A row over interpretation of tax law has cost the State Examinations Commission (SEC) €11m in a settlement related to expenses for teachers who supervise and mark Junior and Leaving Certificate exams.
Contract staff brought in for State exam duties each year are paid travel expenses but the SEC believed they should not have income tax, PRSI, or Universal Social Charge deducted because the schools where they teach are their normal place of work.
A Revenue Commissioners audit determined that the schools where they supervised or marked practical exams were their normal place of work in respect of contracts with the SEC, meaning there was no tax exemption on any related expenses.
A settlement of €10.9m, including €1.4m interest for 2010 to 2013, was paid this year. However, because the audit was finalised before contract staff were recruited for 2015 exams, and the settlement amounts are not being recovered from the individuals who were paid, a further €1.9m to €2m tax liability will be paid in respect of this year’s State exams.
The Department of Education has also paid a tax settlement this year, totalling €1.36m in liability and interest, in respect of underpaid tax to home tutors from whom it should have made deductions at source.
It also settled a four-year liability and interest of €570,000 owing on fees and expenses to directors of 11 boards and committees from whom deductions should have been made at source.
Neither the SEC or department was charged a penalty as Revenue treated both as adjustments based on differences of interpretation of the relevant tax laws.
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