Mairéad Farrell (Galway West, Sinn Fein)
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395. To ask the Minister for Finance if the Revenue Commissioners will review its agreement with the Department of Education to label all home tutors as employees of the parents and not employees of the Department of Education in light of the Supreme Court decision in Karshan. [29318/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Home Tuition Grant Scheme is operated by the Department of Education and Youth. The purpose of the scheme is to provide funding towards the provision of a compensatory educational service for children who, for a number of specific reasons, are unable to attend school. It is a condition of the scheme that parents or guardians must source a qualified tutor who is registered with the Teaching Council of Ireland for the duration of the approved tuition. It is important to note that the contractual engagement is between the parent/guardian and the tutor.

I am advised by Revenue that since September 2015, home tutors engaged under the Home Tuition Grant Scheme have been considered, for tax purposes, to be employed under a contract of service. This means that these tutors have been considered employees of the parent or guardian concerned and are subject to PAYE deductions on any emoluments (pay) received from the scheme. For ease of administration, the Department of Education and Youth operates PAYE on payments of emoluments made to a home tutor where the parent or guardian concerned employ the tutor directly. This administrative practice removes the burden for each individual parent or guardian from the requirement to register as an employer and administer the PAYE system. However, it does not mean that the Department of Education and Youth is the employer for tax purposes.

On 20 October 2023, in a unanimous decision, the Supreme Court delivered a detailed judgment in The Revenue Commissioners v. Karshan (Midlands) Ltd. t/a Domino’s Pizza. The case was concerned with whether the delivery drivers were independent contractors under a “contract for service” and taxable under Schedule D of the Taxes Consolidation Act 1997, or employees under a “contract of service”, and taxable under Schedule E of that Act (PAYE). It is important to note that the case was concerned solely with the proper tax treatment of the workers concerned.

The judgment provides an extensive review of relevant caselaw, and succinctly summarises it through the provision of a five-step decision-making framework. The decision-making framework consists of five questions that is to be used to resolve the question of whether a contract is one of service (employee) or for service (self-employed).

The question of who is engaging the home tutors under the Home Tuition Grant Scheme has not changed post the Supreme Court decision. I am advised by Revenue that its understanding is that is the parent/guardian who continues to engage the tutor.

Naoise Ó Muirí (Dublin Bay North, Fine Gael)
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396. To ask the Minister for Finance when the VRT rules were last reviewed for crew carrier vehicles that can carry over five passengers (details supplied); if he is aware of the implications of this additional cost on those working in the construction industry; if he is considering plans to address this; and if he will make a statement on the matter. [29330/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Under the Finance Act 1992, Vehicle Registration Tax (VRT) is assessed on a vehicle at the time of its registration, and the way the tax is computed depends on the category of vehicle involved.

VRT on Category A vehicles (generally passenger vehicles) is assessed based on the value of the vehicle and its emissions levels for carbon dioxide (CO2) and nitrogen oxide (NOx). Currently, VRT on Category B vehicles (generally light commercial vehicles and motor caravans) is assessed at 13.3% of the Open Market Selling Price (OMSP) of the vehicle. Finance Act 2024 introduced an emissions-based VRT system for Category B vehicles which will apply from 1 July 2025. The 13.3% VRT rate on the OMSP is retained for vehicles with CO2 emissions over 120g/km, while for category B vehicles with emissions of 0g/km up to and including 120g/km, a reduced rate of 8% on the OMSP will apply. Heavier commercial vehicles, including lorries and buses, come within Category C, and are charged VRT at a flat rate of €200.

The legislation provides that the appropriate category of a particular vehicle is determined at the time of its registration based on the vehicle’s technical categorisation under EU type-approval rules. Category B vehicles are defined in the Finance Act based on the EU type-approval classification N1. These are commercial vehicles, designed and constructed for the carriage of goods and not exceeding 3.5 tonnes.

Certain commercial vehicles are designed to carry both cargo and passengers, and these qualify as either a Category A or Category B vehicle under Irish VRT law depending on the details of their technical specification, including whether the cargo and passenger areas are separate. In most such cases – often called ‘crew cabs’ – the commercial vehicle’s cargo space is separate from the passenger space and these generally qualify for Category B, due to the distinct cargo compartment. The Category B VRT rate of 13.3%, for which crew cabs normally qualify, will typically result in a lower VRT charge than the vehicle would otherwise attract as a Category A passenger vehicle. Crew cabs enable businesses, mainly in the construction sector, to carry workers safely to and from sites or other workplaces while still having room to carry tools and other equipment. The legal definition specifically allows up to 6 passengers to travel in up to two rows of seats, which must be separated from the cargo area.

Since 31 July 2018, as a result of an amendment in the Finance Act 2017, N1 vehicles with 4 or more seats which do not have a separate cargo compartment are defined as Category A vehicles. The purpose of this provision was to guard against tax avoidance by ensuring that N1 vehicles are charged at the Category A rate of VRT applicable to passenger vehicles, unless such vehicles have a separate compartment between the passenger area and the cargo-carrying compartment.

I have no plans at present to review this issue further.