Seán Sherlock (Cork East, Labour)
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Question 167: To ask the Minister for Finance the tax or VAT concessions available to a person returning to the workforce as self-employed sole trader after being unemployed for over 12 months following redundancy; and if he will make a statement on the matter. [39667/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am informed by the Revenue Commissioners that, in relation to income tax, there is no specific relief or allowance available to a person returning to the workforce as a self-employed sole trader after being unemployed for over 12 months following redundancy. However, the rules governing the submission of tax returns provide a concession for new business in respect of the first tax year. In general, failure to submit a tax return for a year by 31 October in the following year will result in a surcharge being added to the final tax bill for the year. However, in the case of a new business, the surcharge will not be imposed if the return for the first tax year is made by the return filing date for the following tax year i.e. by 31 October in the second year after the year in which the sole trade started.

The rules governing the payment of preliminary tax can also facilitate start-up business in terms of cash flow. A person has the option of paying preliminary tax on 31 October in the tax year in which trade commences based on either (i) 90 per cent of the liability for the year or (ii) 100 per cent of the liability for the previous year, in order that interest charges will not apply. Where the person opts for the 100 per cent rule, the preliminary tax payment required for the first year can be nil where that person had no taxable income in the year prior to the year in which the trade started. Additionally, where the person wishes to pay preliminary tax in the first year of trade, the person can pay by way of direct debit monthly instalments. This facility is designed to spread the burden of payment throughout the tax year.

In so far as VAT is concerned, there are no concessions for a person who commences business as a sole trader following unemployment - the normal VAT rules apply. Where a person is supplying taxable goods or services and certain turnover thresholds (€37,500 for services and €75,000 for goods) are exceeded, or are likely to be exceeded, in any 12-month period, then, the person is obliged to register and account for VAT at the appropriate rate or rates on his or her supplies of taxable goods and services.

Leo Varadkar (Dublin West, Fine Gael)
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Question 168: To ask the Minister for Finance the income level at which a new 48% income tax rate would have to apply in order to raise €5 billion, €10 billion and €15 billion; and if he will make a statement on the matter. [39727/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I assume the Deputy is referring to the income level at which a third rate of income tax of 48% would have to apply in order to raise €5 billion, €10 billion and €15 billion. The position is that it would not be possible to raise yields in the order of magnitude the Deputy has outlined by introducing a third rate of income tax of 48% without restructuring the current rate band system. Alternatively, if the 41% rate in its current structure was increased to 48% it would yield in the region of €1.3 billion in a full year, estimated by reference to 2011 incomes. A third rate above this income level would raise even less. This figure is an estimate from the Revenue tax-forecasting model using actual data for the year 2008 adjusted as necessary for income and employment trends for the year 2011. It is therefore provisional and likely to be revised.