Dara Calleary (Mayo, Fianna Fail)
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35. To ask the Minister for Finance considering he is the lead Minister for the Action Plan for Jobs, why 173,000 self-employed persons will miss out on a new self-employed tax credit in 2016; the effect of this on encouraging entrepreneurism; and if he will make a statement on the matter. [37997/15]

Michael Noonan (Limerick City, Fine Gael)
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The Action Plan for Jobs is a whole of government, multi annual initiative which mobilises all Government Departments to work towards the objective of supporting job creation.

The figure of 173,000 quoted by the Deputy appears to be the difference between figures provided in answer to Parliamentary Questions No. 253 and 254 of 20 October 2015 in relation to the number of persons that might benefit from the possible introduction of a tax credit, similar to the PAYE tax credit for self-assessed persons.

I am advised by the Revenue Commissioners that the figure of 284,600 provided in answer to question 253 related to the possible extension of the €1,650 Employee Tax Credit to all non-PAYE cases including cases subject to tax under Schedule D, proprietary directors and assisting spouses and individuals whose primary income consists of investment income.  In addition, due to the manner in which income earners are categorised in Revenue's systems, the estimate included cases classed as Schedule D where most of their gross income is non-PAYE. Some of these cases may have been availing of the PAYE credit. The estimate did not take into account the ability of the credit to be fully absorbed.

The figure of 111,600 provided in answer to question 254, is the estimated number of individuals expected to benefit from the Earned Income Credit as introduced in Budget 2016.  This credit was specifically designed to benefit self-employed individuals who have an active trade or profession, and who do not have access to the PAYE credit.  This is therefore a smaller subset consisting of self-employed individuals having trading or professional income taxable under Cases I, II or III of Schedule D, including proprietary directors, and who do not have another source of PAYE income.

Where a person has both employment and self-employment income, a claim can be made for both credits but the maximum credit value available to each taxpayer is €1,650, being the maximum value of the PAYE credit.  This is in line with the functioning of the existing PAYE credit employees who work in two different employments are not entitled to claim two PAYE credits, for example.

Therefore all self-employed persons with an active trade or profession, who do not have access to the PAYE credit, should be in a position to claim the Earned Income Credit in 2016.