Circling the Wagons

Tomorrow morning (24th January), the opening Statement of Mr. Niall Cody, Revenue Chairman, to the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach states:

“Bogus Self-Employment and the Impact on Tax Revenue
Moving now to the final topic, the Committee is aware that on 31 January last year,
the Government published a report entitled “The use of intermediary-type structures
and self-employment arrangements: Implications for Social Insurance and Tax
Revenues”. The Report was prepared by a working group comprising the
Department of Employment Affairs and Social Protection (DEASP) and the
Department of Finance, with technical support from Revenue. It found that on
aggregate, there is no evidence of any significant change in the level of self-
employment in the economy; and that there is limited evidence of bogus self-
employment (disguised employment)”

Reality: There is ample evidence available to Revenue to show that bogus self employment (white collar fraud) costs the exchequer far more than claimant fraud (blue collar fraud):

“In 2016, a major inter-departmental report was completed with a special subsection on construction, and in 2016 nearly 18,000 construction investigations yielded almost €58m in back-tax, interest and penalties” (Irish Independent April 2018).

That’s a return to the exchequer of over €3,000 for every individual bogus self employment case examined.

In comparison, Social welfare claimant fraud totaled €41 million in 2016. The Department of Social Protection conducted more than 5 million reviews between 2012 and 2016 and only managed to yield €41 million in 2016.

For far less money, time consuming reviews and investigations, €58 million was recovered through bogus self-employment investigations. Revenue failed to disclose what the non-compliance rate was for these 18,000 individual bogus self employment investigations, but with returns in excess of €3,000 per investigation, there is no justifiable reason for Revenue and the Department of Social Protection to continue to ignore bogus self employment. Why are they circling the wagons?



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