Pádraig Ó Céidigh (Independent) | Oireachtas source

I wish to ask a generic question in the finance area. One part relates to VAT. I am particularly interested in VAT for SMEs. At the moment if a company registered for VAT in Ireland acquires a service or goods from the UK, no VAT is charged coming or going. My understanding from the proposed legislation - I am glad Senator Norris raised this - is that now there is a VAT liability on companies in Ireland that acquire services or goods from VAT-rateable companies in the UK, which adds a significant tax burden for them. Is the Minister of State in a position to clarify that?

The second issue relates to Part 10, section 72, and the Road Transport Act. We all have difficulty with the intricacies of the legislation and its technical aspect. It would take weeks to get through it and understand it because it refers back to sections and subsections of various other Acts, making it very difficult for us in a short timeframe. Having said that, I have nothing but praise from the Minister of State, his Government colleagues and the civil servants who spent ages working on getting this legislation to its present state. It is a significant compliment to the Minister of State and his Government colleagues.

My first question was on VAT. Part 10, section 72 deals with the Road Transport Act 1978. We have a big issue here and this legislation could make it worse. A private bus company is outside the VAT net and cannot claim back VAT on parts, spares, maintenance, etc. However, a UK company, including one based in Northern Ireland, can claim back VAT on various expenses. If the bus company is - I am subject to correction on this terminology - wholly and exclusively for the purpose of tourism, it can claim back the VAT. We need to try to ensure that in a worst-case scenario small bus companies and other small businesses that are importing from the UK are not more disadvantaged than at present.