Tuesday 19 February 2019

Charlie Weston: 'Revenue should concentrate on bogus self-employment - not modest reliefs for workers'

According to the ICTU, the State could be losing up to €240m each year because of bogus self-employment, which is particularly a problem in the construction industry. (Stock image)
According to the ICTU, the State could be losing up to €240m each year because of bogus self-employment, which is particularly a problem in the construction industry. (Stock image)
Charlie Weston

Charlie Weston

Private-sector workers have good reason to feel furious. Revenue is pressing ahead with its plans to strip many of them of modest tax reliefs they get for doing their jobs.

The flat-rate expenses relief that 85,600 workers get was due to go at the start of this year, but a public outcry, with claims PAYE workers were being unfairly targeted, meant the loss of the reliefs was put off until next January.

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In total, around 550,000 workers are entitled to claim flat-rate expenses at a cost of €85m a year to the State. But Revenue is undertaking a review of all 53 employment categories where workers are allowed claim expenses to help defray the cost of providing and maintaining uniforms and tools. The expenses are as low as €121 a year for shop assistants.

They are one of the precious few reliefs that ordinary PAYE workers can claim, after the removal of many reliefs in reaction to the financial crisis that started a decade ago.

The existence of limited flat-rate expenses relief for workers contrasts with the situation for the self-employed who can claim a much wider range of tax breaks.

Then there is the bogus self-employed situation. According to the Irish Congress of Trade Unions (ICTU), the State could be losing up to €240m each year because of bogus self-employment, which is particularly a problem in the construction industry.

Some employers consider workers as self-employed, despite them effectively being staff members. Treating someone as self-employed means there is no employer PRSI (pay related social insurance) of 10.95pc on total pay. ICTU told the Oireachtas committee on employment affairs that 24.3pc of those working in construction were classified as self-employed with no employees, compared to a level of just 3.9pc in industry in general.

If ICTU is correct, then the loss of PRSI payments to the State is three times the cost of the flat-rate expenses for workers. If Revenue and the Department of Social Protection really wanted to save money, then dodgy employers misclassifying workers as self-employed should be the focus.

Ordinary workers are now the bedrock of the taxation system, so why attack them?

And remember that the people in Revenue making the decisions on flat-rate expenses have their generous pension provision subsided by those same workers.

If fairness was to prevail, then the senior Revenue staff engaged in ripping flat-rate expenses from ordinary workers would focus in on the bogus self-employment scandal.

However, empathy for ordinary workers seems to be in short supply in the Revenue Commissioners.

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