Thursday, 16 December 2021
Department of Finance
112. To ask the Minister for Finance if his Department has the authority to initiate or commission an investigation or a review into the Revenue Commissioners; and if so, the number of investigations or reviews his Department initiated in the past five years. [61505/21]
142. To ask the Minister for Finance if his Department will consider commissioning an investigation to review the tax agreement signed between the Revenue Commissioners and the courier sector in October 1997 (details supplied) to assess the grounds upon which the deal was signed, the financial implications to the State and to the workers involved and the knock-on effect to other sectors. [61506/21]
I propose to take Questions Nos. 112 and 142 together.
The Deputy will be aware, in accordance with section 101 of the Ministers and Secretaries (Amendment) Act 2011, the Revenue Commissioners are independent in the performance of their functions under, or for the purposes of, the laws governing taxation. Furthermore, all taxpayers have rights of appeal under tax law against assessments to tax raised on them by Revenue.
Regarding the agreement reached between the courier sector and Revenue in 1997, I am advised that the purpose of the arrangement was to ensure that motor bike and bicycle couriers that were engaged on a regular basis by courier businesses were assisted in relation to their tax compliance by having tax deductions made when they were paid for their services. In order to participate in the scheme, the couriers in question had to be bona fide self-employed and as such there was no cost involved to the Exchequer. The courier companies that operated this ‘voluntary PAYE’ scheme did so of their own volition and made the necessary remittances to Revenue based on the deductions from the payments they made to individual couriers.
From the courier’s perspective, no additional costs arose because they participated in the scheme. As they were self-employed, when they filed their annual income tax return at year end, they were given a credit for any tax deducted by the courier companies against their final tax liabilities for the year. In addition, in recognition of the fact that couriers had to cover the costs of insurance, repairs, fuel etc. on their own vehicles, the agreement also provided for a flat deduction of 45% of the courier’s gross annual turnover as expenses of their trade, such that tax only became payable on the balance of 55% of their turnover. This aspect of the agreement was withdrawn at the start of 2019 when PAYE Modernisation was introduced. In common with all other self-employed persons, couriers should now claim any expenses of their trade in their annual income tax return.
I am further advised that the ‘voluntary PAYE’ scheme operated by courier companies has all but ceased to exist, with 2 companies operating the scheme for 10 individual couriers in 2021 and that no similar arrangements exist, or have existed, for any other business sector.
I am advised by Revenue that it conducts a full range of compliance interventions to combat all types of tax evasion. Furthermore, Revenue compliance interventions include a focus on the practice of disguised employment and challenging the inappropriate classification of workers as self-employed contractors. These interventions are conducted by Revenue acting alone or in collaboration with Department of Social Protection officers, who examine the PRSI status of individuals as part of such interventions as well as with officers from the Workplace Relations Commission, who are responsible for examining employee rights including sick leave and other entitlements.
I am fully satisfied that Revenue has and will continue to administer the tax code fairly and in accordance with underlying law. The agreement reached in 1997 between Revenue and the courier industry was a pragmatic approach to secure as much voluntary compliance from within the sector as possible. The instances of the take-up of the scheme today has significantly reduced and Revenue has more administrative powers at its disposal to secure compliance from all commercial sectors than it did back in the 1990s when the agreement was made.