Not responsibility of Revenue to regulate bogus self-employment, says chairman

Not responsibility of Revenue to regulate bogus self-employment, says chairman

Niall Cody, Chairman of the Revenue Commissioners, said "we are not tax agents". Picture: GARETH CHANEY /Collins

The head of the Revenue Commissioners has acknowledged that bogus self-employment is “absolutely” an issue for workers, but said that his body has no responsibility for regulating it.

Asked at a hearing of the Public Accounts Committee on Thursday morning re the trend, which sees people who work in effect directly for one company being treated as self-employed, whether he recognises the problem Niall Cody said: “Absolutely, but we are the tax agents.” 

“Our job is to ensure that the tax is collected, we are not the deciding agent,” he said.

The body generally perceived as the deciding agent regarding employment status is the Department of Social Protection, whose appropriation account will be discussed by PAC next week.

Mr Cody said that a 1997 decision by Revenue, which deemed all couriers to be self-employed in the interest of “uniformity” and which still stands today, had been made in order “to ensure that motorcycle couriers were brought into the tax net”.

He said, when asked why Revenue had declined a PAC recommendation to commission an independent investigation into the issue of bogus self employment in the courier sector, that he had “found the request to be strange”.

“I appeared at the committee, at the end I was asked about bogus misclassification issues,” he said. 

“The committee then had a separate meeting with an individual (activist Martin McMahon), we weren’t involved, and then a series of recommendations came as a result of a discussion which involved neither the Department of Social Protection nor the Workplace Relations Commission, which has primary responsibility for employee rights.” 

“The recommendations were made for this office on the back of a conversation that wasn’t had with this office,” Mr Cody said.

Revenue had refused the PAC recommendation stating that such a request was outside its jurisdiction.

“We are the collection agent, not the determining agent,” Mr Cody said. He agreed that he could not state categorically that no revenue had been lost to the State on foot of bogus self-employment.

He also acknowledged that Revenue has not calculated at any point the loss to the State on the back of such misclassified employment.

Separately, regarding the administration of the pandemic wage subsidy schemes, Mr Cody said that the second scheme, the Employment Wage Subsidy Scheme which was first implemented last September and is due to be wound down imminently, had given rise to “examples of absolute fraudulent behaviour” which had since been referred to the gardaí.

“Any payment system will lead to unscrupulous acts,” Mr Cody said but added that with the initial Temporary Wage Subsidy Scheme, first implemented in April of 2020 as the pandemic began to bite, such fraud was minimised as beneficiaries had to prove they were on a company’s payroll prior to the onset of Covid-19 and were aware they would have to pay back overpayments.

“The EWSS allows for new businesses to register,” he said, adding that in the broader context of fraudulent behaviour “the money we’ve paid out is really small”.

“I distinguish a fraud-type case from a business who may have mistakenly thought they’d be eligible,” Mr Cody said, but added that the fraud cases relating to the EWSS are “essentially robbery, rather than the tax evasion that we are used to”.

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