Tax changes leave State creches off hook

THE proposed Benefit in Kind (BIK) changes proposed from January 1, leave creches run by the State on behalf of their employees off the hook.

So workers in the Departments of Health and Education, who have facilities made available to them by the State won’t be liable for BIK.

Workers on the other hand who are paid a subsidy by their employers will be hit for BIK under the new proposals.

In another anomaly workers who benefit from subsidised canteens will not have to pay extra tax, but those who get lunch vouchers will be liable, under the planned changes it has emerged.

The creche situation is made even more unjust due to another quirk in the way the liabilities have been decided. If a company provides childcare the employees are not liable or if the company is directly involved in the facility that provides childcare the beneficiaries are also exempt under the new BIK proposals.

Last year when the changes were in the air it was expected that Finance Minister Charlie McCreevy would slap a tax on those who benefited from car spaces.

Up to 7,500 civil servants have such an arrangement in Dublin and elsewhere in the country, but the car spaces have escaped the Ministers net.

“I wonder why,” asked ISME chief Mark Fielding, who argues that not only are some of the proposals inequitable they will also be impossible to administer.

On a practical level the question of vans being used by workers for personal use is the single biggest issue facing Irish firms as a result of the changes, said Mr Fielding.

He instanced one Dublin firm where 10 workers use eight vans. Some cover the Dublin area and one driver covers the greater Drogheda area. Under the new BIK rules that worker has to drive to Dublin every night and take the train or use other transport to get back to Drogheda.