Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I move amendment No. 63:

In page 57, after line 32, to insert the following:“VAT treatment in respect of children’s footwear and clothes

58. The Minister shall within six months of the passing of this Act, prepare and lay before the Oireachtas a report examining the options for reviewing, in respect of children’s footwear and clothes, the size limits that are currently zero rated for VAT purposes subject to our obligations under EU law.”.

This relates to the application of VAT to children's footwear and clothing, which was discussed on Committee Stage. The purpose of raising it again is to refine and clarify the commitment that we have been given.

Children's footwear and clothing are zero rated, but only up to certain size thresholds that were set in 1984. Current Revenue practice in respect of the footwear threshold is up to and including size 5.5 and, in respect of clothing, up to and including a 32 in. chest or a 26 in. waist. The position appears to be that, under the EU VAT directive, the ten years of age cut-off point cannot be changed. This may be an interpretation of the directive, but the Department's position is that it cannot change. However, what can change - if there is evidence - is the average shoe and clothing sizes of ten year olds. These sizes were last considered in 1984, presumably in consultation with the industry and so on.

I raise this issue because, as every parent knows, the difference in the price of footwear between sizes 5.5 and 6 or 7 is not just down to VAT. The difference is significant. A size 5.5 runner might be €40 whereas a size 6 runner might be €70. VAT does not explain the difference.

This is an important issue for families. Will Revenue commit to engaging with stakeholders to examine whether there is a basis for revising the average sizes of footwear and clothing for a ten year old? That is my essential request and is what I would like to have done.

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