ar fhreagraI am conscious of the difficulties that the absence or withdrawal of flood insurance cover can cause to homeowners and businesses. However, you should be aware that the provision of insurance is a commercial matter for insurance companies, which is based on an assessment of the risks they are willing to accept. Consequently, neither I nor the Central Bank can interfere in the provision or pricing of insurance products. This position is reinforced by the EU framework for insurance (Solvency II Directive).
With respect to the issue highlighted in the question, I would first of all recommend that the individual in question ought to contact Insurance Ireland which operates a free Insurance information service for those who have queries, complaints or difficulties in relation to obtaining insurance cover including flood insurance, at feedback@insuranceireland.eu. In addition, the person has the right to make a complaint to the Financial Services Ombudsman in relation to any dealings with a financial services or insurance provider during which they feel they have been unfairly treated.
Current government policy in relation to increasing flood insurance coverage is focused on the development of a sustainable, planned and risk-based approach to managing flooding problems. To achieve this aim there is a focus on:
- Investing almost €1 billion to flood relief measures over the lifetime of the National Development Plan 2018-2027;
- Implementation of flood relief management plans by the Office of Public Works (OPW), and;
- Maintaining channels of communication between the OPW and the insurance industry, in order to reach a better understanding about the provision of flood cover in affected areas.
The above approach is underpinned by a Memorandum of Understanding between the OPW and industry representatives Insurance Ireland, who meet on a quarterly basis to help implement this initiative. This provides for the exchange of data in relation to completed flood defence schemes which should in turn provide a basis for the increased provision of flood insurance in these areas.
I acknowledge that while there has been an overall increase in the provision of flood insurance between 2015 and 2020, some householders are still experiencing difficulties. This is particularly the case for households in areas with demountable flood defences.
My Department is reviewing the challenges of property insurance and flooding as part of the action points for my Department under the Climate Action Plan. This work is in progress and my Department will continue to provide updates on this to the Climate Action Board.
Finally, the Deputy should be assured that Minister of State Fleming and I will continue to proactively engage on all aspects of insurance reform including flood insurance issues.
228. Deputy Mattie McGrath asked the Minister for Finance if the temporary reduction to the standard rate of VAT currently in place will cease at the end of February 2021; and, if so, if it will be extended. [7136/21]
Amharc ar fhreagraI do not plan on extending the temporary reduction from 23% to 21% in the standard rate of VAT beyond the end of February.
230. Deputy Christopher O'Sullivan asked the Minister for Finance if his attention has been drawn to the fact that customers are being told by their mortgage providers that their credit rating will be affected should they need to take a second moratorium on their mortgages due to job losses as a result of Covid-19; and if he will make a statement on the matter. [7176/21]
Amharc ar fhreagraAs the Deputy is aware, last March the Banking and Payments Federation of Ireland (BPFI) announced a coordinated approach by banks and other lenders to help their customers who were economically impacted by the Covid-19 crisis. The measures included flexible loan repayment arrangements where needed, including loan payment breaks initially for a period up to three months and then subsequently extended for up to six months. The implementation of this voluntary moratorium by the banking industry was a flexible response to the emerging Covid-19 crisis and ensured that a large volume of affected customers could benefit quickly during a fast moving and evolving public health crisis.
While many borrowers whose payment break has ended have been able to return to full payments, it is also recognised that many borrowers continue to be impacted by the economic consequences of Covid-19 and that they may not be in a position to resume their loan repayment commitments when their payment break ends or may now be experiencing difficulty for the first time. These borrowers will continue to need, and will be expected to obtain, assistance and support from their lenders; this point has been made clear to lenders and has been accepted by them. Indeed in their recent 8 January statement, the BPFI reiterated that lenders were continuing to commit significant resources to those borrowers affected by the latest restrictions and that they are working with their customers to find solutions which meet individual circumstances. At this stage, rather than continuing with a general 'one size fits all' forbearance approach, it is considered that it is in the best long term interests of both the borrower and lender that engagement takes place in relation to a particular mortgage or other loan difficulty and that the most appropriate solution to the individual case - which can either be a short term or a long term restructure – is adopted as soon as possible. In such a context, the Central Bank has nevertheless confirmed that there is no regulatory impediment to lenders offering further payment breaks to borrowers, provided that they are appropriate for the individual borrower circumstance.
With regard to credit rating and records, it should be noted that lenders have an obligation to report information on all mortgage and other loans to the Central Credit Register. The Central Credit Register, which is under the remit of the Central Bank, does not produce credit ratings or credit scores. Rather the information on a credit report provided by the Central Credit Register is factual in nature; it contains no guidance, recommendation or prohibition for lenders on what decision they should make on an application for credit or repayment arrangements agreed with borrowers. Subject to complying with applicable law and regulatory requirements, it is a matter for lenders to make their own lending decisions in accordance with their own credit policies and risk appetites. The Deputy may wish to note that borrowers may access their credit report free of charge (subject to fair usage) at www.centralcreditregister.ie.
More generally, I will continue to work with the Central Bank, as regulator, to ensure that the Central Bank consumer protection and other applicable frameworks will be fully available to all borrowers that will still need support either arising from Covid-19 or otherwise.
231. Deputy Donnchadh Ó Laoghaire asked the Minister for Finance the estimated amount of revenue that would be generated if the tax relief for private health insurance premiums were abolished; and the amount of revenue if such relief were capped at 12%. [7216/21]
Amharc ar fhreagraI am advised by Revenue that, based on provisional 2020 data, the yield to the Exchequer from the abolition of tax relief for private health insurance premiums is estimated to be of the order of €377 million per year.
The estimated yield to the Exchequer from reducing the current rate of tax relief for private health insurance premiums from the standard rate of 20% to 12% would be of the order of €151 million per year.
It is noted that the above estimates are calculated on a straight-line basis and do not take account of any behavioural impact that such a change may have, including on the price of insurance premiums.
232. Deputy Sean Sherlock asked the Minister for Finance the timeline for his plans to make necessary amendments to the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994. [7226/21]
Amharc ar fhreagraI brought forward an amendment to the Finance Bill to provide for the existing medical criteria in primary legislation. Following approval of the Finance Act 2020, which provides for the medical criteria for the Disabled Drivers Scheme, the HSE has been informed that medical assessments can recommence from 1st January 2021. This is considered to be an interim solution only. A comprehensive review of the scheme, to include a broader review of mobility supports for persons with disabilities, will be conducted this year. On foot of that review new proposals will be brought forward for consideration.
Separately, the ability to hold assessments may be impacted on by, among other things, the public health restrictions in place and the role of the HSE Medical Officers in the roll out of the COVID vaccination programme.
234. Deputy Colm Burke asked the Minister for Finance if tax relief may be claimed under the medical expenses mechanism for PAYE workers in the event that a person has to bear the cost of a Covid-19 test, such as a PCR test or antigen test; if the cost is taxable if it is borne by the employer; and if he will make a statement on the matter. [7345/21]
Amharc ar fhreagraSince the commencement of the COVID-19 pandemic Revenue has published guidance on a range of matters to assist taxpayers in meeting their tax obligations, and to make them aware of several concessionary measures which have been introduced since March 2020 on foot of the unprecedented impact of the pandemic. Details of all COVID-19 related matters can be found on Revenue’s website, available here: https://www.revenue.ie/en/corporate/communications/covid19/compliance-with-certain-reporting-and-filing-obligations.aspx.
Regarding the cost of obtaining a COVID-19 test, I am advised by Revenue as follows:
Tax relief is available under section 469 of the Taxes Consolidation Act 1997 where an individual incurs “health expenses” for health care which is carried out by, or on the advice of a practitioner.
Health expenses includes the following:
(a) the services of a practitioner,
(b) diagnostic procedures carried out on the advice of a practitioner,
(c) maintenance or treatment necessarily incurred in connection with the services or procedures referred to in paragraph (a) or (b),
(d) drugs or medicines supplied on the prescription of a practitioner,
(e) the supply, maintenance or repair of any medical, surgical, dental or nursing appliance used on the advice of a practitioner,
(f) physiotherapy or similar treatment prescribed by a practitioner,
(g) orthoptic or similar treatment prescribed by a practitioner,
(h) transport by ambulance,
(i) educational psychological assessments carried out by an educational psychologist in certain circumstances, or
(j) speech and language therapy carried out by a speech and language therapist in certain circumstances.
A practitioner means any person who is either:
a. registered in the register established under section 43 of the Medical Practitioners Act 2007 or section 26 of the Dentists Act, 1985 or,
b. in respect of health care provided outside the State, is entitled under the laws of the country in which the care is provided to practice medicine or dentistry there.
Therefore, where an individual incurs expenditure in obtaining a COVID-19 test, they will be entitled to make a claim for tax relief if the costs incurred meets the above criteria. Further details in relation to tax relief for health expenses can be found on Revenue’s website, available here: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/health-and-age/health-expenses/index.aspx, and also in Tax and Duty Manual Part 15-01-12 (https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-12.pdf).
For employers, taxable trading and professional income is computed based on accounting profits as adjusted to conform with tax law. While tax law specifically disallows deductions for certain expenses, such as capital expenditure (including accounting depreciation), the central test of deductibility is whether the expense has been “wholly and exclusively laid out or expended for the purposes of the trade or profession”.
Thus, where employers incur COVID-19 related costs of a revenue nature, and where those costs were incurred to allow the business to carry on its trade or profession, they will be deductible in computing taxable profits.
In addition, no benefit-in-kind (BIK) charge will arise where, due to health and safety concerns, an employer:
a. performs COVID-19 testing on an employee at the workplace,
b. engages a third party to do such testing on behalf of the employer, or
c. provides a COVID-19 test kit to an employee for self-administration.
On 14 January 2021 Revenue published eBrief 004/2021 (https://www.revenue.ie/en/tax-professionals/ebrief/2021/no-0042021.aspx), confirming that this BIK measure relating to COVID-19 tests continues to remain in place.
