cwai submission 3

C
INTERMEIARY- STRUCTURES AND SELFE-EMPLOYMENT
ARRANGEMENTS TO THE DEPARTMENT OF FINANCE AND SOCILA
PROTECTION CONSULTATION SUBMISSION 31ST MARCH 2016
CWAI
cwadublin@gmail.com
Authors:KennethO’Connor, EdwardCostigan, GerardKinnerkandStephen Murphy
Abstract
This report has been submitted regardingthe concerns of the CWAI related to abuses of the
eRCT tax system and the loss of revenue to the exchequer
Construction Workers Alliance Ireland (CWAI)

2
Acknowledgments
The CWAI would like to thank the following in their part in assisting the drawing up of this
report. Denis Farrell for guidance and support. Suzanne Hunt for her tireless work on
proofing and writing the letters and emails to the various Ministers and TD’s. We would also
like to thank the following TD’s for putting forward the questions to the Dail:
 Deputy Michael Mc Grath
 Deputy Seamus Healy
 Deputy Richard Boyed Barret
 Deputy Peadar Tóibín,
 Deputy Dara Calleary
 Tommy Broughton
 Ruth Coppinger
A special acknowledgement to the MEN and their Families who were involved in a seven-
month long dispute with JJ Rhatigan. We have the deepest respect for you and the struggle
you went through. You have done so much to highlight this issue of bogus self-employment
and forced the government, trade unions and the revenue into this consultation process.
ExecutiveSummary
This report is being submitted to the revenue commissioners as part of a consultation process
to discuss issues arising form the ICTU report released in November 2015. The report will
highlight the short comings in the eRCT tax system in operation at present and how so many

3
workers are being wrongly declared as self-employed by their employers. The report will
show that this not leads to an erosion of the entitlements of the employees and their working
conditions but also to a significant loss in revenue to the Department of finance and the state
through tax avoidance and PRSI contributions by principle contractors and sub-contractors by
declaring that there are multiple contractors working on site rather than direct employees.
Contents

4
1.0 Introduction 5
1.1 Work and collaborations 5
2.0 Our Submission 6
2.1 Bogus self employment 7
2.2 Discussion 7
3.0 Conclusion 8
3.1 Recommendations 11
4.0 References 12
Appendices 13
1.0 Introduction
The Construction Workers Alliance Ireland (CWAI) is a voluntary organisation which was
set up in 2008 to provide an alternative voice for construction workers who would not
otherwise be heard. The CWAI consists of workers from Bricklaying, Carpentry, Plastering,
Machine Operators, Electricians and Construction Operatives along with many others who
are involved in the sector. All those involved have first hand experience of working under the

5
eRCT self-employment/bogus self-employment system and how the system can and is abused
by both employer and sub-contractors.
Our aim is the lobby government and industry associated organisations on issues that affect all
construction workers. For the past few years we have compiled 1reports and submissions on a
number of issues that effect the daily lives of career construction workers both employed and
unemployed, union members and the majority of workers who remain non union.
Since the CWAI was establish, our representatives have met with Government Ministers and
department officials to discuss our concerns surrounding the school building programme and
the widespread erosion of pay and conditions by the use of eRCT certs to promote self
employment by the Revenue Commissioners. The issue of abuse of the RCT1 and the current
eRCT system has been open to abuses for many years which that far exceeds the lifetime of
the CWAI.
Thanks to a number of TD s in the last Dail across all parties we have raised the issue of self
employment / bogus self employment through the use of parliamentary questions in the Dail
and by briefing a number of TD s from various parties on the effect of the widespread abuse of
the eRCT system.
The focus of this report will be on the eRCT self-employment system and how this system has
been abused by the wider construction industry, main contractor, sub-contractors and others
whom work within the sector. The report will provide examples from the experiences of the
authors experiences, Dail questions and answers and information provided by revenue to
various sitting Ministers and TDs in response to questions asked.
1.1 WorkandCollaborations
Over the past few months we have worked with the Irish Congress of Trade Unions and other
groups who also share our concerns regarding the growth of self employment in the
construction industry. While we welcomed their 2015 report on self employment we did not
agree with their view as to the numbers working on the eRCT as we believed it under estimated
the number of effected workers involved, while we accept that the true number is difficult to
determine and this is not helped by the numbers provided following each question asked as all
the answers are quite different. The fact that the department is not in a position to provide an
accurate figure as to the number of workers engaged on a self employed basis is cause for
concern in itself.
2Many of the answers to the questions we arranged to be asked were misleading and inaccurate
to the Dail members present when the issue was raised. We were also disappointed that the loss
of tax revenue was not calculated by the use of the self employment as opposed to a regulated
legitimate PAYE system as previously existed. In a similar report compiled in the UK by the
UCATT trade union on bogus self employment they focused on the loss of tax revenue to the
government by the use of self employment as a tax evasion measure. We share their concern
on this loss which is self evident if not confusing as outlined in the answers to a number of
parliamentary questions to the department finance which we arranged.
1 Appendix 1
2 See appendices for a commentary of questions asked

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It appears from the answer to the questions we arranged to be asked that the tax take in
construction from self employment is negative or at least very lean because of the system of
claiming back payments for supposed expenses without any check. Revenue officials
themselves, have confirmed that they are not in a position to check returns from the self
employed / bogus self employed sector in the construction industry due to the huge numbers
employed on this system. They also confirmed that they depend of the employers who are
mainly small to medium sized “companies” to correctly determine a worker’s employment
revenue status, a solution similar to asking the fox to take care of the chickens at night.
2.0 OurSubmission
As part of this submission we include details of these questions asked in the Dail, we also
include other information such as letters etc which we believe support our view that that over
use of the RCTe system is not an effective method of collecting tax revenue in the construction
industry.
There must also be consideration given to a very practical recent dispute involving members
of the UNITE trade union on a school building site for the Department of Education and Skills.
These workers were forced to work on a bogus self employed system for pay rates equal to five
Euro per hour. This system was supported by the main contractor J.J. Rhatigan, ignored by
revenue commissioner officials and department of Education and Skills officials. As a result
of the effort of these workers who were engaged in a six-month official dispute the truth behind
the bogus self employed system was exposed.
Since the dispute ended, the Labour Court has stated that these workers were PAYE workers
and not self employed, this decision was confirmed by the Department of Social Protection
SCOPE section who also deemed these workers as PAYE workers. This one case reflects the
reality across the majority of building sites in the state where Revenue Commissioners ignore
the concerns of ordinary workers and allow sub contractors and main contractors decide on the
employment and revenue status of workers against their wishes in order as a condition of
employment.
While we have engaged with the request to complete a submission we believe that a follow up
meeting with all the parties who have made a submission should be held. At this meeting we
will provide real life details from construction workers as to the negative effect the system of
self employment has on their daily lives. Many of these workers continue to work and seek
work on building sites and their details must be protected in an industry where black listing
continues to operate on a daily basis.
2.1 Bogusself-employment
"Bogus self-employment refers to workers compelled to work as self-employed instead
of PAYE”.

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“Self-employment” is officially designated “Relevant Contract Tax” (RCT)
Introduced in 1970 by then Finance Minister Charlie Haughey, RCT has undergone many
subsequent variations, the most recent being on January 1st 2012, with the introduction of
eRCT (“electronic Relevant Contract Tax”).
Workers “self-employed” as defined by eRCT effectively lose all the protections and rights
enjoyed by PAYE workers, including:
 access to the CIF pension scheme, with consequent detrimental effect on entitlement
to state pension
 protection by employment law
 access to social welfare benefits
 contract of employment
The common use of monthly or six-weekly (or longer) payments leaves workers vulnerable
to exploitation by unscrupulous employers, creating a vicious circle where exploited workers
are unable to break the cycle for fear of losing money owed.
All such workers could be employed on PAYE
3Numbers of workers on RCT for 2012-13:
Year Active RCT Registrations Contract Notifications
2012 58,855 208,865
2013 62,443 253,969
Breakdown of RCT Registrations by tax rate:
Year 0% 20% 35% Total
2012 30,440 8,969 4,769 44,178
2013 30,750 11,911 3,770 46,431
2014 (to
13/07/14)
26,923 11,074 2,575 40,572
4Net tax take from RCT 2008-2014:
Year RCT Gross (€m) RCT
Repayments/offsets
(€m)
RCT Net (€m)
2008 €826.7 €894.0 -€67.3
2009 €436.5 €490.3 -€53.9
2010 €312.4 €321.7 -€9.3
2011 €267.3 €273.4 -€6.1
2012 €174.3 €171.9 €2.4
2013 €157.0 €144.7 €12.3
3 See: Dáil Question 41524/14
4 (See: Dáil Question 45935/14)

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2014 ( to end of
October)
€167.1 €139.5 €27.6
Total €2341.3 €2435.5 -€94.3
5For comparison, figures for PAYE/USC, 2008-13:
Year PAYE income tax &
USC €M
Number of
Employments
Number of
Employees
2008 741 251,244 149,938
2009 468 170,739 98,240
2010 289 132,144 77,789
2011 349 177,144 64,513
2012 355 107,992 52,011
2013 367 110,675 64,999
It is therefore, contended that the RCT1 system leads to a substantial loss of PRSI to the State
and a consequential loss of social insurance cover for workers. For every bogus self-
employed worker engaged for a year there is a loss to the State of €2,886 in P.R.S.I. For
every thousand workers the loss is €2,886,432. Revenue has made no effort to check the
nature of the 27,900 sole traders contacts. If they are all bogus self-employed (ICTU 2015)
then the State is losing close to €78m in P.R.S I. payments per annum. This amounts to a loss
to the State of €545m since the Code of Practice was agreed.
2.2 Discussion
Since 2008 and the well documented “crash” in the banking sector which lead to significant
losses of employment in the construction sector between 2008 and 2013. The industry has
seen a slow but steady increase in the numbers returning to work in this sector (Cumisky
2016). However, there has been a marked increase in the numbers who are being employed
on a self employed basis (Walsh 2015). Walsh contends that this may be due in part to
employers attempting to avoid paying the industry rates and other entitlement’s to the
workers such as Holiday pay, Pension contributions and PRSI contributions. While he does
state it is difficult to assess if this is the case or not the empirical evidence does suggest that
more workers are indeed being classified by their employer as self-employed rather that the
employee declaring themselves as self-employed.
This view is supported by The Irish Congress of Trade Unions (ICTU) and was emphasized
in a letter to Minister Jan O’Sullivan dated 06/08/2014 and to Ms. Josephine Feehily of the
revenue commissioners date 07/08/2014. In our experience this is wide spread throughout the
industry. It is often the case when taking up employment that the principle contractor or sub-
contractor will state that the payment will be on a “cert”. This is reference to the eRCT
taxation system. Due to many workers circumstances they accept this because they are often
struggling with debt that may be residue from the down turn in the industry or due to long
periods of unemployment.
While the working conditions of employees and their entitlements is the responsibility of
ICTU and their trade union affiliates, Workplace Relations Commission and other such
bodies; revenue do have a responsibility to civic and social society to ensure that workers are
5 (See: Dáil Question 7544/15)

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correctly assigned to their appropriate tax code and the applicable deductions are made. Due
to the transient nature of construction and the employees who work therein, it is vital that
their contributions are collected and allocated accordingly because of the lack of security that
construction provides. These are often vulnerable groups who come lower socio economic
areas and non nationals who may not be accustomed to the tax codes of this jurisdiction.
3.0 Conclusion
We made a decision to compile this submission, rather than simply put our views on the
record, because as far as we are concerned Revenue ignores the views of civil society once it
has formulated a policy which is easy for them to implement.
To date, Revenue have ignored the views of groups like our own and others who represent
workers, in our case construction workers. They have ignored the views of the Irish Congress
of Trade, Unite the Union and TASC and, even though they are always willing to meet and
listen, they continue to ignore what they hear. In February 2012 they made a unilateral
decision to tear up a list of guidelines for determining self-employment that they had agreed
with the ICTU following discussions over the previous few years. Even though Revenue
officials mainly ignored them, those agreed guidelines did serve as a useful reference point
when determining whether a worker was genuinely self-employed or, as in the majority of
cases, a PAYE employee. The fact that they withdrew the guidelines without any notice to
the ICTU officials dealing with this issue speaks for itself. Patricia King, General Secretary
of the Irish Congress of Trade Unions, has Stated the correct position of Congress in a letter
to the Minister of Finance; this was welcomed at the time.
The reason our Alliance has existed since 2008 is because we have real-life experience within
our ranks of workers who, unlike Revenue officials in the public service, are forced to work
on a self-employed basis in order to provide for their families. Our members and contacts
work in the private sector in the construction sector and have witnessed at first hand the
negative effect of Revenue policy in relation to self- / bogus self-employment.
No Revenue commissioners’ employees are self-employed; they rightly enjoy entitlements
such as pension, sick pay, holiday pay including public holidays, health, safety and welfare
protection. At the same time, they impose self-employment on other workers. So-called self-
employed workers are denied these legal entitlements. It is clearly obvious to us that no
worker would willingly surrender all their hard fought legal entitlements and replace them
with an eRCT system that exposes them and their families to employment without any rights
or legal protection. We understand that there is no current demand from public service staff
for the introduction of mandatory self-employment as opposed to legitimate PAYE
employment.
It simply not good enough for Revenue to State that they have no interest in the areas of
social protection or workers' rights. Since they claim that their only duty is to collect tax
revenue, they must then explain how and why they manage to collect so little tax through the
RCT system, as shown in the answers provided from the Department of Finance. We are
confident that a regulated PAYE system in the construction industry would yield more

10
revenue, would be easier to manage and would protect workers' rights—not undermine them
as under the current system.
Revenue must accept that, because of their promotion of self-employment / bogus self-
employment, there are virtually no apprentices in the Bricklaying trade, as no RCT worker
can employ or register an apprentice with SOLAS (O’Connor, Costigan, Kinnerk and
Murphy 2014). They continue to allow bricklaying subcontractors—many of whom are based
outside the State—to determine the employment status of their workers. This is usually the
self-employed system as they can then evade many of their employees' legal entitlements.
Simply by going online—with the assistance of Revenue officials—subcontractors are able to
undermine employees' legal rights and evade tax. The CWAI, in a previously commissioned
report, outlined these abuses taking place on taxpayer-funded school building projects, yet
officials and ministers from both Revenue and the Department of Education and Skills
ignored our findings (O’Connor, Costigan, Kinnerk and Murphy 2014). In the case of the JJ
Rhatigan / Unite dispute, High Court and Labour Court hearings, plus an investigation by the
Department of Social Protection SCOPE section, all confirmed the findings of our
commissioned report: an ordinary, career construction worker, who never was self-employed
nor ever wanted to be, cannot be deemed to be self-employed by a sub contractor or a
Revenue official without their consent (SCOPE 2015 and Labour Court 2015).
We are now requesting a meeting with the relevant Revenue Commissioners with
responsibility for implementing and enforcing this policy of self- / bogus self-employment on
construction workers—in particular the Bricklaying trade, where many of our contacts and
members work or seek to obtain work. We believe that the present policy is bad for the
industry, as it turns career construction workers into low paid workers and enables employers
to circumvent workers' legal entitlements. We also believe that there is a skill shortage
coming, as the number of apprentices recruited has collapsed. Solas, another government
agency, will not register an apprentice employed by a sole trader, in this case a self-employed
Bricklayer; Revenue officials know this but yet are unconcerned. Figures provided by the
Department of Finance in response to Dáil questions all confirm that self-employment in the
construction industry denies the State of the full amount of tax revenue due. We are
concerned that the Department of Finance answers provided to the Dáil were misleading, also
that no one answer provided an accurate figure as to the exact number of workers deemed to
be self-employed in the construction sector. We have already advised many of the new TDs
of the self- / bogus self-employment issues and are assisting them in preparing questions for
the new Dáil.
We are in a position to outline not just our objections to the present system but also to
suggest positive proposals for a replacement system that will be fair to workers, to genuine
subcontractors and to the State, which is losing much-needed tax revenue.
We propose a viable solution and would be prepared to assist in implementing any changes,
even on a trial basis, in the Bricklaying sector. We are confident that a system under which
construction workers in general are deemed automatically to be PAYE workers, in the first
instance when they commence employment on site, will work to the benefit of all parties. We
accept that examples of genuine self-employment exist, but they should be proven to be
genuine on a case by case basis, not, as at present, presumed, allowing subcontractors to
evade their legal and tax responsibilities.
We expect that the views of the Construction Workers Alliance, ICTU, Unite the Union and

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TASC will not be ignored any longer. We recognise that Revenue officials have a job to do
but they cannot ignore the devastating effect their policy of imposing self- / bogus self-
employment on construction workers is having. Neither can they continue to ignore or deny
that the RCT system is failing to deliver adequate tax revenue. Revenue's own figures,
provided in answers to Dáil questions, confirm the failure of their policy of turning every
worker into a self-employed subcontractor. Tellingly, the conditions of employment of their
own officials are—rightly—protected by law.
Recommendations
1. A meeting to be held with all the submission partners. This should be held as soon as
is convenient to discuss the possible solutions to the issues raised.
2. An immediate review of the eRCT taxation system to stop systematic abuse and tax
avoidance.
3. Set up a consultation process between all those who have a vested interest in the
declaration of PAYE or Self- Employed status.
References
Cumisky J (2016) “34 Cranes over Dublin Skyline as Construction Boom Gathers Pace”
http://www.irishtimes.com/business/commercial-property/34-cranes-over-dublin-s-skyline-
as-construction-boom-gathers-pace-1.2519470?utm_source=dlvr.it&utm_medium=twitter
Irish Congress of Trade Unions: Report on Bogus Self-Employment in the Construction
Industry, November 2015.
Depatment of Social Protection (2015) “Decision of Deciding Officer Under Section 300 of
Social Welfare (Consolidation) Act 2005 Reference number SC 0266/2015 19/08/2015

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Labour Court (2015) “JJ Rhatigan & Company (represented by the Construction Industry
Federation and UNITE THE TRADE UNION” Industrial Relations Acts, 1946 t0n 2012,
Section 26 (1) Industrial Relations Act 1990, Recommendation Number. LCR20920
O’ Connor K, Costigan E, Kinnerk G and Murphy S (2014) “Report into employment
standards for bricklayers working and seeking work on school building sites as part of the
Department of Education and Skills’ School Building Programme.
https://www.facebook.com/notes/849698848374530/
UCATT Political https://www.ucatt.org.uk/ucatt-political 29th March 2016
Walsh Frank (2000) “Labour Market Measures in Ireland 2008-2013”
http://www.ilo.org/wcmsp5/groups/public/---dgreports/---
inst/documents/publication/wcms_449928.pd

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Appendices
Appendix 1
12 August2014 at 14:53
Report into employment standards for bricklayers working and seeking work on school
building sites as part of the Department of Education and Skills’ School Building
Programme.
Report into employment standards for bricklayers working and seeking work on school
building sites as part of the Department of Education and Skills’ School Building
Programme.
K O’Connor, E Costigan, G Kennerk & S Murphy
July 2014
Introduction
The Construction Workers Alliance commissioned this report in order to record its concerns on a
number of issues surrounding employment standards, primarily for Bricklayers and Apprentice
Bricklayers who are working on school building sites or who are actively seeking work in this
area.
We accept that the attack on employment standards is not just a concern in the bricklaying area
but also affects all workers trying to earn a living wage on school building sites. However, we
have restricted our comment solely to the bricklaying sector, as there is clear evidence that
concerns we have raised since the commencement of the building programme have yet to be
addressed and continue to be ignored.
We acknowledge the support from many workers on site who have helped us by providing their
time and their willingness to give details regarding their experience on site and their ongoing
frustration at the lack of support they have received. In particular members of BATU, SIPTU and
UNITE have contacted us to record their concerns, in the hope that these issues will be
addressed and normal employment standards will finally apply on school building sites. At the
time of writing, workers are locked outside the gate of a major school project in the Dublin area
because they raised concerns and refused to work on site while still signing on for
unemployment benefit. At the same site, concrete blocks are being sourced from a supplier from
outside the state and delivered by a transport company from outside the state.
The release of this report also coincides with the appointment of new Ministers in the Department
of Education and Skills and the Department of Social Protection. To date, despite the best efforts
of building workers and a number of Trade Union officials, both departments have been slow to
act to protect employment standards. New and refreshed Ministers must now deal finally with the
issues raised in this report and at least consider our recommendations. We are confident this will
lead to real jobs and savings to the state.
The Current Situation
1
Traditionally, the bricklaying sector of the Irish building industry has been difficult to control. For
years bricklayers correctly refused to recognise bricklaying subcontractors and insisted on
working directly for the main contractor on site. This method of employment protected bricklayers
and their apprentices by ensuring that the main contractor paid social insurance contributions,

14
their industry pension stamp and adhered to agreed pay rates and holiday pay. This direct
employment system also ensured that apprentice bricklayers were recruited, registered with what
was then FÁS (now Solas) and received proper training and agreed rates. This ensured a regular
supply of well-trained apprentices with internationally recognised qualifications, while at the same
time provided quality agreement-compliant employment for what is the major sector of the
building industry. For years the employers’ representative body, the Construction Industry
Federation, promised that in the event that bricklaying subcontracting was accepted as a
legitimate form of employment, procedures would be put in place to ensure that bricklaying
subcontractors would comply with an agreed set of rules and procedures. As expected this did
not happen and as a result we are left with a major sector of the building industry that is
unregulated and continues to rely on black economy practices to exist.
Furthermore, the majority of bricklaying subcontractors that obtain contracts on school building
sites are based outside the state, usually in Northern Ireland - outside the jurisdiction and free
from the regulations that apply in the Republic of Ireland. The School Building Programme is a
massive programme with work due to commence on at least seventy schools in 2014.
Accordingly the bricklaying component and associated economic value is substantial.
2
Any craft - in this case bricklaying - depends on a regularised training system to produce a skilled
workforce for the future development of the industry. Traditionally FÁS, and now Solas, ensured
that bricklaying apprentices were registered and received proper training. Whilst accepting that
apprentice numbers will not return to previous levels, we are seriously concerned at the current
record low level of registration for bricklaying apprentices. For the year 2013 only 3 bricklaying
apprentices were registered with Solas. On the numerous site visits made while compiling this
report there appeared to be a complete absence of bricklaying apprentices working on building
sites. To make matters worse, Solas will not register apprentice bricklayers employed by
subcontractors registered outside the Republic of Ireland. As the majority of bricklaying
subcontractors are based in Northern Ireland, Solas has no role in their training and will neither
register them as apprentices nor recognise their time served. This situation was confirmed to us
on the Loreto College, Kilkenny extension site and reflects the true position regarding the
downgrading of bricklaying training. Since all sectors of the industry are confident that the sector
will grow later this year and into next year, it is evident that a skill shortage for bricklayers and
apprentices will arise.
3
With the formation of the present government in 2011 the then newly appointed Minister Ruairí
Quinn commenced a massive School Building Programme both to build urgently required new
schools and to replace inadequate school buildings still in use. This programme was financed
totally by government borrowing, as it was felt to be required not only to provide badly needed
infrastructure but also as a way to stimulate the economy and in particular the building industry.
This sector had been devastated by the 2008 economic crisis resulting in instant unemployment
for thousands of building workers and the collapse of the apprentice training system due to lack
of work. The most recent unemployment figures still show little or no improvement for the long-
term unemployed and, in spite of the School Building Programme, no real increase in
opportunities for building workers. According to CSO figures, in the period 2007-2008
employment numbers there were 273,000 employed in the building sector; that number has now

15
fallen to 102,000 despite massive state borrowing and investment. Concerns were expressed
both prior to and at the time the School Building Programme was announced that, because it
was financed by borrowing, every measure must be taken to ensure that it returned real value for
money. At the commencement of the programme it was clearly stated that unless building
contractors who were awarded school building contracts complied with current industry
agreements and rates, the package would not provide the level of employment that was possible.
Concern was also expressed that without tight monitoring and regulation contractors would not
comply with all employment statutory requirements such as the deduction for PAYE and PRSI
payments.
From the outset these concerns proved correct. The tendering process allowed building
contractors to compete for work on what appeared to be below cost tendering prices by the main
contractors. Furthermore, the failure by Revenue to make any serious effort to ensure that
bricklaying subcontractors complied with even the minimum requirements has exposed the
sector to a totally non-compliant culture regarding taxdeductions. To make matters worse,
Revenue has allowed subcontractors to treat individual workers as self-employed by the
continuous use of tax certificates known as RCT1 documents. This abuse is in clear breach of
Revenue’s own guidelines and regulations regarding bogus self-employment designed to
facilitate tax evasion and avoidance. For years Revenue have been notified of these abuses but,
like many abuses in the wider society, the state continues to ignore the legitimate concerns of
building workers and their representatives. This has resulted in the loss of tax revenue due to the
failure to implement the most acceptable of systems to deduct tax, which for building workers is
the PAYE system. To date everyone from Ministers to Revenue Commissioners have refused to
accept that the vast majority of building workers wish to be treated as PAYE workers rather than
work as bogus self-employed. Bricklaying subcontractors operating in the black economy appear
to have more influence with Revenue and Social Protection than building workers themselves.
This system of forced bogus self-employment in order to obtain work on school building sites
must end.
4
The content and message within this report is not new. While it is concerned primarily with the
School Building Programme it is also relevant in the wider context.
It is accepted that former Minister Ruairí Quinn listened to concerns while he was in office and
that he introduced some measures to combat the black economy on school building sites. With
the introduction of a private company, Contracts Administration Services (CAS) to carry out a
small amount of monitoring and auditing, hopes were raised that proper control of employment
standards would result. While the efforts of CAS are welcome, the overall approach has had very
limited effects and to date has resulted in little or no change. Many workers believe that this
initiative was too little too late. It also appears that CAS has met resistance from department
officials who resent their presence. As a result there has been a failure to apply proper
monitoring and auditing across the whole of the School Building Programme; the introduction of
CAS has been ineffective due to lack of genuine support for this essential work.
5
We repeat, the content of this report is not new but is intended to provide some idea as to why
the School Building Programme has failed to produce real jobs for building workers. One must
question why the views and beliefs of the Construction Workers Alliance (CWA) and the

16
thousands of workers who are members of trade unions continue to be ignored. Crucially,
support remains solid across the present government parties for the retention of the fraudulent
RCT1 system that robs building workers of their legal entitlements.
This year alone 70 new school projects are due to commence. This programme is set to continue
and if promises are kept the government will start a social housing programme as well.
On that basis we make the following recommendations in good faith, as we believe
improvements can be made even at this late stage. These improvements will:
 lead to the creation of real jobs for building workers
 provide revenue to the state by returning PAYE, PRSI and VAT
 provide badly needed positions to train bricklaying apprentices.
Furthermore it will provide a level playing ground for contractors and subcontractors who wish to
obtain legitimate contracts and provide decent employment standards to their employees. These
recommendations will provide for a foundation for a mutually beneficial resolution for all involved
in the School Building Programme.
Recommendations proposed by the Construction Workers Alliance (CWA)
A.
The bogus self-employment system as currently operated allows for the widespread abuse of
RCT1 certificates, resulting in loss of revenue and erosion of workers’ rights. Fortunately,
rectifying this is quite simple.
We recommend that when a contract is awarded to a main contractor be it SISK, G&T Campton
or who ever, the main contractor must ensure that all their selected subcontractors must hold a
current C2 tax clearance certificate or its accepted equivalent. The main contractor must also
ensure that all employees of their selected subcontractors are treated as PAYE employees and
refuse to accept bogus self-employment.
Most of this is already contained in DES contracts, but it is routinely ignored from site level right
up to the level of management in the DES Building Unit Department in Tullamore, Co. Offaly. All
that is required is to monitor compliance with existing contracts and enforce penalties for non-
compliance.
Similarly, Revenue need only apply their own guidelines and adhere to the accepted policy as
outlined by the Department of Social Protection, which is opposed to bogus self employment.
B.
While the introduction of CAS was welcomed at the time, the fact is that the present system is
not working and needs to be changed. This private company is well established in the private
and semi state sector including the ESB and the National Roads Authority. However the model of
monitoring and auditing contained in its contract with the DES is not effective as it is limited in
scope and lacks real power to investigate, particularly where main contractors and
subcontractors are not willing to engage. We propose that the model CAS operates in the private
sector also apply within the School Building Programme; this will allow for a more robust system
of monitoring and auditing on site. This will provide a level playing ground for legitimate
contractors to tender for work building our schools to the benefit of both the state and the
workforce.
C
We are aware that various shadow economy committees meet and carry out worthwhile
investigations in all sectors of the economy; further co-operation between the various state

17
agencies is required. We are concerned that Revenue allows the abuse of bogus self
employment to continue while at the same time the Department of Social Protection suffers the
loss of much needed revenue due to the avoidance of PRSI payments, etc. The failure of these
two government agencies to work together results in a loss of revenue to the state and the loss
of building workers’ legal entitlements. NERA needs to be reformed as it has played no role in
the building industry and to date has ignored any concern expressed by representatives of
building workers. To many - and this is a view we support - NERA has no role to play.
D
As a representative group for building workers The Construction Workers Alliance proposes to
consider taking further legal advice with the intention to take a case against the Irish Government
for their failure to protect workers on site on state-funded contracts. We believe that the advice
we have received is correct; various government departments are aware of the ongoing abuse of
building workers on state-funded sites, yet like many other institutions in the past continue to
ignore the concerns raised. No longer can we accept that it has taken up to eight weeks working
on site before any wages are paid, that up to the time of writing (8th July 2014) workers are
being told on a major school site that they are all self employed and to continue working and
claiming social welfare payment. Government officials are aware of this but as in the past
continue to ignore workers’ concerns. This is a matter of public record and will not be denied.
Building workers must be protected from the black economy practices of bricklaying
subcontractors - practices to which various state agencies, for whatever reasons, have turned a
blind eye.
E
We propose that all state building contracts commit to employing a number of apprentices
commensurate with the size and scope of the contract. The current situation, particularly on DES
contracts, is not sustainable and is leading to a future skill shortage for bricklayers. The well-
established apprenticeship system in Ireland has always provided highly skilled workers but has
of late been dismantled through the actions of non-compliant subcontractors who shy away from
any type of legal commitment, including the employment of young workers and apprentices. We
also propose that the plan by Minister Richard Bruton to return the long term unemployed to work
through social clauses is implemented. It is simply not acceptable to introduce measures to
provide work for unemployed workers only to allow contractors and subcontractors to ignore the
Minister’s admirable and worthwhile proposals.
F
As a representative group for workers we believe that it is possible to control employment
abuses and black economy practices on state-funded sites if there be but the will to do so.
A system of pre-entry checks should apply on all state-funded sites. At the moment resources
are wasted trying to fix problems after they occur. We propose that the problems not be allowed
to develop in the first place. This can be ensured by implementing and enforcing a simple
principal of good maintenance and monitoring. Most sites work to a programme from design
stage to completion and hand over to the client. This programme controls who is due on site,
when they are due and the period that they will be present on site. As material needs to be
ordered and delivered and fitted, proper planning is an integral part of the process - this should
also apply to employees on site. We propose a simple pre-entry check be carried out to confirm
what subcontractors are due on site and when, that all their workers are compliant with
conditions as set by Revenue and the Department of Social Protection regarding working
legitimately and collecting tax, PRSI and other contributions. Most of this detail should already be

18
available in order to comply with Health and Safety legislation so this results in very little extra
work for contractors and subcontractors on site.
G
We are concerned that organisations including the Construction Workers Alliance are prevented
from meeting and speaking to workers on many sites involved in the School Building
Programme. We accept many workers come from abroad and are in a difficult position when
engaging with the CWA representatives on site. We propose that the clause contained in DES
contracts allowing access to sites for representatives is complied with and no longer ignored as it
is at the moment. The situation where a major building company can print and display a ‘blacklist’
of worker representatives on site can no longer be tolerated. Such abuses resulted in a
compensation fund for workers in the UK who were prevented from working, yet on projects in
the School Building Programme has resulted in no loss or sanction to the main contractor
concerned.
While compiling our proposals we were conscious that unless all state agencies are willing to act
together, nothing would change. With the welcome appointment of Jan O’Sullivan TD as Minister
for Education and Skills there is a new opportunity to make changes and introduce simple
compliance measures that will save the state millions and provide real jobs for long term
unemployed building workers. The School Building Programme has assisted the shadow
economy without any hindrance; the opportunists are already looking at the proposed social
housing contracts for future profit. To date no sanction has been applied to any contractor on the
School Building Programme who employed black economy workers or who refused to pay
bricklayers on site for up to eight weeks later than when their legal entitlement was due. As long
as the culture of ignoring workers who raise concerns remains no change will occur and the state
and the taxpayer will continue to lose badly needed revenue which should be returned to the
state through PAYE, PRSI and VAT payments.
Finally we wish to thank all the building workers who contacted us with their ideas and
experiences from site. We acknowledge that the majority are bricklayers and a dwindling number
of apprentice bricklayers who have suffered very badly since 2008. We accept that the concept
of direct employment with the main contractor is achievable as it was in the past and we commit
to work with you to achieve our goals:
 an end to bogus self-employment
 the restoration of direct employment for bricklayers and apprentices
 fair terms and conditions and a fair living wage for all those employed on school building sites
All these are attainable, with a real benefit to the state in terms of increased revenue and
spending within the state.
____________________ ____________________
Ken O’Connor Ned Costigan
____________________ ____________________
Gerry Kennerk Stephen Murphy

19
Appendix 2
QUESTION NO: 60
DÁIL QUESTION addressed to the Minister for Finance (Deputy Michael Noonan)
by Deputy Michael McGrath
for WRITTEN ANSWER on 19/11/2015
To ask the Minister for Finance if he has examined the operation of the Relevant Contracts
Tax System in the construction industry; the number of persons in the industry working under
this system; if he satisfied that taxation law is being fully complied with in respect of the
System; and if he will make a statement on the matter.
REPLY.
The operation of Relevant Contracts Tax, and the electronic Relevant Contracts Tax (eRCT)
system that underpins it, is a matter in the first instance, for the Revenue Commissioners.
The Deputy will be aware that -
(a) the eRCT system of tax deduction at source applies to payments made by principal
contractors to sub-contractors; and
(b) the PAYE system of tax deduction at source applies to payments made by employers to
their employees.
As I outlined in a PQ (Question No. 39514 on 10 November 2015) response last week and
based on information provided to me by Revenue:-
(i) there are 99,741 sub-contractors currently registered under the eRCT system of which
23,202 are sole traders with the balance being companies or partnerships; and
(ii) based on employer end of year PAYE returns for the 2014, there were 75,386 individuals
employed in construction related businesses.
More up-to-date information is not currently available. However, the CSO's recently
published Quarterly National Household Survey data for Quarter 3 2015 shows employment
in the sector increasing by over 13% on Quarter 3 2014.
I am advised by Revenue that monitoring of the construction sector for abuses of the tax and
duty systems forms part of its on-going compliance programmes to which they commit
significant resources. In the course of this year, Revenue has strengthened its focus on the
sector and its national programme of compliance interventions in relation to tax and the
construction sector in general. Revenue's focus includes:-

20
Proper operation of the eRCT system including ensuring that principal contractors are fully
reporting payments through the eRCT system and ensuring that principal contractors are
reporting "Unknown" sub-contractors to Revenue;
Reconciling reported activity under the Home Renovation Incentive (HRI) with VAT returns
filed;
Reconciling reported activity under the eRCT system, PAYE/PRSI returns, VAT returns and
examining profit margins;
Proper operation of the VAT reverse charge;
Proper operation of PAYE/PRSI obligations;
Ensuring that employees are not misclassified as sub-contractors;
Ensuring that obligations of non-principals/sub-contractors are being fully met.
Revenue has also increased the number of unannounced visits to construction sites.
If the Deputy has specific information relating to individuals or business groups in any sector
who are involved in tax evasion, he should provide that information to Revenue. Revenue
has provided a tailored template on their website which facilitates reporting of tax evasion
and the relevant links are being provided for the Deputy's information.
The Deputy will also be aware that during the Committee Stage debate on Finance Bill 2015
earlier this week, I announced that a public consultation would shortly be held on a range of
issues relating to employment practices and trends. Such a process will allow all interested
parties to feed into a broad ranging consideration of the issues involved.

21
Appendix 3
QUESTION NO: 66
by Deputy Seamus Healy
To ask the Minister for Finance the number of workers in the construction sector that were
taxed on a Pay As You Earn basis in each year since 2008; the total revenue earned by these
workers in each of these years; the total amount of tax; Universal Social Charge; and
Employee's Pay Related Social Insurance paid by these workers in each of these years; the
total amount of Employer's Pay Related Social Insurance paid in respect of these workers in
each of these years; and if he will make a statement on the matter.
REPLY.
I am advised by the Revenue Commissioners that the PAYE Income Tax and Universal
Social Charge (USC) paid in respect of employees in the construction sector, as well as the
numbers of employments for such workers, for the period 2008 to 2013 (the latest year for
which figures are available), is shown in the Table below. It should be noted that an
individual PAYE employee may have one or more employments in a year. The number of
individual PAYE employees in the construction sector for the same period is also shown in
the table.
Year PAYE Income Tax
& USC €m
Number of
Employments
Number of
Employees
2008 714 251,244 149,938
2009 468 170,739 98,240
2010 289 132,144 77,789
2011 349 117,012 64,513
2012 355 107,992 52,011
2013 367 110,675 64,999
It is not possible to furnish the breakdown between Income Tax and USC. A breakdown
of PRSI for the construction sector is not readily available to Revenue for the periods
in question.

22
Appendix 4
QUESTION NO: 68
by Deputy Richard Boyd Barrett
To ask the Minister for Finance the amount of tax that was returned from Relevant Contracts
Tax 1, by gross figure, by net figure after rebates and offsets for 2014; and if he will make a
statement on the matter.
REPLY.
The Relevant Contracts Tax (RCT) system is a tax deduction at source system that is applied
by a principal contractor on payments due to a subcontractor under a relevant contract. All
payments are reported to Revenue, and in a minority of cases (based on risk criteria), a
percentage of the payment due is withheld and paid over to Revenue, to be offset against the
subcontractor's liability for income tax, VAT and other taxes.
The tax that is collected under the electronic RCT system in any year is first and foremost
offset against any unpaid tax liabilities the subcontractor may have. Thereafter, it is available
for offset against tax as it falls due. Only where the tax deducted under the RCT system
exceeds the subcontractor's tax liability for the year is the 'excess' tax deducted repaid by
Revenue.
I am informed by the Revenue Commissioners that the gross Relevant Contracts Tax (RCT)
collected in 2014 was €200.8 million. €122.4 million was offset against tax liabilities for
2014 or earlier years and €47.4 million was repaid. €31 million remains available for offset
against subcontractors' tax liabilities (or for repayment where tax liability is exceeded) and
will remain so for a period of four years.
Appendix 5
QUESTION NO: 69
by Deputy Richard Boyd Barrett

23
To ask the Minister for Finance if he will explain the apparent discrepancy in his letter of 17
July 2015 regarding bogus self-employment, where he stated the number of payers of
Relevant Contracts Tax 1 in the construction sector was approximately 34,000 and yet more
recently in a Parliamentary response on the same issue, he stated that the number was 75,386;
and if he will make a statement on the matter.
REPLY.
Persons to whom the RCT system applies are either principal contractors or
subcontractors the RCT system does not apply in respect of employees. The concept of
'RCT1 taxpayer' as referenced by the Deputy does not exist.
The figure of 34,000 referred to in the Question relates to the approximately 34,000
subcontractors active in the RCT system. The figure of 75,386 referred to in the Question
relates to the number of individuals employed in construction related businesses.
As to wider issues relating to employment matters, during the recent Finance Bill Committee
Stage debates, I announced that a public consultation will be held shortly on a range of issues
relating to employment practices and trends.
Appendix 6
QUESTION NOS: 67,74
DÁIL QUESTIONS addressed to the Minister for Finance (Deputy Michael Noonan)
by Deputy Peadar Tóibín,Dara Calleary
* To ask the Minister for Finance when the current investigation by the Revenue
Commissioners into complaints made against contractors working at a publically funded
community college (details supplied) construction project will be complete; if this
investigation is to conclude before the project is completed; and the actions that will be taken
against the contractors should the complaints by workers be upheld by the Revenue
Commissioners.
- Peadar Tóibín T.D.

24
For WRITTEN answer on Wednesday, 22 October, 2014.
* To ask the Minister for Finance if he will provide an update on a recent Revenue
Commissioner's investigation (details supplied) in County Dublin; and if he will make a
- Dara Calleary T.D.
REPLY.
I am advised by the Revenue Commissioners that they are fully committed to tackling
shadow economy activity and non-compliance with tax obligations in the construction
sector. As part of their compliance activities, Revenue officers regularly and on an ongoing
basis undertake unannounced visits to a wide range of building sites, including school
construction projects. In some instances, these site visits are undertaken jointly with other
State agencies, including the Department of Social Protection and NERA, the National
Employment Rights Authority.
Where there is evidence of non-compliance found in the sector, the Deputies can be assured
that Revenue officers take appropriate action against those found to be non-
compliant. Appropriate action in this context includes ensuring that there is full compliance
with the relevant payroll and business taxes, the recovery of outstanding taxes, the payment
of statutory interest on unpaid taxes and, where a person is liable to a penalty, the seeking of
that penalty.
The Revenue Commissioners have further informed me that section 851A of the Taxes
Consolidation Act 1997, which was inserted by the Finance Act 2011, placed on a formal
statutory basis the long-standing and accepted obligation on the Revenue Commissioners to
treat all taxpayer information confidentially. Accordingly, the Deputies will appreciate that
Revenue is legally precluded from disclosing if a taxpayer is or is not the subject of a
compliance intervention and it may not make the outcome of any matters relating to any
specific taxpayer and / or location publicly available.

25
Appendix 7
DAIL QUESTION
NO. 89
To ask the Minister for Jobs, Enterprise and Innovation when the current investigation by the
National Employment Rights Authority into complaints make against contractors working at
a publically funded construction project (details supplied) will be complete; if this
investigation will conclude before the project is completed; and the actions that will be taken
against the contractors should the complaints by workers be upheld by NERA.
- Peadar Tóibín.
* For WRITTEN answer on Wednesday, 22nd October, 2014.
Ref No: 40576/14
R E P L Y
Minister for Jobs, Enterprise and Innovation (Mr Bruton)
NERA carries out its work on a confidential basis and in line with the practice of other
investigative and enforcement bodies of the State NERA does not comment on any inspection
which it undertakes. This ensures that both the private information of individuals and the
commercial affairs of companies or organisations are treated in accordance with legal
obligations. Only where a Court adjudicates on a case does such information become a matter
of public record.
However I can state that publicly funded construction projects are a matter of interest to
NERA and the sector is subject to ongoing monitoring by NERA. NERA’s inspection remit
encompasses the enforcement of certain statutory employment rights and obligations under
employment legislation, including the following Acts:
Failure or refusal to comply with legal obligations under the above Acts can result in a
criminal conviction for an employer.
Where in the course of an investigation NERA encounters a question as to whether a person
is self-employed, such claimants are directed to seek clarification of their status with SCOPE
Section of Department of Social Protection or to the Revenue Commissioners to deal with the
issuing of certification regarding self-employment. When this issue is clarified any claims
under employment legislation can then be investigated.

26
Deputy Peadar Tóibín Minister for Finance Information on Michael Noonan Zoom on
Michael Noonan if he will provide in tabular form the annual number of registrations for
relevant contract tax refused by the Revenue Commissioners between 2008 and 2014.
[45935/14]
Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on
Michael Noonan I am informed by the Revenue Commissioners that every principal
contractor who enters into a contract with a sub-contractor in relation to construction, forestry
or meat processing operations is obliged to register as a principal contractor for RCT. Sub-
contractors, who are not already registered for RCT, will be automatically registered for RCT
on foot of a contract notification from a principal contractor.
I am also advised that refusing to register a principal or sub-contractor for RCT purposes
will generally not arise as this is a necessary prerequisite to enable a principal or a sub-
contractor comply with their RCT obligations.
I have previously dealt with Questions from the Deputy in relation to the numbers of sub-
contractors in the State and the numbers registered for Relevant Contracts Tax (RCT) in
Question No. 202 of 25 November 2014 (Ref. 45172/14) and Question No. 215 of 2
December 2014 (Ref. 46181/14). My reply to Question No. 312 of 4 November 2014 (Re.
41524/14) is also relevant.
The Deputy may be referring to refusals in the case of sub-contractors where there is
possible misclassification of employment (i.e. a "bogus" self-employment). I am advised that
as details of contract offers are not normally available at RCT registration stage, it is not
possible for the Revenue Commissioners to make any determination at that point as to the
nature or status of any contract, and in these circumstances Revenue is not in a position to
refuse any applications for registration on these grounds.
There are safeguards, which have been designed into the electronic RCT system, for those
individuals who may have concerns that they are caught up in "bogus self-employment".
Firstly, a principal contractor has a statutory obligation to notify Revenue through the
electronic RCT system of details of all contracts entered into with a sub-contractor and
secondly, on receipt of these contract details, Revenue issues a "Contract Confirmation" letter
directly to the individual who is described by the principal as being the sub-contractor. On
receipt of the "Contract Confirmation" letter, a sub-contractor is obliged to notify Revenue if
they believe that they are not a sub-contractor but are more correctly an employee and
Revenue will take the necessary steps to investigate the matter.
Revenue is very active in visiting construction sites through its Joint Investigation Units,
whose work includes conducting joint operations with officers from NERA and the DSP.
One project that Revenue has a strong focus on is the Department of Education and Skills
Capital Programme. Revenue staff have been involved in over 70 visits to such sites since
January 2012 and this work is on-going.

27
A second additional recent, and on-going, Dublin Region project reviewed 18 publicly
funded construction sites ranging in contract size from €1m to €400m, on which in excess of
300 contractors were identified (including approximately 40 non-resident contractors).
Following risk assessment, 51 audits and 20 risk management interventions were opened and
to date, 34 audits and all 20 risk management interventions have been completed, with a yield
of €749,476. Some non-resident contractors were also appraised and, as a result, a number of
audit interventions were opened.
Issues encountered during audit interventions ranged from non-operation (or non-reporting)
of the electronic RCT system, inaccurate posting of contracts and payments and workers
being paid in cash without any supporting documentation, i.e. payslips, P45s on cessation,
etc.
The Joint Revenue/Department of Social Protection Investigation Unit teams also conducted
30 unannounced visits, concentrating on construction projects with contract values in excess
of €5m. A total of 817 workers were interviewed of which 128 (15%) had compliance issues
which are being addressed. Issues encountered were, in the main, employees that had not
been registered with Revenue. The team is currently engaged with 5 sub-contractors who
have misclassification (i.e. bogus self-employment) issues with their workers.
The conclusion reached at the interim report stage of this project is that the electronic RCT
system has helped to significantly mitigate an area of historically high risk, although some
practices including 'cash payments' to employees have persisted.
In conclusion, RCT is designed to ensure tax compliance in the construction and certain
other sectors. The question of bogus self-employment in the sector is multi-faceted and is a
subject of review by the Department of Social Protection in respect of PRSI, both
contributions and benefits, and by NERA in relation to employment rights as well as Revenue
in relation to tax issues. It is important to recognise that a legitimate feature of the
construction and certain other sectors is the use of sub-contactors.

28
Appendix 8
Deputy Peadar Tóibín asked the Minister for Finance if he will provide in tabular
form the annual tax revenue collected and tax refunds relating to relevant contract tax
between 2008 and 2014. [45936/14]
Minister for Finance (Deputy Michael Noonan): Regarding the annual tax revenue
collected and tax refunds relating to Relevant Contracts Tax (RCT) between 2008 and 2014,
figures have been provided to me by the Revenue Commissioners. However, I would like to
provide some additional detail to the Deputy regarding RCT generally and the figures
supplied.
Firstly, the Deputy will be aware that the primary purpose of the RCT regime is not to
generate significant tax yield for the Exchequer. Instead it provides a mechanism to address
tax compliance risks in certain sectors where the practice of sub-contracting activities is a
significant feature of the operational model in the sector. Under RCT, tax deductions at
source may apply to payments made in relation to contracts in the construction, forestry and
meat processing sectors.
Secondly, where amounts are deducted at source from contract payments made by a
principal contractor, these tax deducted amounts are generally not repaid but are instead
available for offset by sub-contractors against other tax liabilities that they may have.
As the Deputy has requested information for the period 2008 to 2014, this period covers
both the original paper-based Relevant Contracts Tax system and its successor, the electronic
Relevant Contracts Tax system, which came into effect on 1 January 2012. Depending on
whether a contract payment was made under the current or the previous system, there are
differences in when deduction at source applies and in the quantum of any such deduction.
Prior to the introduction of the electronic Relevant Contracts Tax system in 2012, principal
contractors were obliged to deduct tax at 35% on all payments to sub-contractors unless the
sub-contractor had a C2 certificate and certain other documentation which allowed the
principal to make contract payments gross to the sub-contractor. At times, this resulted in
excessive amounts of tax being withheld which required sub-contractors to claim refunds of
these overpayments. This could be done annually at income tax filing time, or at any time
during the tax year as interim refunds were a feature of the old system.
With the electronic RCT system, a sub-contractor is assigned a deduction rate of 0% if their
tax affairs are fully compliant, 20% if their tax affairs are substantially compliant, or 35%
where the sub-contractor is significantly non-compliant.
Since the introduction of the new electronic RCT system, the practice of claiming refunds

29
does not generally arise as the new system automatically assigns a credit of all tax
deducted by principals against the sub-contractors income tax liability and so the figures for
repayments includes amounts that have been offset against other tax balances. There are no
interim repayments under the eRCT system.
Year RCT Gross - €m RCT
Repayments/Offsets
- €m
RCT Net - €m
2008 826.7 894.0 -67.3
2009 436.5 490.3 -53.9
2010 312.4 321.7 -9.3
2011 267.3 273.4 -6.1
2012 174.3 171.9 2.4
2013 157.0 144.7 12.3
2014 (to end
October 2014)
167.1 139.5 27.6
As the Deputy will note from the figures, under the old system pre-2012 it was possible for
more monies to be repaid/offset than were collected where a principal contractor did not pay
over RCT deducted at source. This particular risk area has been greatly mitigated since the
electronic RCT system was introduced as it provides the Revenue Commissioners with the
facility to monitor RCT activity in realtime, to identify risks and to intervene early in cases
with the highest risk of evasion.
It has also succeeded in taking away the vulnerabilities for fraud, mainly extraction fraud,
based on bogus contractors and bogus documentation that attached to the previous paper-
based RCT system. This is a critical feature of the electronic RCT system. The previous
paper-based system was exploited by criminal gangs with extraction repayment frauds using
bogus deduction cards and bogus sub-contractors to obtain significant fraudulent claims. The
electronic RCT system has been designed to remove the opportunity to extract fraudulent
claims from the Exchequer.

30
Appendix 9
Question No: 42 Ref No: 40575-14
To the Tánaiste and Minister for Social Protection
To ask the Tánaiste and Minister for Social Protection when the investigation by the her
Department into complaints make against contractors working at a publically funded
construction project (details supplied) will be complete; if this investigation will conclude
before the project is completed; and the action that will be taken against the contractors
should the complaints by workers be upheld by her Department.
- Peadar Tóibín.
Kishoge Community College
R E P L Y
Tánaiste and Minister for Social Protection (Joan Burton T.D):
My Department is committed to tackling all forms of shadow economy activity and, in this
regard, Departmental inspectors carry out visits to a wide range of businesses, including
building sites, as part of their on-going compliance operations. In many instances, such
visits are undertaken jointly with other State agencies such as the Revenue Commissioners
and the National Employment Rights Authority (NERA).
The location and site referred to was visited by inspectors from my Department’s Special
Investigation Unit and officers from Revenue and NERA on 23rd September 2014.
Given the different types of work (block laying, roofing, electrical, etc.) that may occur on a
building site at different times of a construction, visits to such sites are not necessarily in the
form of a ‘specific time bound investigation’ into activities on any particular site. Such
visits are ‘open ended’ fact-finding visits wherein evidence of compliance or non-
compliance may be detected. Where evidence of non-compliance or misclassification of
employment status is detected, appropriate action against those found to be non-compliant is
taken.
On foot of the representations made by the Deputy, the issues highlighted are being
comprehensively examined in light of the above inspection. However, a person’s
compliance and employment status is confidential to that individual. In that regard, the
Department cannot give specific details of either on-going areas of concern or the outcome

31
of their operations on building sites (including sites of publically funded projects) as that
may contravene confidentiality.
Appendix10
QUESTION NOS: 67,74
DÁIL QUESTIONS addressed to the Minister for Finance (Deputy Michael Noonan)
by Deputy Peadar Tóibín,Dara Calleary
* To ask the Minister for Finance when the current investigation by the Revenue
Commissioners into complaints made against contractors working at a publically funded
community college (details supplied) construction project will be complete; if this
investigation is to conclude before the project is completed; and the actions that will be
taken against the contractors should the complaints by workers be upheld by the Revenue
Commissioners.
- Peadar Tóibín T.D.
* To ask the Minister for Finance if he will provide an update on a recent Revenue
Commissioner's investigation (details supplied) in County Dublin; and if he will make a
- Dara Calleary T.D.
REPLY.
I am advised by the Revenue Commissioners that they are fully committed to tackling
shadow economy activity and non-compliance with tax obligations in the construction
sector. As part of their compliance activities, Revenue officers regularly and on an ongoing
basis undertake unannounced visits to a wide range of building sites, including school
construction projects. In some instances, these site visits are undertaken jointly with other
State agencies, including the Department of Social Protection and NERA, the National
Employment Rights Authority.
Where there is evidence of non-compliance found in the sector, the Deputies can be assured

32
that Revenue officers take appropriate action against those found to be non-
compliant. Appropriate action in this context includes ensuring that there is full compliance
with the relevant payroll and business taxes, the recovery of outstanding taxes, the payment
of statutory interest on unpaid taxes and, where a person is liable to a penalty, the seeking of
that penalty.
The Revenue Commissioners have further informed me that section 851A of the Taxes
Consolidation Act 1997, which was inserted by the Finance Act 2011, placed on a formal
statutory basis the long-standing and accepted obligation on the Revenue Commissioners to
treat all taxpayer information confidentially. Accordingly, the Deputies will appreciate that
Revenue is legally precluded from disclosing if a taxpayer is or is not the subject of a
compliance intervention and it may not make the outcome of any matters relating to any
specific taxpayer and / or location publicly available.
Appendix11
DAIL QUESTION
NO. 89
To ask the Minister for Jobs, Enterprise and Innovation when the current investigation by
the National Employment Rights Authority into complaints make against contractors
working at a publically funded construction project (details supplied) will be complete; if
this investigation will conclude before the project is completed; and the actions that will be
taken against the contractors should the complaints by workers be upheld by NERA.
- Peadar Tóibín.
Ref No: 40576/14
R E P L Y
Minister for Jobs, Enterprise and Innovation (Mr Bruton)
NERA carries out its work on a confidential basis and in line with the practice of other
investigative and enforcement bodies of the State NERA does not comment on any
inspection which it undertakes. This ensures that both the private information of individuals
and the commercial affairs of companies or organisations are treated in accordance with
legal obligations. Only where a Court adjudicates on a case does such information become a
matter of public record.
However I can state that publicly funded construction projects are a matter of interest to
NERA and the sector is subject to ongoing monitoring by NERA. NERA’s inspection remit

33
encompasses the enforcement of certain statutory employment rights and obligations under
employment legislation, including the following Acts:
· National Minimum Wage Act 2000
· Organisation of Working Time Act 1997
· Payment of Wages Act 1991
· Employment Permits Acts 2003 & 2006
· Employment Agency Act 1971
Failure or refusal to comply with legal obligations under the above Acts can result in a
criminal conviction for an employer.
Where in the course of an investigation NERA encounters a question as to whether a person
is self-employed, such claimants are directed to seek clarification of their status with
SCOPE Section of Department of Social Protection or to the Revenue Commissioners to
deal with the issuing of certification regarding self-employment. When this issue is clarified
any claims under employment legislation can then be investigated.

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