Mr. Niall Cody:

The Deputy has raised a very interesting point on the use of corporate structures in the area of employment, self-employment and subcontracting. One of the trends that has evolved over the past ten or 15 years is the use of corporate structures. Two formats are used. There are personal service companies, which generally involve one individual and he incorporates his business. Therefore, it would be Niall Cody Limited that provides services to a principal contractor. Then there are what are called managed service companies, MSCs, which generally involve five directors, sometimes not linked to each other, sometimes providing a kind of service to different principal contractors, generally facilitated through a professional services firm that specialises in these types of structures.

We know that in certain sectors there are international dimensions to some of those because there are employment agencies that are used by some of the sectors. That happens throughout the contracting process. The personal service companies, PSCs, and MSCs are fairly common in the area of ICT. There is some of it in the construction sector and some of it in the meat sector. It is in pharma and throughout the media. It has probably replaced a lot of the self-employment.

The Comptroller and Auditor General will remember that he did a review of our national contractors project in the report for 2014 where we carried out a fairly extensive inquiry into the practices of PSCs and MSCs in relation to expenses. We had significant publications and settlements of cases where the structures were used and in the use of the structures the whole ratio of expenses were manipulated. Some of them involved the use of family members as employees of their own company. We recovered significant moneys on the tax risks in relation to PSCs and MSCs. Irish legislation does not have a provision to look through the corporate structure which has been a trend in some other companies. We paid close attention to that subcontracting use in corporate structures and have had some-----