€11m tax to be paid on exam staffing expenses

A tax settlement of almost €11m is expected to be made by the State Examinations Commission next year as a result of an audit of expenses paid to contract staff.

The Revenue Commissioners audit is still ongoing but it is understood that it relates to differences in interpretation of how payments to certain categories of staff engaged by the SEC for running the Junior and Leaving Certificate exams should be treated.

The anticipated settlement is behind an increased provision in the Department of Education budget to the SEC in 2015.

It allocated a €52.5m budget to the commission this year, but this will rise to almost €64.4m in 2015, of which €10.7 m is believed to be provided for the anticipated settlement payment to Revenue.

The expenses which are subject of the audit were paid by the SEC without deducting tax, but Revenue believes they should have been subjected to taxation.

It is unclear how far back the payments to which the likely settlement relates go, or the number or categories of contract staff involved.

However, the Irish Examiner understands there will be no question of the SEC having to recoup any undeducted taxes from contract staff, and that the outcome of the audit will not effect payment arrangements for contract staff who will be employed to operate the 2015 State exams.

Almost €10m of the SEC’s €60m budget in 2012 was paid in travel and subsistence to commission employees and contract staff.

Around 23,000 contract staff are used every year, including drafters, setters, written and practical examiners, and exam superintendents, the majority drawn from the country’s working second-level teachers.

The department is also setting aside close to €1.5m in its 2015 spending plans for the outcome of another ongoing Revenue audit.

It relates to treatment of two other payment types, one being payments to home tutors, which the tax authorities believe should be taxed at source.

The other is certain payments to members of boards and committees operated by the Department of Education, which it is understood have been paid on a self-employed basis instead of a PAYE basis, as Revenue believes they should be.

Meanwhile, Pauric Travers is expected to meet Department of Education officials today as part of efforts to see if collapsed talks with teacher unions about junior cycle reforms can be reconvened. He was chairing talks between Education Minister Jan O’Sullivan’s officials and leaders of the Association of Secondary Teachers Ireland and Teachers’ Union of Ireland. The talks broke down a month ago, leading to a strike on December 2.

The unions are threatening to close the country’s 723 second-level schools with a second strike on January 22 unless the dispute is resolved, saying they remain opposed to the minister’s plans that members correct their own students’ coursework for the reformed Junior Certificate.