Paul Murphy (Dublin South West, RISE)
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130. To ask the Minister for Finance the frequency of the Revenue Commissioners not following the lead role of the Department of Social Protection in relation to employment status; when this has occurred; the areas in which this has happened; and the way that a difference in employment status determination between the Revenue Commissioners and the Department of Social Protection is resolved (details supplied). [47056/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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Employment classification is a complex area and there is no single clear definition of the terms ‘employed’ or ‘self-employed’ in Irish or EU law. As a matter of clarification, questions of employment versus self-employment status impact the work of three different Government bodies. The Department of Social Protection (DSP) has responsibility for the PRSI system and determines employment status for social insurance purposes; the Workplace Relations Commission (WRC) determines employment status when adjudicating on employment rights matters; and Revenue may determine a worker’s employment status in the context of his/her treatment for income tax purposes and in allocating the income earned to the appropriate Schedule under the Taxes Consolidation Act 1997.

While in most situations involving determinations of employment status there is commonality of approach across the three bodies, the decision of one organisation is not binding on the other, and as a consequence, a determination of employment status in one context may not be the same as in another context.

There are close working relationships between the three bodies, including conducting joint compliance interventions to ensure that employers are operating employment arrangements correctly. Furthermore, in July 2021, an interdepartmental working group comprising the DSP, Revenue and the WRC further updated the Code of Practice on Determining Employment Status. The purpose of the revised Code is to provide an enhanced understanding of employment status, taking into account current labour market practices and developments in legislation and case law. These developments include, for example, new forms of work such as platform work and the gig economy. It is a ‘living document’, which will continue to be updated to reflect relevant changes into the future.

Instances where determinations of employment status between Revenue and the DSP (and/or the WRC) differ are very rare and there is open dialogue between the relevant bodies to discuss the respective views. However, as already stated, the decision of one organisation is not binding on the others.

One example where the approach between DSP and Revenue is different involves home tutors. The Department of Education has an administrative agreement with Revenue that while home tutors are subject to class S PRSI (self-employed for DSP purposes), income tax and PRSI are deducted under the PAYE system (the Revenue treatment for employees) and the tutor must file an income return only if they are in receipt of other income.

Given how fine the dividing lines can be between employment and self-employment, it is a testament to the good working relations between the three Government bodies involved that there is, by and large, a common view on employment status issues.