Couriers treated as self-employed due to precedent set in mid-1990s, Pac hears

Revenue has acknowledged that all couriers are deemed to be self-employed by way of a single precedent first used by the Department of Social Protection dating from the mid-1990s. Picture: Eamonn Farrell/RollingNews.ie

Revenue has acknowledged that all couriers are deemed to be self-employed by way of a single precedent first used by the Department of Social Protection dating from the mid-1990s.

The issue is discussed in a briefing paper delivered by Revenue to the Public Accounts Committee (PAC).

Bogus self-employment, which sees people who are to all intents and purposes fully employed by a private entity denied the statutory social insurance contributions that PAYE workers receive, is an issue which affects many industries, including construction, IT, and transport workers, such as couriers.

Revenue’s submission was a follow-up to its appearance before the PAC last November, when it said it was unable to estimate what the level of such bogus self-employment is in Ireland.

it is estimated that bogus self-employment costs the State anywhere between €240m and €1bn a year in lost PRSI contributions.

In the submission, Revenue chairman Niall Cody said “there is no one specific ‘test’ case’” used to determine whether or not a person can be deemed to be self-employed.

“However, couriers were regarded as self-employed for PRSI purposes as a result of a Social Welfare Appeals Officer’s decision,” Mr Cody said.

“In the interest of uniformity, Revenue decided, without prejudice, to treat those couriers as self-employed for tax purposes.”

The decision Mr Cody was referring to dates from June 1995, when the Social Welfare Appeals Office at the Department of Social Protection overruled an appeal from a courier as to their lack of PAYE status and deemed them to be self-employed.

In the same document Mr Cody stated that “Revenue’s position is that each case is individual and needs to be considered on its own merits”.

“Whilst the facts of each case will determine whether an individual is either an employee or self-employed, Revenue historically held the view that, in general, motorcycle and bicycle couriers were engaged under a contract for service, ie they are self-employed individuals,” he added.

The current iteration of the PAC has shown a deal of interest in the issue of bogus self-employment, with committee chair and Sinn Féin TD Brian Stanley recently calling for Martin McMahon, a Meath-based activist who has been campaigning on the subject for many years, to appear at a hearing.

That meeting is scheduled for March 23. Mr McMahon maintains all couriers in Ireland are still deemed to be self-employed using the same sample case as precedent.

“Revenue has acknowledged that social insurance rates for the employed and self-employed are a policy matter outside its remit, yet it is still willing to accept that all couriers are self-employed at the stroke of a pen,” Mr McMahon said.

“Meanwhile, couriers are labelled as being self-employed en masse, yet they can’t challenge this as a class as no such legislation exists which would allow them appeal as a group of people,” he added.