Written Answers Nos. 26-45
26. Deputy Richard Bruton asked the Minister for Transport to consider making arrangements whereby Irish people with driving licences obtained while living abroad could avail of some form of recognition or fast track to certify their competence. [27503/24]
Amharc ar fhreagraIrish driver licensing law operates within a framework of EU law. Driver licensing laws are intended to ensure drivers on our roads meet high safety standards. Testing standards are set at EU level.
Ireland may make bilateral agreements on licence exchange with non-EU jurisdictions. This is not a straightforward matter. Reaching them is not a matter of political will and the core principle is to ensure the continued safety of Irish road users. Agreements can be made only when the authorities in each jurisdiction have studied and compared the licensing regimes, so that each side is satisfied that they are compatible. For Ireland, this is undertaken by the Road Safety Authority (RSA).
In order to drive here, people with a non-exchangeable licence who come to reside in Ireland must obtain an Irish licence. A person with a full but non-exchangeable licence must go through the normal driver learner permit process, but they can avail of the shorter Essential Driver Training of 6 lessons, instead of the usual 12, and they do not have to be a learner for the usual minimum of 6 months before taking a driving test.
27. Deputy Patricia Ryan asked the Minister for Transport his plans, if any, to add Athy, Monasterevin and Newbridge to the extended commuter area, as the cost of train fares from these stations is more expensive than the cost of driving to Sallins and getting a train from there, thus increasing road traffic and contributing to climate change. [27565/24]
Amharc ar fhreagraAs Minister for Transport, I have responsibility for policy and overall funding in relation to public transport. However, I am not involved in the day-to-day operations of public transport. The National Transport Authority (NTA) has responsibility for the regulation of fares charged to passengers in respect of public transport services provided under public service obligation (PSO) contracts.
In light of the NTA's responsibility in this area, I have forwarded the Deputy's question to the NTA for direct reply. Please advise my private office if you do not receive a response within ten working days.
28. Deputy Patricia Ryan asked the Minister for Transport the measures that can be taken to ensure tractors use a by-road (details supplied) specifically provided and not the motorway, thus causing a traffic-road hazard. [27571/24]
Amharc ar fhreagraAs the Deputy may know, tractors may be driven on the motorway so long as they are capable of maintaining a minimum speed of 50km/h. My Department has no plans to amend the current legislation.
Although my Department legislates for tractor use on motorways, the enforcement of road traffic legislation is a matter for An Garda Síochána.
29. Deputy Jim O'Callaghan asked the Minister for Finance the number of homebuyers in each county who have availed of the help-to-buy scheme since July 2020, in tabular form; and if he will make a statement on the matter. [27301/24]
Amharc ar fhreagraI am advised by Revenue that as of 24 June 2024, the number of approved Help to Buy (HTB) claims in respect of the purchase of new houses or apartments that were approved on or after 1 July 2020, are set out in the table below, broken down by county.
|
Property County |
Number of Approved Claims |
|
Carlow |
213 |
|
Cavan |
115 |
|
Clare |
212 |
|
Cork |
3,247 |
|
Donegal |
240 |
|
Dublin |
4,017 |
|
Galway |
723 |
|
Kerry |
75 |
|
Kildare |
3,811 |
|
Kilkenny |
259 |
|
Laois |
639 |
|
Leitrim |
16 |
|
Limerick |
586 |
|
Longford |
10 |
|
Louth |
1,070 |
|
Mayo |
216 |
|
Meath |
2,600 |
|
Monaghan |
74 |
|
Offaly |
328 |
|
Roscommon |
83 |
|
Sligo |
148 |
|
Tipperary |
112 |
|
Waterford |
597 |
|
Westmeath |
297 |
|
Wexford |
714 |
|
Wicklow |
1,198 |
|
Totals |
21,600 |
30. Deputy Jim O'Callaghan asked the Minister for Finance the total number of rent tax credit claims made in each of the years 2022, 2023 and to date in 2024, by county, in tabular form; and if he will make a statement on the matter. [27303/24]
Amharc ar fhreagraThe Rent Tax Credit (RTC), as provided for in section 473B of the Taxes Consolidation Act 1997 (TCA 1997), was introduced by the Finance Act 2022 and may be claimed in respect of qualifying rent paid in 2022 and subsequent years to end-2025.
I am advised by Revenue that the RTC statistics currently available refer only to PAYE taxpayers. Data on self-assessed taxpayers are not yet available. These data will be available, in respect of the 2022 year of assessment, later in 2024 when the self-assessed tax returns for that year, filed in late 2023, are fully analysed.
I am further advised by Revenue that the data are provisional and subject to change.
The below table outlines the number of claimants by year of assessment and by county for 2022, 2023 and 2024 as at 17 June 2024.
Rent Tax Credit claimants are on a ‘taxpayer unit’ basis. A taxpayer unit is either an individual with any personal status who is singly assessed or a couple in a marriage or civil partnership who have elected for joint assessment.
The below table outlines the number of claimants by year of assessment and by county for 2022, 2023 and 2024 as at 25 June 2024.
|
County |
2022 Year of Assessment |
2023 Year of Assessment |
2024 Year of Assessment |
|
Carlow |
2,553 |
2,295 |
471 |
|
Cavan |
2,356 |
2,327 |
466 |
|
Clare |
3,528 |
3,276 |
770 |
|
Cork |
31,128 |
27,919 |
6,468 |
|
Donegal |
3,490 |
3,219 |
753 |
|
Dublin |
129,437 |
122,371 |
29,217 |
|
Galway |
19,629 |
16,818 |
4,135 |
|
Kerry |
4,294 |
3,915 |
761 |
|
Kildare |
10,022 |
9,397 |
2,171 |
|
Kilkenny |
2,971 |
2,849 |
620 |
|
Laois |
2,210 |
1,994 |
493 |
|
Leitrim |
887 |
790 |
186 |
|
Limerick |
13,419 |
11,499 |
2,658 |
|
Longford |
1,637 |
1,566 |
306 |
|
Louth |
3,864 |
3,703 |
811 |
|
Mayo |
4,025 |
3,753 |
871 |
|
Meath |
5,320 |
5,340 |
1,095 |
|
Monaghan |
2,012 |
1,935 |
398 |
|
Offaly |
2,328 |
2,209 |
492 |
|
Roscommon |
1,790 |
1,714 |
396 |
|
Sligo |
3,202 |
2,757 |
627 |
|
Tipperary |
4,972 |
4,684 |
960 |
|
Waterford |
5,348 |
4,916 |
1,151 |
|
Westmeath |
4,041 |
3,808 |
881 |
|
Wexford |
4,418 |
4,056 |
894 |
|
Wicklow |
3,401 |
3,265 |
771 |
|
Not Currently Available |
3,966 |
2,827 |
601 |
|
Total |
276,248 |
255,202 |
59,423 |
31. Deputy Duncan Smith asked the Minister for Finance the reason a tax clearance certificate has not issued to a person (details supplied); and if he will make a statement on the matter. [27331/24]
Amharc ar fhreagraRevenue has advised me that the person concerned applied for tax clearance in April 2022 for the purposes of applying for grant payments. Following that application, the person held tax clearance until November 2022, when it was withdrawn due to an outstanding payment for Local Property Tax at that time.
I am further informed by Revenue that no further applications for tax clearance have been made by the person since that time.
If the person still requires tax clearance, a new application should be made through the electronic Tax Clearance (eTC) system. This system is available 24 hours a day and can be accessed via the Revenue Online Service ROS (Business customers) or MyAccount (PAYE and non-ROS customers).
If the person is unable to use online services, an application can be made by completing a paper TC1 form and submitting it by post to Customer Service, Revenue, Sarsfield House, Francis Street, Limerick, V94 R972. If any further assistance is required, Revenue has advised that the person can contact 01-7383663.
32. Deputy Marc Ó Cathasaigh asked the Minister for Finance if he is aware of the practice of insurance companies to increase car insurance premium renewals based on specific addresses of the policy owners, while not taking into account security measures such as CCTV, driveways, and so on; and if he will make a statement on the matter. [27355/24]
Amharc ar fhreagraFirstly, it's important to clarify that neither I nor the Central Bank of Ireland have the authority to dictate insurance pricing or product offerings, as these are commercial decisions made by individual companies, governed by the EU Single Market framework for insurance (the Solvency II Directive).
In terms of motor insurance, firms use various rating factors when deciding whether to provide coverage and on what terms. These factors can include the driver’s age, driving experience, vehicle age and type, usage, claims history, number of drivers, where the vehicle is kept at night, and the address of the policyholder. Insurers continuously review and analyse relevant data so that even if the insured has not changed address, insurers view of this risk factor may have altered since the last renewal. Insurers base their prices on their own claims experiences, which means companies may weigh these factors differently. Additionally, increasing costs for repairs and labour due to inflation are contributing to premium increases. Consequently, prices vary across the market.
The Government is committed to enhancing market competition, but ultimate decisions on pricing and underwriting are made by individual insurers based on risk assessments and statistical data. Nonetheless, the Government has prioritized insurance sector reform through the Action Plan for Insurance Reform, targeting 66 measures aimed at reducing costs for consumers and businesses, increasing market competition, preventing fraud, and easing the financial burden on individuals, businesses, and community/voluntary organizations.
According to the latest Implementation Report, the vast majority of the Action Plan is complete, with significant reforms in areas such as personal injury awards, the claims process (Injuries Resolution Board), and the Duty of Care (Occupiers’ Liability Act 1995). Minister of State Richmond is actively engaging with CEOs of major insurance companies to emphasise the importance of passing on savings from the reformed insurance environment to customers through lower premiums.
Additionally, these measures have been successful in attracting new entrants to the Irish insurance market. OUTsurance, a new major home and motor insurer has recently launched, which is a positive development for consumer choice and competition. This is a sign that the Government’s reform agenda is having a positive impact and I wish to assure the Deputy that I will continue to work with colleagues to ensure that this remains the case.
33. Deputy Richard Boyd Barrett asked the Minister for Finance further to Parliamentary Question No. 164 of 28 May 2024, the basis on which Ireland does not impose restrictive measures unilaterally; if this is a matter of Government policy or whether he is bound by law not to exercise the powers contained in Article 42 of the Criminal Activity (Terrorist Offences) Act 2005; and if he will make a statement on the matter. [27371/24]
Amharc ar fhreagra34. Deputy Richard Boyd Barrett asked the Minister for Finance further to Parliamentary Question No. 164 of 28 May 2024, if he or his predecessors have ever exercised the powers contained in article 42 of the Criminal Activity (Terrorist Offences) Act 2005; if Ireland has previously imposed restrictive measures on those carrying out terrorist, terrorist-linked, or terrorist-financing activity in a domestic context by mechanisms other than EU-level sanctions; and if he will make a statement on the matter. [27372/24]
Amharc ar fhreagraI propose to take Questions Nos. 33 and 34 together.
The Deputy may wish to note that Section 42 of the Criminal Justice (Terrorist Offences) Act 2005 enables the Minister of Finance to make regulations for enabling provisions of acts to which this section applies to have full effect. This section of the 2005 Act applies solely to acts that are adopted by the EU, and that, in the opinion of the Minister for Finance, are for the purpose of, or will contribute to, combating terrorism through the adoption of specific restrictive measures, directed at persons, groups or entities, for the identification, detection, freezing or seizure of their assets of any kind.
As Minister for Finance, I frequently utilise the powers under Section 42, to give effect to penalties for breaches of EU restrictive measures in relation to two specific EU restrictive measures regimes, the ISIL / Al-Qaida regime under Council Regulation (EC) 881/2002, and the Combating Terrorism regime under Council Regulation (EC) 2580/2001. To date in 2024, I have implemented four statutory instruments utilising the powers provided under Section 42 of the Criminal Justice (Terrorist Offences) Act to activate the penalties for new EU restrictive measures introduced under the regimes listed above.
Rather than imposing sanctions regimes unilaterally, Ireland applies sanctions that are adopted by the United Nations Security Council or by the European Union (EU). In broad terms, issues relating to the functioning of the Internal Market and the Common Commercial Policy are matters of EU competence. In contrast, to the extent to which Member States retain competence in areas such as entry of third country nationals into their territory and the import and export of arms, there can be greater scope for Member States to consider adopting national measures.
Sanctions are an important tool to promote the objectives of the EU’s Common Foreign and Security Policy (CFSP). EU sanctions are always targeted, and seek to bring about a change in the policy or behaviour of the target of the measures. Sanctions measures can cover a wide variety of elements such as asset freezes, visa and travel bans and trade restrictions.
Sanctions in areas that fall under EU competence are implemented in EU Regulations, which are directly applicable in all Member States. These regulations typically deal with matters such as trade restrictions or the freezing of assets of individuals or legal entities. In order to criminalise any breach of the Regulations as a matter of Irish law, statutory instruments are made which provide that any person who contravenes certain provisions of a regulation will be guilty of an offence and liable to prosecution.
35. Deputy Jim O'Callaghan asked the Minister for Finance his response to the recommendations relevant to his Department of the Joint Oireachtas Committee on Budgetary Oversight’s ‘Examination of the Commission on Taxation and Welfare Report’; and if he will make a statement on the matter. [27409/24]
Amharc ar fhreagraThe Committee on Budgetary Oversight published its report examining the Report of the Commission on Taxation and Welfare in September 2023. The committee’s report makes 40 recommendations that further build on some of the issues dealt with by the Commission’s report.
The Commission’s report sets out that the recommendations are not intended to be implemented all at once, but rather provide a clear direction of travel for this and future Governments around how the sustainability of the taxation and welfare systems may be improved in a fair and equitable manner. Many of its recommendations will need further consideration and research and the committee’s report represents useful progress in that regard.
This Government clearly recognises that many of the recommendations contained in the report are challenging, particularly in this current environment, however that should not take away from this important work which is focused on the longer term and will contribute to debates on the optimal balance of taxation for many years to come. While the recommendations are aimed at the medium to longer term, my Department has already taken a number of actions.
For example, my Department conducted a review of Ireland’s personal tax system which was published with Budget 2024. In addition, as recommended by the Commission, my Department is conducting a wide-ranging review of the funds sector under the broad and interlinked themes of “Open Markets, Resilient Markets and Developing Markets”. A public consultation has been completed and a wide range of research, analysis and stakeholder engagement has been undertaken.
Regarding tax equity and base broadening, I note that the committee broadly agrees with the Commission’s proposals to broaden the tax base.
In relation to capital taxes, my Department remains cognisant of the potential impact of any proposed capital tax measures on the property market, including any possible distortionary effects on the market’s function.
The committee has made recommendations on retirement savings, my Department and Revenue are working with the Department of Social Protection to prepare legislative provisions governing the taxation treatment of Auto Enrolment savings, and the committee’s recommendations will feed into that work.
The committee has made observations on a Site Value Tax on land not currently taxed under the Local Property Tax (LPT) regime. There are a number of factors to be considered and as noted by both the committee and the Commission report, the introduction of such a regime will be complex and challenging.
In relation to supporting enterprise and in particular small and medium enterprises (SMEs), the Finance (No. 2) Act 2023 implemented a number of enhancements to the Employment Investment Incentive (EII). A review of this incentive is currently underway. That Act increased the rate of the R&D tax credit from 25 percent to 30 percent, maintaining the net benefit of the credit for large corporates in scope of Pillar Two and providing a real increase in support for SME companies. It also provided for a new capital gains tax relief for angel investors.
The current policy approach to carbon tax involves a long term multi annual trajectory of increases leading to a rate of €100 per tonne of carbon dioxide emitted in 2030. Budgetary publications clearly signpost the carbon tax rate changes and related impacts such as estimated yields and the specific allocation of funds arising from the increase for expenditure measures.
My Department is focused on and committed to improving how Tax Expenditures are reported and evaluated. Officials have been working closely with Revenue to implement recommendations in this area. Progress is being made in my Department on evaluating and reviewing tax expenditures and updated Guidelines on Tax Expenditures will be published by my Department in the coming months.
Both the Commission’s report and the committee’s report stress the need to plan for the future challenges facing Ireland. It is important to note that in addition to the annual budgetary cycle that going forward, EU Member States will be required to prepare and submit medium-term structural-fiscal plans to the European Commission under a new economic governance framework. Ireland will publish its first medium-term structural-fiscal plan in the autumn.
36. Deputy Cathal Crowe asked the Minister for Finance if he will consider changing current taxation rules which are overly burdensome on individual investors who are seeking to grow their savings and plan for the future (details supplied); and if he will make a statement on the matter. [27487/24]
Amharc ar fhreagraI note the Deputy's query in relation to the taxation of individuals savings and investments and whether any changes are being considered in this regard. As with all areas of tax policy, the taxation of savings and investments will be kept under review throughout the annual budgetary and Finance Bill process.
As regards the Deputy's comments in relation to individual savings schemes. The Deputy will be aware that the UK have individual savings account (ISA) schemes in place, which allows for savings and investments free from UK tax. The introduction of a new financial services product in Ireland on the lines of the UK ISA or the TFSA in Canada would need to be considered in the wider policy context. The introduction of a similar type scheme would need to comply with EU financial services legislative and regulatory requirements and the tax implications would be determined by the structure of such a scheme.
Last year, on 6 April 2023, I published the Terms of Reference for a review of Ireland’s funds sector - ‘Funds Sector 2030: A Framework for Open, Resilient & Developing Markets’. The review is wide ranging and looking at a range of issues relevant to the funds sector, taking into account the recommendations in this area of the Commission on Taxation and Welfare 2022 report, Foundations for the Future.
In that context, one area being considered by the review is the taxation regime for funds, life assurance policies and other related investment products; with the goal of simplification and harmonisation where possible. A public consultation was held from 21 June 2023 to 15 September 2023 and the review is now well advanced.
A progress update was subsequently published on 21 December 2023. The progress update highlighted the main trends, risks, challenges and opportunities facing the funds industry in Ireland out to 2030, as identified in the responses. Based on the data available, Irish savers and investors do not invest in as broad a range of products as in many other Member States. However, there are many reasons for this including taxation. The progress update also summarises proposals made in submissions in relation to the taxation of Exchange Traded Funds and for a tax-free/tax-advantaged retail savings and investment product. As per the terms of reference, the Review team will report to me this Summer and I look forward to considering its findings at that point. On that basis it would not be appropriate to presuppose any outcomes of the review at this time.
Additional information on the taxation of ETFs
An ETF is an investment fund that is traded on a regulated stock exchange. A typical ETF can be compared to a tracker fund in that it will seek to replicate a particular index.
ETFs, being collective investment funds, generally come within the regimes set out in the Taxes Consolidation Act 1997 for such funds. The domicile of the ETF will generally determine the applicable fund regime, specifically whether the ETF falls within the domestic fund regime or the offshore fund regime.
Where the domestic fund regime applies, a ‘gross roll-up’ applies such that there is no annual tax on income or gains arising to a fund but the fund has responsibility to deduct an exit tax in respect of payments made to certain unit holders in that fund. To prevent indefinite or long-term deferral of this exit tax, a disposal is deemed to occur every 8 years. Where the offshore fund regime applies, the applicable tax treatment depends on the location and nature of the fund.
Income and gains arising from investments into Irish and EU domiciled ETFs are subject to income tax at a rate of 41% on a self-assessment basis. Such income and gains are not subject to Pay Related Social Insurance (PRSI) or Universal Social Charge (USC) liabilities. This charge to tax does not apply in the case of unit holders who are non-resident. In the case of non-resident investors, liability to tax on gains from the fund will be determined in their home jurisdiction.
To assist taxpayers in determining the appropriate tax treatment for investments in ETFs, Revenue has published guidance which is available at: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-27/27-01a-03.pdf .
37. Deputy Michael Healy-Rae asked the Minister for Finance if the 9% VAT rate will be reinstated for the hospitality sector (details supplied); and if he will make a statement on the matter. [27500/24]
Amharc ar fhreagraAs the Deputy will be aware, the 9 per cent VAT rate was applied on a temporary basis to the hospitality and tourism sectors until 31 August 2023 when it reverted to the 13.5 per cent rate. The 9 per cent rate was introduced on 1 November 2020 in recognition of the fact that the tourism and hospitality sectors were among those most impacted by the public health restrictions put in place throughout the pandemic.
The economic rationale for a VAT rate reduction at that time, as it was in 2011 when it was also reduced to 9 per cent, was to lower consumer prices, encouraging higher demand, more output and an increase in employment.
Despite facing numerous successive headwinds over recent years, the domestic economy has proven to be remarkably resilient. Looking ahead, as inflation eases, the real disposable income of households should recover and support consumer spending. As a result, households are on a stronger financial footing and this will support demand for contact-intensive services including the tourism and hospitality sectors.
In relation to employment, between the end of 2020 when the 9 per cent rate was re-introduced, and the final quarter of 2023, total economy-wide employment expanded from 2.3 million to reach a record high of 2.71 million, an increase of over 17 per cent. The Q4 2023 Labour Force Survey indicated that employment in the accommodation and food service sector stood at 183,000.
It is noteworthy that 14 EU countries have a VAT rate of 12 per cent or higher on food services. Our nearest neighbour Great Britain and Northern Ireland has a VAT rate of 20 per cent on food services.
It is important to remember that VAT reductions, even temporary VAT reductions, have a cost to the Exchequer. The estimated cost of the 9 per cent VAT rate for tourism and hospitality, from 1 November 2020 to 31 August 2023, was €1.2 billion. This represented a very substantial support by the Government to the hospitality and tourism related sectors.
The cost of a further temporary VAT reduction to 9 per cent for a full year is estimated to be €764 million. Even where the measure is restricted to food and catering services, the estimated full year cost is €545 million.
The Government wants to maintain a healthy and profitable environment for these sectors going forward. However, in making any decision in relation to VAT rates or other taxation measures, the Government must balance the costs of the measures in question against their impact and the overall budgetary framework.
The Deputy will also be aware that, on 5 February, I announced changes to the tax debt warehousing scheme including a reduction in the interest rate on warehoused debt to 0 per cent which, amongst other sectors, will assist businesses in the tourism and hospitality sectors.
The Government has provided significant support to business throughout the period of increasing costs and Budget 2024 contained a number of measures which will support businesses facing increased costs, including the Increased Cost of Business (ICOB) grant, which aims to provide financial support to small and medium sized businesses who operate from a rateable premises, at a cost of €257 million. The grant will be at a rate of half an enterprise’s commercial rates bill, for 2023, for firms paying up to €10,000 in rates. A flat €5,000 grant will be available to firms who pay between €10,000 and €30,000 in rates.
Broader supports for SMEs which were announced in Budget 2024 include the extension of the 9% VAT rate on gas and electricity from end-October 2023 to end-October 2024.
In addition, the Deputy may have noted the wide range of measures brought forward by my colleague, the Minister for Enterprise, Trade and Employment, announced on 15 May. Details of these measures can be found at the following link:
https://enterprise.gov.ie/en/news-and-events/department-news/2024/may/202405151.html
Finally, the Deputy should note that any decisions about VAT rates for this area is a matter for consideration as part of the Budget 2025 process.
38. Deputy Catherine Connolly asked the Minister for Finance the options available to a person under the new guidelines for self-employed persons to allow for recognition as a self-employed sole trader without the necessity to register as a limited company; and if he will make a statement on the matter. [27505/24]
Amharc ar fhreagra39. Deputy Catherine Connolly asked the Minister for Finance to provide details of the review undertaken in advance of the publication of the new guidelines for self-employed persons which obliges a sole trader to register as a limited company in order to be recognised as self-employed; and if he will make a statement on the matter. [27506/24]
Amharc ar fhreagra40. Deputy Catherine Connolly asked the Minister for Finance the options available to a person (details supplied); and if he will make a statement on the matter. [27507/24]
Amharc ar fhreagraI propose to take Questions Nos. 38, 39 and 40 together.
Where an individual is engaged under a contract of service, i.e. as an employee, he or she is taxable under Schedule E, and income tax, USC and PRSI is deducted from their employment income through their employer’s payroll system on or before when a payment is made (the PAYE system). For the avoidance of doubt, “office holders” (e.g. Company Directors) are always subject to PAYE.
Where an individual is engaged under a contract for service, i.e. as a self-employed individual taxable under Schedule D, they will generally be obliged to register for self-assessment, to pay preliminary tax and file their own income tax returns using the Revenue Online Service (ROS).
Each business making payments to individuals is obliged to correctly determine whether individuals are employed or self-employed based on the facts and circumstances of each relationship and payment. There is no single, clear legal definition of the terms “employed” or “self-employed” in Irish or EU law.
On 20 October 2023, in a unanimous decision, the Supreme Court delivered an important judgment on the key factors to be considered when classifying an individual’s employment status for income tax purposes. The detailed judgment was delivered by Mr. Justice Brian Murray in The Revenue Commissioners v. Karshan (Midlands) Ltd. t/a Domino’s Pizza. The case was concerned with whether the delivery drivers were independent contractors under a “contract for service” and taxable under Schedule D of the Taxes Consolidation Act 1997, or employees under a “contract of service”, and taxable under Schedule E of that Act (PAYE).
The judgment provides an extensive review of relevant case law, and succinctly summarises it through the provision of a five-step decision-making framework. The decision-making framework consists of five questions that is to be used to resolve the question of whether a contract is one of service (employee) or for service (self-employed).
On the same day, Revenue issued a press release which encouraged any business which engages contractors, sub-contractors or other workers on a self-employment basis, i.e., where that worker is not treated as an employee of the business for income tax purposes, to review the nature of any such arrangement(s) in light of this judgment.
While the judgment related to companies engaging individuals as delivery drivers, as a decision of the Supreme Court, it has application across all sectors. Revenue, in carrying out its statutory function, is obliged to apply the judgment.
The Deputy poses questions about individuals incorporating as limited companies and obligations in relation to this arising from the judgment. It is important to note that the judgment applies to the tax implications for businesses who engage individuals and whether such individuals are to be treated as self-employed or employees. The judgment does not apply to businesses that engage companies to carry out work.
The decision of a business as to whether it wishes to engage an individual or a corporate is a commercial decision. If a business engages a corporate entity, the judgment is not relevant, as a company will never be an employee for tax purposes. If however, the business decides to engage an individual, it must apply the five-step framework from the judgment to determine whether or not that individual is to be treated as an employee for tax purposes. In the same way, it is for an individual who is supplying services to a business to decide whether he or she wants to operate as an individual or operate through a corporate structure.
I am advised by Revenue that its treatment of services supplied through a companies, for example Personal Services Company, or a Managed Services Company, which are common structures through which contracting services are supplied, has not changed. Revenue does not “look through” corporate structures, except in very limited circumstances specifically provided for in the Taxes Consolidation Act 1997.
To assist taxpayers in understanding their tax obligations, Revenue publishes detailed guidance on many topics, on its website and in the various Tax and Duty Manuals (TDMs). Revenue developed a detailed TDM, to outline its position in relation to the application of the judgment and to assist businesses who engage individuals to carry out work.
Prior to the publication of relevant TDM, Revenue sought input from across Government and relevant external stakeholders to seek feedback on the development of the draft manual. A copy of the draft was shared with 13 key external stakeholders, including professional representative bodies, trade unions, employer bodes and representative bodies from specific sectors. Feedback from the stakeholders, where appropriate, was incorporated into the final draft.
The TDM (Part 05-01-30) was published on 21 May 2024 and is available on the Revenue website at the following link: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-01-30.pdf
The detailed TDM runs to 58 pages and contains 19 examples, based on real cases. The key message in the TDM is that in determining whether an individual is self-employed or an employee, the business (entity engaging the person) must apply the five-step framework by references to the facts and circumstances on the individual case.
It is for the business who engages the person to make the determination. It is not a matter of choice, either for the business, or the individual. Businesses are free to disagree with elements of the TDM and self-assess based on the facts and circumstances of their own case. Revenue will then, in the normal way, look at cases based on risk and make assessments or amended assessments where appropriate and a right of appeal will exist, which may lead to future litigation in this area.
In relation to the specific case the Deputy refers to, it appears that the individual is being engaged by a number of businesses to carry out various functions. It is for those businesses to apply the five-step framework determine whether or not the individual is an employee. The TDM represents Revenue guidance and has not imposed this approach, it has always been a matter for the business engaging the individual to determine whether that individual is an employee for tax purposes, which determines whether that business is obliged to operate PAYE. The Supreme Court has confirmed how such a determination is to be made and each business will make a decision in relation to each engagement and operate accordingly on a self-assessment basis. It is also a matter for such businesses to decide if they wish to change their business model and only engage companies to carry out work, as opposed to individuals.
41. Deputy Rose Conway-Walsh asked the Minister for Finance the estimated revenue that would be generated from applying a 1.2% levy on revenues of energy company, as has been introduced in Spain; and if he will make a statement on the matter. [27627/24]
Amharc ar fhreagraAs a small open economy, connected to Europe, the US and the wider world, Ireland is committed to a competitive, transparent and stable corporation tax system. As the Deputy will be aware, the trading profits of companies in Ireland are generally taxed at the standard corporation tax rate of 12.5%, and under the Pillar Two Minimum Tax Directive the effective rate has increased to 15% for in-scope companies.
Imposing additional taxes or levies on certain sectors would involve increased complexity and could change the attractiveness of Ireland's corporate tax regime. While it is possible that imposing an additional fiscal burden could lead to theoretical gains, there is a risk that this imposition could lead to lower levels of economic activity and to companies passing the additional burden onto their suppliers or consumers.
In relation to introducing a levy on energy companies, a number of factors would need to be considered. Firstly, there is the potential of higher prices for energy consumers who have only recently seen very welcome reductions from previous historic highs, this being at a time of significant cost of living pressures. The proposed levy could also have a negative impact on employment levels in energy companies if cost-cutting measures are introduced in response. Finally, the proposed levy could reduce competition in a sector that has previously seen the departure of a number of energy providers.
The Deputy may be aware that, outside of corporation tax on energy company profits, there are a number of taxes already applied to energy products in Ireland, including the Mineral Oil Tax, carbon tax, electricity tax and VAT. There are also certain levies on some energy products and these are under the remit of the Minister for the Environment, Climate and Communications.
Finally, the Deputy will be aware that, arising from an EU Regulation introduced in late 2022 to alleviate pressure then affecting energy consumers due to, among other factors the war in Ukraine, two revenue raising measures were introduced for years 2022 and 2023. Firstly, a Temporary Solidarity Contribution (TSC) was levied on Irish fossil fuel producers for years 2022 and 2023. Secondly, an electricity market price cap was placed at varying levels on the market revenues of electricity providers located here. Both of these measures are under the remit of the Minister for the Environment, Climate and Communications.
For these reasons I don’t propose to introduce a levy on energy companies in the terms set out.
42. Deputy Eoin Ó Broin asked the Minister for Public Expenditure, National Development Plan Delivery and Reform the current status of Castletown House Estate, County Kildare; when the OPW will return to the site to undertake maintenance and upkeep given the house and grounds are extremely unkempt, having been without attention for a number of months; and if he will make a statement on the matter. [27342/24]
Amharc ar fhreagraAt present Castletown is being maintained as far as is possible in the circumstances, by a reduced staff. Castletown staff have withdrawn from the site on instruction from their union. The union has informed the OPW that staff will not return until they can access their place of work normally and safely. The OPW is engaged in a process of consultation with local groups and elected representatives through the Castletown working group, in order to restore staff access to the site. It is hoped that a resolution of the issue of access can be reached as quickly as possible and the work of maintenance and upkeep of the site can continue.
43. Deputy Thomas Gould asked the Minister for Public Expenditure, National Development Plan Delivery and Reform for an update on the Glanmire flood relief scheme. [27405/24]
Amharc ar fhreagraThe Office of Public Works (OPW) in partnership with Cork City Council are engaging proactively to progress the Glashaboy (Sallybrook/Glanmire) Flood Relief Scheme for Glanmire.
The Glashaboy Flood Relief Scheme includes the construction of new walls and earthen embankments, upgrades to existing culverts, the replacement of an existing bridge with a reinforced bridge at Hazelwood Shopping Centre, clearance of bridge eyes at Riverstown Bridge, channel widening, road re-grading and associated drainage works. The scheme, when complete, will provide flood protection to some 103 properties; 78 residential properties and 25 commercial premises, and will address the flood risk in a number of locations in the Glanmire area. The proposed scheme is designed to provide protection against a 1 in 100-Year fluvial flood.
The Glashaboy Flood Relief Scheme was confirmed in January 2021 by the Minister for Public Expenditure, National Development Plan Delivery and Reform under the Arterial Drainage Acts 1945 to 1995. The scheme is being funded from the €1.3 billion in flood relief measures under the Government’s National Development Plan.
In June 2023, following a successful tender competition, Cork City Council awarded the works contract to Sorensen Civil Engineering. In July 2023 Sorensen Civil Engineering mobilised to site carrying out site investigation works, working with utility providers to agree diversions, and engaged with stakeholders to facilitate works commencing at Cúil Chluthair and Springmount. The construction programme is anticipated to take 32 months (from commencement) with works divided into several zones to minimise disruption to the public and businesses.
Following the events of Storm Babet, interim flood relief measures were installed in Copper Valley Vue in December 2023 to help protect homes until the flood defence scheme is fully completed. Permanent works have recently commenced in this area, with instream works due to begin at the start of July 2024 on the replacement of three structures on the Glenmore Stream. Consultation is ongoing with Inland Fisheries Ireland in relation to the instream works, which will continue throughout construction.
Significant works are underway on the R639, including the installation of a new culvert at Cois na Gleann and the construction of flood defence walls, as well as utility diversions. The R615 is currently closed to enable culvert installation, and the R639, which has had traffic restrictions for a number of weeks, is due to reopen in the coming days. Works will continue over the summer months on Hazelwood junction and will commence on Hazelwood Bridge. Flood defence measures, including a pumping station and storm-water network are under construction in Meadowbrook Estate. Works are also ongoing in Sallybrook, including the construction of a flood defence embankment.
44. Deputy Cathal Crowe asked the Minister for Enterprise, Trade and Employment when he expects to act on the Low Pay Commission recommendation that sub-minimum youth rates of the national minimum wage be abolished; if he will also take into account some of the financial hardships (details supplied) that are currently being faced by business owners in the retail and hospitality sectors; and if he will make a statement on the matter. [27488/24]
Amharc ar fhreagraIn 2022, the Low Pay Commission was asked to examine the issues around retaining or removing the sub-minimum youth rates of the National Minimum Wage and to make recommendations on the subject.
The Low Pay Commission’s report on these sub-minimum rates was published earlier this month.
The Low Pay Commission has recommended the removal of all sub-minimum youth rates of the National Minimum Wage.
The Commission highlighted in its report that this is a complex issue. They have said Government will need to give their findings and recommendations detailed consideration and deliberation, and they highlighted the need for further legal advice and consultation.
I have committed to commissioning an economic impact assessment of the recommendations. Terms of reference for this study are being considered.
The use of sub-minimum youth rates is largely concentrated in the accommodation, food, and retail sectors. I know that these are sectors that have reported facing considerable cost pressures.
The economic impact assessment will model the impact of making changes to youth rates on firms of different sizes and in different sectors. It will also consider the likely changes to the National Minimum Wage given the Government’s decision to progress to a National Living Wage set at 60 per cent of the median wage.
I will also seek legal advice on the recommendations of the Commission’s report.
The Low Pay Commission’s report acknowledged that workers aged under 18 have legal restrictions on the work they may do. This point will be further considered in the aforementioned request for legal advice.
Government will make a decision on this important issue when all this information is available to us.
I have already confirmed that any Government decisions on the Commission’s recommendations will be made with recourse to the SME test, which was a key element of my 15-point business supports package.
45. Deputy Robert Troy asked the Minister for Education if she will expedite a request for a modular build ASD class for a school (details supplied). [27306/24]
Amharc ar fhreagraI can confirm to the Deputy, that my Department has recently received an application for the Additional School Accommodation (ASA) scheme, from the school in question.
The purpose of my Department’s Additional School Accommodation (or ASA) scheme is to ensure that essential mainstream classroom accommodation and accommodation for pupils with special education needs is available to cater for pupils enrolled each year, where the need cannot be met by the school’s existing accommodation.
At primary level, this situation generally arises to cater for a school’s accommodation requirements where an additional teaching post has been sanctioned by Teacher Allocation Section, or the requirement for a new class for pupils with special education needs has been identified by the NCSE, and all available alternative accommodation within the school is already being used for classroom purposes.
The application is currently being assessed by my officials who have requested additional information from the school. Once this information has been returned, a decision will issue to the school authorities directly upon completion of the assessment process
