Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 230 to 232, inclusive, and 235 and 236 together.

In relation to Question No. 230 (Ref: 2245/15) and Question No. 231 (Ref:  2246/15), as I previously informed the Deputy in my response to Question No. 202 on 25 November last year, a Subcontractor will not generally describe him/herself as such when first registering for Income Tax with Revenue and this consequently limits the Revenue Commissioners ability to provide precise statistics on the annual amount of PRSI and USC paid in each year.

I am advised that all contractors in the construction sector, engaged under a relevant contract, are also required to register for Relevant Contracts Tax (RCT) some contractors though work outside the RCT system, for example, where there is no sub-contracting of work on a particular job. For those operating under a relevant contract, when registering for RCT, they declare themselves as Principal Contractors, Principal/Subcontractors which means that they can act as a principal on some contracts and a subcontractor on other contracts - or Subcontractors. Therefore, the details provided include all contractors who were registered as a Principal/Subcontractor or as a Subcontractor for any part of the years in question.

Furthermore, the details provided were compiled on the basis of contractors who were registered for RCT, not necessarily on whether they were active in that year within the RCT sector. In addition, for joint assessment cases, given the complexity involved in establishing which spouse is actively engaged in the RCT sector, only data on the assessable spouses PRSI and USC was extracted; therefore in joint assessment cases the non-assessable spouses PRSI and USC has been excluded.

As a result of the foregoing, the data set out in the following table are tentative and represent best estimates. The figures are based on declared PRSI and USC liabilities submitted by self-employed contractors (excluding companies) in their annual tax return and the most recent figures available are for the 2013 tax year.

Year	PRSI	USC
2008	€35,761,693	N/A
2009	€23,095,095	*N/A
2010	€18,201,182	*N/A
2011	€20,542,795	€29,429,853
2012	€19,716,784	€27,859,142
2013	€20,586,953	€28,204,585

*Income Levy data not available in the timeframe.

Regarding Question No. 235 (Ref: 2318/15), I am further advised that a Principal contractor has a statutory obligation to notify Revenue through the eRCT system of details of all contracts entered into with a subcontractor. On receipt of these contract details, the Contract Confirmation letter is generated and if the Subcontractor is registered for ROS, they will receive an electronic copy of the letter into their ROS Inbox immediately. In the vast majority of cases, the Subcontractor, or their agent, will be registered for ROS.

For the minority who receive the Contract Confirmation letter in paper form, these are printed and posted twice a week from Revenue's central dispatch centre and therefore the turnaround time is only a matter of days.

When the Subcontractor receives the Contract Confirmation letter, they are obliged to notify Revenue if they believe that they are not a subcontractor of this Principal or indeed if any of the details entered by the Principal were incorrect. This procedure acts as a safeguard for a Subcontractor who has any concerns as to the nature of their relationship with the Principal and the Subcontractor is fully entitled to clarify with the Revenue Commissioners any matters they are unsure about.

Regarding Question No. 232 (Ref: 2250/15), in my reply to Question 216 on 2 December last year I previously provided the Deputy with specific data on tax, interest and penalties recovered by the Revenue Commissioners where they uncovered non-compliance with RCT obligations.

Furthermore, in my reply to Question No. 13 on 3 December last year, I explained to the Deputy that the eRCT system had succeeded in taking away the vulnerabilities for fraud, mainly extraction fraud, based on bogus contractors and bogus documentation that attached to the previous paper-based RCT system. This is a critical feature of the electronic RCT system. The previous paper-based system was exploited by criminal gangs with extraction repayment frauds using bogus deduction cards and bogus sub-contractors to obtain significant fraudulent claims. The electronic RCT system has been designed to remove the opportunity to extract fraudulent claims from the Exchequer.

I also previously informed the Deputy that businesses have a number of tax obligations including obligations relating to tax returns, the payment of tax on the profits of the business, the VAT system, the PAYE system and, where appropriate, the eRCT system. In the course of a Revenue compliance intervention, a Revenue officer may investigate matters pertaining to those obligations and, where necessary, seek the relevant outstanding taxes, interest on late payment of tax and relevant penalties.

The Revenue Commissioners have provided the following information in relation to construction related compliance interventions carried out by them in the period 2008 to 2014, with respect to all taxes and not purely RCT.

Year	Audits	**Other Risk Management Interventions	Total	Total Yield (€)
2008	2,928	0	2,928	€121.3m
2009	2,537	0	2,537	€99m
2010	2,044	2,175	4,219	€68m
2011	1,819	9,644	11,463	€59.5m
2012	1,291	28,373	29,664	€51.6m
2013	1,075	51,248	52,323	€55m
2014	889	52,359	53,248	€56.3m

** The full recording in Revenue's case management system of non-audit interventions and the associated yield began in 2012.

I am further advised that Revenue has always committed a significant resource to monitoring activities in the construction sector and is involved in an ongoing programme of construction related audits, compliance interventions and site visits, directed at large public and private sector contracts, one-off housing and jobs involving repairs, maintenance and enhancements. Revenue's compliance approach is to make the appropriate intervention in a well chosen case. A well chosen case will be identified on the basis of risk, informed by all the information available to Revenue. While the taxpayer's use of the eRCT system will be examined in any compliance intervention, it will be only one of a range of issues to be reviewed.

As regards Question No. 236 (Ref: 2319/15), it is not possible in the timeframe available to provide the Deputy with the information requested for 2008-2013 in relation to non-resident subcontractors. However, the Revenue Commissioners have informed me that in 2014 they carried out 40 audits of non-resident contractors, representing 4.5% of all audits carried out in the construction sector. I am further advised that the Revenue Commissioners will write separately to the Deputy with the relevant details for the years 2008 to 2013.

Number of Audits	Total	Tax	Interest	Penalties
40	€2,032,505	€1,448,704	€223,979	€359,822

I am also advised that apart from audits, Revenue also conducts more targeted interventions like aspect queries and profile interviews on specific risk areas and compliance activity on non-residents engaged in the construction sector needs to be considered in totality. I am further advised that the Revenue Commissioners will also write separately to the Deputy with the details of non-audit interventions for the years 2008 to 2014.

I am very satisfied that Revenue's policing of the construction sector, which is regarded by the Commissioners as one of the riskiest areas of business activity from a tax compliance perspective, is a high priority for them and will continue to be so as we see a welcome revival in the fortunes of the sector. I am also satisfied that the introduction of the electronic RCT system provides Revenue with significant realtime information with which to target their resources.

However, I note the Deputy's continuing interest in the construction sector and compliance with RCT obligations. In previous replies, I suggested that if the Deputy had any specific information in relation to tax evasion or abuses of the tax system, he should pass that information to my officials who will ensure that it gets to the Revenue Commissioners. I re-state that offer.