Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

As the Deputy stated, this issue was discussed in the debate on last year's Finance Bill and relates to the application of the VAT zero rating that applies to children's clothing and footwear. Under Article 110 of the VAT directive, member states may retain the zero rates on goods and services that were in place on and from 1 January 1991 but cannot extend the zero rate to new goods and services after that date. As the Deputy is aware, the zero rate of VAT applies to clothing and shoes for children and this is possible under EU VAT law because the zero rate applied to these goods on and from 1 January 1991. It is not possible under EU VAT law to extend the application of the zero rate by raising the age limit of children to whom the zero rate could apply in respect of articles of clothing and footwear.

Since the mid-1980s, Irish VAT law has defined children’s clothing and footwear as that not exceeding the size appropriate to children of average build and foot size of ten years of age. This includes clothing described, labelled, marked or marketed as being for children under 11 years of age. The practical application of the measure to date is that zero rating applies to children’s clothing of sizes up to and including 32 in. chest, 26 in. waist or 152 cm height and children’s footwear up to and including size 5½ or 38. These sizes were determined in 1984 after consultation with clothing and footwear trade interests at both manufacturing and distribution levels and, at that time, were considered to be generous. A further review of the average size of footwear for children was carried out in 1997 but there was insufficient evidence at that time that would warrant a change in the 5½ limit.

Following last year’s debate, the Revenue Commissioners recently completed a review of the average shoe and clothing sizes for ten year olds. This review produced no evidence to support a change in the existing guidelines. Revenue approached a number of experts including in the ESRI as well as academics in the field of nutrition and children’s health. These experts told Revenue there was no data that would enable them to complete the study that Revenue was seeking. Revenue then reviewed information publicly available from a number of businesses, including the largest retailers in Ireland, on clothing sizes for ten year old children. All of these measurements, with one exception, indicated that the current clothing sizes for chest and waist were below the current published Revenue guidelines.

I would add that Revenue has not received any submissions or contacts from Deputies, businesses or representative bodies in this regard following the discussions last year. As matters stand, I have no basis on which to alter the guidelines but I remain prepared to do so if data becomes available that would support a change. I reiterate that Revenue would welcome submissions from interested parties in this regard. I hope the work we have done to date on this demonstrates to Deputy Michael McGrath that we have taken the matter seriously. We have no evidence to support the change and for that reason, I am not in a position to accept the amendment.