Mr. John Field:

On the sabbatical expenses, as I identified earlier, the Revenue Commissioners had issued guidance on the treatment of round sum payments. The process that we had in place was that round sum payments were paid monthly. The revised process that we agreed was that we would have regard to the Department of Finance circular on per diemrates for foreign countries and work out the period of time during which the person is in the country. We went back and looked at every sabbatical and worked out the length of time that people had spent outside of the country. We recalculated the amount of expenses that they would have received in accordance with the new methodology that we had agreed, which we had confirmed with Revenue was compliant with taxation rules. We went back and looked at four years of sabbaticals.

We identified cases where the level of expenses we had paid would have worked out differently under the revised methodology, so we treated the difference as pay and deducted tax on that as though it was salary rather than expenses. It did not relate to benefit-in-kind or travel expenses for spouses etc. Salaries were reduced when people went on a sabbatical and the effect of this was to bring their salary up a little bit. We then treated a portion of what we had paid them as a round sum amount as salary, rather than expenses.