Ms Cora O'Brien:

I will answer a few of the queries and will commence by answering the last query on interest. We look at the UK regime where interest is pegged. I refer to instances where somebody has underpaid his or her tax. He or she might be in tax arrears, made a mistake or are involved in a settlement with Revenue but he or she has not paid his or her tax on time. The penalties are parked. In the UK penalties are charged for careless mistakes or deliberate error. The penalties imposed are for a fixed amount and are almost like a fine. The interest is really a charge for the fact that one has not paid the money on time. In the UK the interest rate is pegged to the base interest rate of the Bank of England. I think the rate is half a per cent above what pertains in the UK and I can confirm that aspect later. The end effect for the UK taxpayer is that he or she pays 2.75% as the cost of not having paid his or her tax on time. It does not matter whether it is VAT, payroll taxes or income tax because all of them are treated the same.

In Ireland, an interest rate of 10% is charged for the fiduciary taxes of VAT and payroll and 8% is charged for other direct taxes. Every year for the past seven or eight years the Irish Tax Institute has asked for this matter to be considered because we do not think it is fair on taxpayers. Yes, they should have to pay interest if they have underpaid their tax but not at such a high rate. We think the interest rates applied are penal rates and taxpayers must pay penalties on top of that.