Written Answers Nos. 121-138
121. Deputy Joe Carey asked the Minister for Finance if he will set out his plans to address the rising cost of and issues with accessing public liability insurance for community groups to operate local festivals and events; and if he will make a statement on the matter. [11384/23]
Amharc ar fhreagraAt the outset, I wish to reassure the Deputy that I recognise the concerns felt by many community groups across the country around the cost and availability of insurance cover. Accordingly, Government has prioritised insurance reform through the Action Plan for Insurance Reform. The third Action Plan Implementation Report demonstrates that considerable progress has been achieved, with 90 percent of the 66 actions contained therein now delivered or ongoing.
Data from the Central Bank illustrates that the public liability market has been loss making for a number of years, and consequently insurers are reluctant to enter into this area. At the same time, this more specialised market segment is closely linked to global insurance trends, and is therefore slower to reflect the changes being delivered through the Government reform agenda than more commoditised products such as motor insurance. Nevertheless, there are clear signs that the market is beginning to respond to the success of the Action Plan for Insurance Reform, with insurers moving into previously problematic niche areas such as childcare, inflatables, non-standard housing and the equestrian sectors. Officials from the Department of Finance continue to engage with stakeholders in the industry to identify and encourage new capacity to enter the market. As such I am hopeful that increased cover for certain community-based events will gradually become available over the course of the year.
In terms of upcoming issues, rebalancing the Duty of Care legislation is now a priority and is being led by the Department of Justice. Overhauling this legislation should help to address the issue of ‘slips, trips and falls’, which are particularly prevalent in heavy-footfall areas and could potentially unlock further liability insurance capacity for community group activities. At present Minister of State Carroll MacNeill is involved in an intensive round of meetings with the CEOs of the main insurers and is pressing the need for firms to respond to these reforms in terms of the price and availability of cover.
Finally, I would like to take this opportunity to assure the Deputy that it is Government's intention to ensure that implementation of the Action Plan can have a positive impact on the affordability and availability of insurance across all sectors in the economy.
122. Deputy Ciarán Cannon asked the Minister for Finance if he will make provision for a reduction in the VAT rate applying to the music and entertainment sector, to align with other EU countries and protect the viability of the sector. [11387/23]
Amharc ar fhreagraUnder Irish VAT law the supply of services by writers, composers and performing artists are subject to the standard rate of VAT, currently 23%. The providers of such services are required to register for and charge VAT where their supplies exceed €37,000 per annum. However, in line with normal VAT rules, if the recipients of the services are registered for VAT and use the supplies in the course of their taxable business activities, then the VAT charged on the supply is deductible by the recipient.
Section 9 of Annex III provides that Member States may apply a reduced rate to such services; however, any consideration of this possibility would need to assess the benefit of making such a change, given that the VAT charged on services supplied to a VAT-registered business is already deductible by the recipient of the supply, under the normal VAT rules.
It is also important to be aware that Section 7 of Annex III of the VAT Directive provides that the reduced rate of VAT may be applied by Member States to admission to, among other things, cinemas, theatres and concerts. Ireland currently applies the reduced rate of VAT of 9% on a temporary basis to the promotion of and admissions to live musical performances (excluding dances). If no food and drink is available then by way of special derogation, Ireland applies an exemption to such an event.
123. Deputy Richard Bruton asked the Minister for Finance if he has evaluated the financial status of small businesses in the post-Covid period; the extent to which data from the Revenue Commissioners indicate a difficulty in meeting payments; if he can shed light on the reasons for the low take-up of the business energy cost supports offered by the Revenue Commissioners; and if he will make a statement on the matter. [11390/23]
Amharc ar fhreagraSmall and medium businesses are the foundation of the Irish economy, accounting for 99.8% of all enterprises and the majority of employment in the State. Their importance to our economy is reflected in our Programme for Government commitments.
During the COVID-19 pandemic, Government strongly supported small businesses. For example Revenue supported businesses by suspending normal debt collection activities and implementing the Debt Warehouse Scheme to provide businesses, and in particular small businesses, with vital liquidity support. A significant extension to the scheme was announced in October 2022 in light of the challenging economic situation that businesses continue to face. Under the scheme, most businesses with warehoused debt were due to enter into an arrangement with Revenue to commence repaying that debt by the end of 2022. This timeline has been extended to 1 May 2024. This means that businesses no longer have the challenge of making arrangements to repay their warehoused debt until 1 May 2024 and this significant additional time should particularly support the financial status of small businesses. Importantly also, businesses are still able to avail of the reduced 3% interest rate from 1 January 2023, as opposed to the general interest rate of 10%, when they come to pay the debt.
I am advised by Revenue that almost 67,000 individual customers are currently availing of the Debt Warehousing facility with €2.3 billion warehoused. However, at the commencement of the scheme over 250,000 customers were eligible, with declared debt of €31 billion qualifying for warehousing. Almost 93% of these eligible taxes have been paid to date, with the balance of €2.3 billion currently warehoused. Also, to date, almost 2,000 customers have voluntarily agreed payment arrangements for warehoused debt of €72 million, despite the fact that there is no obligation on them to do so until May 2024.
It remains a key condition of the Debt Warehousing Scheme that current liabilities are filed and paid on time. Revenue is actively engaging with businesses, including small businesses, to ensure they are complying with this key condition in order to retain the benefits of the scheme. Where payment difficulties arise, particularly in relation to current tax obligations, I am assured that Revenue will work proactively with businesses who engage early to resolve these payment difficulties. Revenue has a proven track record in agreeing flexible Phased Payment Arrangements to allow for the repayment of debt over a period of time.
Revenue’s expectation is that the extended timeline to 1 May 2024 for entering into arrangements for repaying warehoused debt, together with flexible payment arrangements, will assist most businesses to work through any difficulties and will satisfactorily address the repayment of their tax debt, including any warehoused debt, over an acceptable period of time. The majority of taxpayers want to do the right thing and file and pay their taxes on time, and I am advised by Revenue that this remains the case in the post-Covid period.
Sections 100 to 102 of the Finance Act 2022 make provision for the Temporary Business Energy Support Scheme (TBESS). The scheme provides support to qualifying businesses in respect of increases in their electricity or natural gas (energy) costs. As of 1 March 2023, 25,423 businesses have registered for the scheme. A total of 23,833 claims have been approved with a value of almost €52 million.
I have announced a number of significant enhancements to the scheme so that additional businesses can benefit from this vital support. With effect from 1 March 2023, the monthly limit on aid under the scheme will increase from €10,000 to €15,000 per qualifying business, subject to an overall cap of €45,000 in cases where a business is carried on from more than one location. Also from 1 March, the level of relief will increase from 40% to 50% of eligible costs. The threshold for qualification will be reduced from a 50% increase in electricity or gas costs to 30% increase (to apply retrospectively from 1 September 2022). The scheme will also be extended to 31 May 2023. Some of these changes require State aid approval and, subject to receiving that approval, will be provided for in the forthcoming Finance Bill.
In addition to the above measures, a range of direct and indirect schemes were introduced to support SMEs in response to the challenges posed by COVID-19 and the invasion of Ukraine, these include the Strategic Banking Corporation of Ireland (SBCI) SME Energy Efficiency Loan Scheme, the Ukraine Credit Guarantee Scheme and the Growth and Sustainability Loan Scheme (GSLS) which is due to be launched at the end of Q1 2023.
124. Deputy Darren O'Rourke asked the Minister for Finance the number of businesses in County Meath that have applied for the business energy support scheme; the number that have been successful; and if he will make a statement on the matter. [8319/23]
Amharc ar fhreagraThe Temporary Business Energy Support Scheme (TBESS) was introduced to support qualifying businesses with increases in their electricity or natural gas costs over the winter months.
Details of the scheme are set out in Finance Act 2022. The scheme provides support to qualifying businesses in respect of energy costs relating to the period from 1 September 2022 to 30 April 2023. However, subject to State aid approval, this period is to be extended to cover energy costs up to 31 May 2023. It is available to tax compliant businesses carrying on a trade or profession the profits of which are chargeable to tax under Case I or Case II of Schedule D where they meet the eligibility criteria.
The TBESS operates by reference to bills for the metered supply of natural gas and electricity. It is available to eligible businesses whose average unit price of electricity or gas for the relevant billing period has increased by a certain percentage as compared with the average unit gas or electricity price in the corresponding reference period in the previous year. Currently the relevant percentage is 50% however, as recently announced, and subject to State aid approval, this percentage is to be reduced to 30% on a retrospective basis, which will allow more businesses to qualify. Amounts payable under the TBESS are calculated based on a percentage of the increase in an electricity or natural gas bill as compared to a bill amount in a corresponding reference period in the previous year. Currently, the payment is based on 40% of the increase however, subject to State aid approval, this is to be increased to 50% for claim periods from 1 March 2023.
Revenue publishes detailed statistical reports in relation to the TBESS which are updated on a weekly basis. These reports are available on Revenue’s website. The registrations and claims for County Meath as of 1 March 2023 are as follows:
|
County |
Registrations |
Approved Claims |
Value of Approved Claims (€m) |
|
Meath |
931 |
868 |
2.04 |
125. Deputy Pearse Doherty asked the Minister for Finance the estimated net benefit per households, from March to end October 2023, of the reduced VAT rate applied to electricity and gas, respectively; and if he will make a statement on the matter. [11323/23]
Amharc ar fhreagraI am informed by Revenue that traders are not required to identify the VAT yield generated from the supply of specific services or supplies to particular customer groups, on their VAT returns. Therefore, Revenue does not have data from tax returns on which to base an accurate estimate of the net benefit per household arising from the reduced VAT rate of 9% applied to electricity and gas between March 2023 and the end of October 2023.
However, using third party data, the overall cost of the measure as it applies to households is tentatively estimated to be in the region of €70m for electricity and €16m for gas. The benefit per household is estimated to be in the region of €38 for electricity and €26 for gas.
126. Deputy Brendan Smith asked the Minister for Finance the number of County Cavan businesses that have applied for assistance under the temporary business energy support scheme to date; the number of County Monaghan businesses that have applied; the number of County Cavan applications that have been successful; the number of Monaghan applications that have been successful; the estimated value or worth of the support to date for each county; and if he will make a statement on the matter. [11324/23]
Amharc ar fhreagra133. Deputy Jackie Cahill asked the Minister for Finance the number of County Tipperary businesses that have applied for assistance under the temporary business energy support scheme to date; the number that have been successful; the estimated value or worth of the support to date for businesses in County Tipperary; and if he will make a statement on the matter. [11309/23]
Amharc ar fhreagra135. Deputy Pádraig O'Sullivan asked the Minister for Finance the number of County Cork businesses that have applied for assistance under the temporary business energy support scheme to date; the number that have been successful; the estimated value or worth of the support to date for businesses in County Cork; and if he will make a statement on the matter. [11346/23]
Amharc ar fhreagraI propose to take Questions Nos. 126, 133 and 135 together.
The Temporary Business Energy Support Scheme (TBESS) was introduced to support qualifying businesses with increases in their electricity or natural gas costs over the winter months.
Details of the scheme are set out in Finance Act 2022. The scheme provides support to qualifying businesses in respect of energy costs relating to the period from 1 September 2022 to 30 April 2023. However, subject to State aid approval, this period is to be extended to cover energy costs up to 31 May 2023. It is available to tax compliant businesses carrying on a trade or profession the profits of which are chargeable to tax under Case I or Case II of Schedule D where they meet the eligibility criteria.
The TBESS operates by reference to bills for the metered supply of natural gas and electricity. It is available to eligible businesses whose average unit price of electricity or gas for the relevant billing period has increased by a certain percentage as compared with the average unit gas or electricity price in the corresponding reference period in the previous year. Currently the relevant percentage is 50% however, as recently announced, and subject to State aid approval, this percentage is to be reduced to 30% on a retrospective basis, which will allow more businesses to qualify. Amounts payable under the TBESS are calculated based on a percentage of the increase in an electricity or natural gas bill as compared to a bill amount in a corresponding reference period in the previous year. Currently, the payment is based on 40% of the increase however, subject to State aid approval, this is to be increased to 50% for claim periods from 1 March 2023.
Revenue publishes detailed statistical reports in relation to the TBESS which are updated on a weekly basis. These reports are available on Revenue’s website. The registrations and claims for County Cavan, County Cork, County Tipperary and County Monaghan as of 1 March 2023 are as follows:
|
County |
Registrations |
Approved Claims |
Value of Approved Claims (€m) |
|
Cavan |
559 |
490 |
1.11 |
|
Cork |
3,249 |
3,005 |
5.74 |
|
Monaghan |
549 |
481 |
1.16 |
|
Tipperary |
1,055 |
904 |
1.43 |
127. Deputy Paul McAuliffe asked the Minister for Finance the number of Dublin businesses that have applied for assistance under the temporary business energy support scheme to date; the number that have been successful; the estimated value or worth of the support to date for businesses in Dublin; and if he will make a statement on the matter. [11304/23]
Amharc ar fhreagraThe Temporary Business Energy Support Scheme (TBESS) was introduced to support qualifying businesses with increases in their electricity or natural gas costs over the winter months.
Details of the scheme are set out in Finance Act 2022. The scheme provides support to qualifying businesses in respect of energy costs relating to the period from 1 September 2022 to 30 April 2023. However, subject to State aid approval, this period is to be extended to cover energy costs up to 31 May 2023. It is available to tax compliant businesses carrying on a trade or profession the profits of which are chargeable to tax under Case I or Case II of Schedule D where they meet the eligibility criteria.
The TBESS operates by reference to bills for the metered supply of natural gas and electricity. It is available to eligible businesses whose average unit price of electricity or gas for the relevant billing period has increased by a certain percentage as compared with the average unit gas or electricity price in the corresponding reference period in the previous year. Currently the relevant percentage is 50% however, as recently announced, and subject to State aid approval, this percentage is to be reduced to 30% on a retrospective basis, which will allow more businesses to qualify. Amounts payable under the TBESS are calculated based on a percentage of the increase in an electricity or natural gas bill as compared to a bill amount in a corresponding reference period in the previous year. Currently, the payment is based on 40% of the increase however, subject to State aid approval, this is to be increased to 50% for claim periods from 1 March 2023.
Revenue publishes detailed statistical reports in relation to the TBESS which are updated on a weekly basis. These reports are available on Revenue’s website. The registrations and claims for County Dublin as of 1 March 2023 are as follows:
|
County |
Registrations |
Approved Claims |
Value of Approved Claims (€m) |
|
Dublin |
5,482 |
5,423 |
14.65 |
128. Deputy Catherine Connolly asked the Minister for Finance further to Parliamentary Question No. 121 of 24 January 2023, his plans for the phasing out of the help-to-buy scheme; the timeline for same; the details of any analysis carried out by his Department into the impact of the scheme on the price of new houses in 2022; and if he will make a statement on the matter. [11106/23]
Amharc ar fhreagraAs indicated in my predecessor's Budget 2023 address to the House on 27 September 2022, the Help to Buy scheme has been a significant support for first time buyers of new homes. Since its inception in 2017 and to 31 January 2024, some 37,500 first-time buyers, either singly or as part of a couple, have benefited from the scheme. To reiterate the response to Parliamentary Question No. 121 of 24 January 2023, it remains the case that, as with any tax expenditure, the scheme will be kept under review. In the meantime, however, the Government has decided to continue the scheme, at current rates, until the end of 2024 and this has been legislated for in the Finance Act 2022. The future of the measure beyond end-2024 will be considered in due course.
A comprehensive review of the Help to Buy scheme carried out by external consultants, Mazars, was completed July 2022. A recommendation arising from the review was that the scheme be extended in its form for two further years. The decision to extend the scheme until the end of 2024 aligns with this recommendation.
The Mazars report also indicated there was not sufficient data available to indicate that the scheme, of itself, was having a significant inflationary effect within our property market. The scheme is confined to first-time purchases and to new supply, including self-build homes. For that reason, the total number of transactions that benefit from the Help to Buy scheme is a minority of the overall transactions of homes that take place in our State each year. For those reasons, I agree with Mazars that there isn't definitive evidence that Help to Buy pushed up the price of new houses.
The report can be found at the following link:
assets.gov.ie/235748/3b8ca22f-969c-40ab-a278-08583d533b48.pdf
131. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which positive conclusions can be drawn from this country’s economic performance when considered alongside other eurozone countries and all other European countries; if the methodology for the measurement of the economy here continues to be robust and accurate; and if he will make a statement on the matter. [11301/23]
Amharc ar fhreagraIn 2022, the Irish economy continued to exhibit strong growth when compared to its EU and Eurozone counterparts. Irish GDP grew by 12 per cent, compared to growth rates of around 3½ per cent in the Eurozone and wider European Union. This is reflective of very strong growth in the multinational sector, where the value of goods exports produced and shipped from here increased by 26 per cent last year.
There are no inaccuracies in the way that Irish GDP is calculated, and it is measured in the same way here as it is measured across all European countries. However, as I have noted on numerous occasions GDP is not an accurate measure to be used in assessing the living standards of Irish residents, and my Department has been pro-active in highlighting this. This is why my Department and many other institutions use measures such as GNI* and modified domestic demand (MDD) which strip out the main globalisation-related distortions from GDP. MDD increased by 8.2 per cent in 2022, representing strong growth in the domestic sector, some of which is boosted due to the comparison with 2021 during which we had a lock-down period.
At the same time, it is important to note that there is considerable genuine value added created in Ireland by the multinational sector. Pharmaceutical exports from Ireland reached €134 billion last year, up by roughly 30 per cent, while exports in the ICT sector grew by 13 per cent in 2022, despite the challenges in that sector.
Furthermore, the substantive operations of these firms is borne out by the fact that over 300,000 people are employed in the multinational sector in Ireland, roughly one-eighth of our labour force. As well as employment, the multinational sector plays a key role in supporting the domestic economy via income and corporate taxes, and indirectly through trading with Irish SMEs.
134. Deputy Holly Cairns asked the Minister for Finance if he will provide an update on his engagement with the credit union movement concerning the Credit Union (Amendment) Bill 2022. [11392/23]
Amharc ar fhreagraMinister Carroll MacNeill will lead the Government's engagement with the credit union sector in relation to the Credit Union (Amendment) Bill 2022 and other credit union matters.
Since Minister Carroll MacNeill was appointed to her position, she has met with the Irish League of Credit Union (ILCU), the Credit Union Manager's Association (CUMA) and the National Supervisors Forum (NSF). She has also attended the Credit Union Development Association (CUDA) annual conference, a roundtable with credit unions in Tipperary, the quarterly sector Stakeholder Roundtable and met with the Registrar of Credit Unions. A significant number of stakeholder engagements are planned for the coming months.
Last week, Minister Carroll MacNeill, brought the Credit Union (Amendment) Bill 2022 to the Dáil Chamber for debate. The topics raised by many deputies in that debate will be considered in finalising the Bill.
Separately, officials from the credit union policy team have very regular engagement with sector stakeholders and are currently considering submissions from both the sector and the Central Bank on the Bill.
136. Deputy Aindrias Moynihan asked the Minister for Finance his engagement with the insurance companies that provide home insurance to ensure new-build passive housing can secure home insurance; if he is aware of the difficulties with new flat-roof options for passive housing being declined for home insurance; and if he will make a statement on the matter. [11326/23]
Amharc ar fhreagraAt the outset, it is important to note that neither the Minister of State, the Minister for Finance, nor the Central Bank of Ireland, can intervene in the provision or pricing of insurance products. This position is reinforced by the EU framework for insurance (the Solvency II Directive). Consequently, the Minister is not in a position to direct insurance companies as to how they price their policies or what terms and conditions they apply in those policies.
However, the Government is keenly aware of the impact that insurance costs can have on many groups – including homeowners - and has therefore prioritised insurance reform via the Action Plan for Insurance Reform, applying a whole-of-Government approach to its implementation. Work is progressing well to implement these important reforms, with the last Action Plan Implementation Report showing that 90 percent of the actions have been delivered or initiated. Focus has now moved to implementing the outstanding elements of the Action Plan to increase both the affordability and availability of insurance for all consumer groups. At present Minister of State Carroll MacNeill is involved in an intensive round of meetings with the CEOs of the main insurers and is pressing the need for firms to respond to these specific issues.
Insurers are obliged to assess the risk involved as part of any application for insurance, which will be specific to the individual applicant, and the availability of cover depends on a number of factors. Officials from the Department of Finance have engaged with industry regarding this question and have been informed that flat roofs represent a specific underwriting risk, and that decisions regarding cover for these vary among insurers.
With this in mind, it is important for policyholders to compare with other providers to ascertain if they can get a better consumer-focused deal by switching. It may interest you to know that Insurance Ireland has detailed advice around home insurance on its consumer website, www.understandinginsurance.ie. Insurance Ireland also operates an Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance, which can be accessed at feedback@insuranceireland.eu. Likewise, Brokers Ireland provides assistance to customers who are experiencing insurance accessibility issues, and can be contacted at insurancequeries@brokersireland.ie.
137. Deputy Marc Ó Cathasaigh asked the Minister for Finance if he will outline the VAT treatment of used car imports into Ireland from Northern Ireland and from Great Britain; if the Windsor Framework will have any effect on this; and if he will make a statement on the matter. [11092/23]
Amharc ar fhreagraThe Deputy should note that since the UK left the EU Single Market and Customs Union, from 1 January 2021, the movement of goods from Great Britain into the EU is an importation from a third country and, in accordance with the terms of the Withdrawal Agreement, such goods must be declared to Customs, and are liable to customs duty (if applicable) and VAT at import.
Under the terms of the Protocol on Ireland/Northern Ireland, the movement of goods between Northern Ireland and the EU effectively is regarded as a movement within the EU. However, a particular issue emerged in relation to used cars – known as “margin scheme cars” – following a significant change that the UK unilaterally made on 14 January 2021 which impacted considerably on the application of the Withdrawal Agreement and the Protocol. The UK introduced significant changes to the VAT regime for used cars imported from Great Britain into Northern Ireland and extended the scope of the Margin Scheme to them. The UK asked the Commission for a permanent derogation from the VAT Directive to allow them to operate the scheme, but the Commission refused on the basis that the margin scheme could not be applied on sales in Northern Ireland of second-hand cars imported from any third country including Great Britain. In simple terms, as well as the loss of tax revenue, there was a concern that such a measure would provide an unfair competitive advantage for Northern Ireland car dealers over their counterparts in this market.
As a result, and after considering the scale of the threat posed by the abusive routing of cars imported into the State from Great Britain through Northern Ireland and the resulting non-payment of VAT at import, Revenue changed its guidance and indicated that cars imported from Great Britain into Northern Ireland after 31 December 2020 could only be subsequently imported into the State and reregistered here after they were declared to customs and customs duty, if applicable, and VAT at import were paid. This ensures that they are liable for VAT and Duty on the same basis as used cars brought into the State from Britain. The additional paperwork requirements have been kept to a minimum with a simplified Supplementary Import Declaration (SID) being required which allows the VAT on import to be paid. The guidance also indicated that used cars imported into Northern Ireland from Great Britain prior to 1 January 2021 would not be subject to the need to complete a customs declaration and would not be liable to customs duty or VAT at import.
This approach addressed the risk of substantial tax avoidance that had been posed since the UK’s 14 January 2021 announcement. The aim was to bring equal tax treatment to used car imports from Great Britain into the State, whether they be imported through a direct or an indirect route. The approach was intended to be a temporary measure, pending a resolution to the issue between the UK and the European Commission.
The Windsor Framework, a proposed post-Brexit legal agreement between the European Union and the United Kingdom, was announced on 27 February 2023. The Framework itself does not specifically refer to used cars. However, I understand that the UK Government’s guidance material on the Framework states that the agreement protects Northern Ireland’s second-hand car market into the future with a new scheme to take effect from 1 May 2023, ending two years of uncertainty for traders and consumers. We understand this to be a reference to a proposed VAT Refund Scheme in respect of second-hand vehicles exported from Great Britain that was announced by the UK Government late last year, but details on how it will operate have not been published as yet.
Ireland’s current arrangements will be reviewed when we have more information about the proposed UK scheme and will, if appropriate, be amended.
