Mr. Joe O'Connor:

I thank the Chairman and the committee for the invitation. On behalf of Fórsa trade union, I will read our statement on this issue and then I will hand over to Ms Clarke and Mr. King, who are two members of our union from Mayo and Kildare, to summarise this issue.

The amalgamation to create Fórsa trade union came into effect on 2 January 2018, bringing together the 80,000 members of the former Irish Municipal, Public and Civil Trade Union, IMPACT, Public Service Executive Union, PSEU and Civil and Public Services Union, CPSU, unions to form the largest public service union in the State. We represent working people in the health service, the Civil Service, local authorities, the education sector, the community and voluntary sector, State and semi-State agencies, commercial services as well as private companies such as in aviation and telecommunications.

Although our union has been invited to present to the committee today on this issue, it is important to note that this campaign has been formally supported by the Irish Congress of Trade Unions, ICTU, as well as many individual unions, including the Services, Industrial, Professional and Technical Union, SIPTU, the Irish Nurses and Midwives Organisation, INMO, the Irish National Teachers' Organisation, INTO, the Irish Federation of University Teachers, IFUT and the Financial Services Union.

In 2001, in recognition of the key role trade unions play in Ireland in delivering economic and social cohesion for wider society and fair play for workers, the then Minister for Finance, Charlie McCreevy, introduced a flat rate tax relief on trade union subscriptions of £100 per year at the standard rate of tax. The introduction of this tax relief was only starting to bring union members into line with the position of those paying fees to professional bodies, who had long enjoyed full tax relief on their subscriptions at the marginal rate of tax. To more accurately reflect the cost in real terms of trade union membership, this relief was increased incrementally between 2001 and 2008, when it was €350 at the standard rate of tax. In effect, this was a tax credit of €70 for all trade union members in the country.

In budget 2011, the then Minister for Finance, Brian Lenihan, announced that he intended to abolish the tax reliefs on trade union subscriptions, as well as those to professional bodies. This was part of a review of all tax reliefs as part of the Government’s response to the economic crisis. Indeed, because of the very fact of that crisis, the trade union movement did not campaign on this matter. However, when the Finance Bill 2011 was published, it became very clear that while the tax relief on union subscriptions was to be abolished, the tax relief on subscriptions to professional bodies was not. This followed a sustained lobbying campaign after the budget by professional bodies and business organisations such as Irish Business and Employers' Confederation, IBEC, the Association of Chartered Certified Accountants, ACCA, the Institute of Banking, the Institute of Directors in Ireland, the Marketing Institute of Ireland and the Professional Insurance Brokers Association, among many others.

Instead, the then Minister decided to abolish the benefit-in-kind, BIK, exemption that allowed employers to pay the annual membership fee of a professional body where membership of that body by a director or employee was relevant to the business of the employer. This was a different decision than the original and was not the same as abolishing the tax relief on subscriptions to professional bodies generally. This proposal only applied to directors and employees but not to the self-employed.

Following the lobbying campaign, the decision to abolish the BIK exemption on subscriptions to professional bodies led to Revenue issuing a clarification as to how it would interpret the Finance Act 2011, the net result of which I will now outline.

Tax relief on expenses paid by the self-employed, including membership of professional bodies, continues as before and is granted at the individual's marginal tax rate. This also exempts income from the USC and PRSI. Professional fees paid by employers on behalf of their employees to many professional bodies may continue to be paid tax free. Businesses can receive full relief on subscriptions to bodies such as IBEC and ISME. However, subscriptions paid by trade union members do not qualify for tax relief anymore. Even when they did, the relief was only at the standard rate while PRSI and other levies applied to those payments. This situation, which still applies today, is clearly discriminatory, given that the existence of a tax relief on trade union membership is as relevant to us as tax relief on membership is to professional bodies. In addition, there is no justification for denying tax relief on trade union subscriptions when the self-employed and members of some professional bodies have this facility.

What is particularly galling is that this discrimination goes further than just membership of professional bodies. The Irish Farmers Association, IFA, which is the largest representative body for Irish farmers, advises its members on the basis of professional advice it has received that farmers, as self-employed traders, can claim tax relief on their IFA subs as well as their subs to the Irish Farmers' Journalbecause those are beneficial to their trade. This clearly does not meet the test provided by Revenue's clarifications, which justified the retention of tax relief for professional body members but not for members of trade unions by outlining that there should be a requirement for a practising certificate or licence, a statutory requirement or an indispensable condition of employment. If tax relief for the self-employed, such as farmers, is granted to their respective membership organisations on the basis that it is beneficial to the trade, tax relief for the thousands of working people whose trade union membership brings about a clear and tangible benefit to their professions should surely receive equal and fair consideration for tax purposes. For example, the training provided by our union to our more than 8,000 members working as special needs assistants, SNAs, is invaluable to their work. Health and social care professionals represented by Fórsa have access to legal advice and representation through their union in the event of a fitness-to-practise case that would be financially inaccessible otherwise. This is in addition to the practical training supports in areas as varied as job evaluation, interview skills and public speaking provided to our members as well as our core services of professional representation and collective bargaining and negotiation.

It is clear that farmers, the self-employed and employees of certain professions can get tax relief for their subs while trade union members cannot. It is also worth pointing out that Ireland's position of not providing this relief to trade union members is out of step with the practice in many other countries. In Germany, a trade union membership fee is classified as a professional body fee and can be declared as a professional expense in a person's tax return. In Belgium and Holland, trade union members can get 50% of their union subs back in tax relief. In Norway, tax relief of €400 per annum is allowed for union subs and tax relief on union subscriptions applies in Australia and Canada. Many countries that we generally look to compare ourselves to recognise the importance of union membership to their societies and seek to create a level playing pitch in terms of tax relief for membership subs. Why does Ireland not do so, too?

The trade union movement had decided to hold off on pursuing this issue in recognition of the economic crisis that had hit the country. In the run up to budget 2016, however, and given the much more favourable economic circumstances, congress worked to have this discrimination and anomaly addressed. That budget contained a commitment to conduct a review of, and a public consultation on, the appropriate treatment of tax reliefs for membership fees of trade unions and professional bodies. This process was supposed to take place in 2016. Unfortunately, no public consultation ever took place. What actually happened was that the Department of Finance, without any public input, undertook a review of tax reliefs. Due to the Department's innate hostility to tax reliefs, that review unsurprisingly did not support the reinstatement of the tax relief on union subs. The Department concurred with the 2009 report of the Commission on Taxation, which recommended that the relief be discontinued on the basis that, since membership of a trade union was likely to be influenced by the benefits of membership, the value of a tax credit was unlikely to be a factor. We agree on that point. The trade union movement never pursued this matter on the basis that it would have any material effect on the levels of trade union membership, but because the existence of a tax relief on membership subscriptions was as relevant to trade union members as it was to professional bodies. We are seeking equity for our members.

Now that the economic crisis is over, the trade union movement is actively pursuing the restoration of the tax relief on union subscriptions and the ending of the obvious discrimination against union members compared with the position of self-employed people, members of certain professional organisations, farmers and businesses. Ireland is out of step on this issue with many of our friends and neighbours, who recognise in practical terms the important role that unions play in our societies. It is time for this discrimination to end and for tax relief on trade union membership to be restored.

We are seeking the committee's support on this issue in order to address the clear inequity and discrepancy created in 2011 in the taxation treatment of different groups in society. Nurses, SNAs and care workers should not be treated unfavourably in this manner compared with solicitors and accountants. The training, services and representation that are beneficial to the professional lives of many thousands of working people should not be held in less regard than similar benefits availed of by the self-employed through their membership organisations.

We are seeking the committee's support to put PAYE workers who are members of unions on an even keel with the self-employed and members of professional bodies as well as with their trade union compatriots in Australia, Canada and several European countries. Unlike those representing professional bodies, great restraint was shown by the trade union movement in Ireland on this issue in the teeth of the worst economic crisis to hit the country in generations. Reinstating this relief would be an important statement in recognition of the important role played by trade unions in Irish society and a small gesture to the members of trade unions who made significant sacrifices during the recent economic crash.

I will hand over to Mr. King and Ms Clarke, who would like to say a few words to conclude our opening statement.