Written answers

Wednesday, 9 November 2005

8:00 pm

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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Question 128: To ask the Minister for Finance the steps he has taken to ensure that schools do not abuse the tax relief for eligible charities scheme when requesting the payment of voluntary contributions by parents; and if he will make a statement on the matter. [27656/05]

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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The provisions of section 848A of the Taxes Consolidation Act 1997 govern the operation of the scheme for tax relief on donations to eligible charities and other approved bodies. The administration of those provisions is the responsibility of the Revenue Commissioners.

I am informed by the Revenue Commissioners that primary and secondary schools qualify as approved bodies under the donations scheme once the education being provided is based on a programme prescribed or approved by the Minister for Education and Science.

Voluntary contributions by parents to schools can qualify as a relevant donation for tax relief purposes under the scheme once the contribution amounts to at least €250 in a tax year and meets the conditions set out in section 848A. One such condition is that neither the donor nor any person connected with the donor receives a benefit, either directly or indirectly, as a consequence of making the donation. Accordingly, a voluntary contribution in exchange for education being provided to the donor's child would not be regarded as genuinely voluntary and would not qualify for tax relief.

When the scheme was introduced in 2001 Revenue wrote to each primary and secondary school registered with the Department of Education and Science advising them of this new donations scheme and, in particular, of the conditions attaching to donations. Earlier this year, arising from certain concerns, the Revenue Commissioners specifically reminded each of some 90 fee-paying primary and secondary schools that school fees or contributions substituting for school fees did not qualify as eligible donations under the scheme. Contact has also taken place between Revenue and the Department of Education and Science on relevant issues associated with the overall operation of the scheme.

The Revenue Commissioners advise me that in 2004, 61 schools out of a total of over 4,000 registered with the Department of Education and Science lodged refund claims in respect of donations by individual PAYE donors. I have also been advised by the Revenue Commissioners that they implement controls and monitoring procedures in relation to the operation of the donations scheme in an appropriate and balanced way, commensurate with the risk to the Exchequer.

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