Thread by @williamhboney1

The Chairperson of @RevenueIE is deliberately misleading the Public Accounts Committee. The latest communication from @RevenueIE is dated the 5th November and follows on from Revenue's refusal to allow an investigation, requested by the Public Accounts Committee, into Revenue's

https://twitter.com/caulmick/status/1465223044285321216

unlawful decision to label all couriers as self-employed at the stroke of a pen in 1997 (backdated to the early 1980s).

It is essential that this thread be read in conjunction with the “Code of Practice on Determining Employment Status, July 2021” referred to by Revenue in

their letter of 5th November 2021 - Link here gov.ie/pdf/?file=http…

Revenue Letter of 5th November 2021 -

1.Revenue State:
“It is important to note that PAYE is not a tax, but a collection mechanism for Income Tax”

The Code of Practice on Determining Employment Status, July 2021 (link above) states:
“An individual would normally be an employee if he or she-
•Has their tax deducted from their wages through the PAYE system”

The True Factual position:
PAYE is a collection mechanism for the collection of income tax at source from employees. Revenue’s position on the operation of a PAYE mechanism for couriers as self-employed workers does not meet the necessary criteria in the updated Code of Practice

2.Revenue State:
“The operation of PAYE on bona fide self-employed couriers involved the application of a withholding tax”

A.‘Withholding Tax’
The operation of PAYE on couriers who had been labelled as self-employed en masse by Revenue did not involve the application of a

withholding tax. Revenue is deliberately misleading the Public Accounts Committee in stating that this was a ‘withholding’ tax. The operation of PAYE on couriers involved the application of a ‘Flat Rate Expense Allowances’ system which is exclusively for the use of employees,

and could not possibly work for self-employed persons. That the system operated by Revenue was a ‘Flat Rate Expenses Allowances’ system is confirmed by Revenue in a letter from the Chief Inspector of Taxes to an Accountancy Firm which represented Courier Company Employers in

protracted negotiations with the Revenue Commissioners to have all couriers labelled as self-employed. This letter is dated 7 March 1997 and unequivocally states that motorcycle couriers had a flat rate expenses allowance of 45% and pushbike courier had a flat rate expenses

allowance of 20%. Tax and PRSI were deducted weekly, at source, from couriers and was clearly indicated on their payslips as was their status as ‘employees’ and the Courier Companies status as ‘employers’. From the 'Special Tax Agreement' Sections 3.1 & 3.2 -

B.‘Bona fide Self-Employed Couriers’
The use of a flat rate expenses allowance system, exclusively for the use of employees, operated through the PAYE system, which deducted tax and PRSI at source, weekly, from couriers, exposes that couriers were not and are not ‘bona fide’

self-employed workers. They are employees to whom Revenue have applied a ‘self-employed’ label in order to negate the decades long non- compliance of courier company employers with their statutory obligations.

3. Revenue State
“A review of the 1997 letters from Revenue bears out the fact that the individuals in question were required to be self-employed and that the conditions to participate in the “voluntary PAYE scheme” were that the individuals were in fact bona fide self-employed”

Revenue then proffer the ‘factors’ Revenue rely upon to make the claim that all couriers are self-employed as follows:

A.That the vehicle was owned by the courier
B.All the outgoings in relation to the vehicle were paid by the courier

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C.The courier was engaged under a standard self-employed contract
D.A basic wage was not paid in addition to a "mileage" rate.

THERE IS NO BASIS FOR CATEGORISATIONS PURELY BY OCCUPATION. Each case is assessed on its merits in accordance with the general principles

of Irish Law. Operations which seem to be the same may differ in actual terms and conditions in any given case. Revenue is telling the PAC that Revenue has taken decades of legislation, scores of Court rulings and distilled them down to 4 simple tick box criteria.

This is not just ignoring the Higher Courts and the authority of the Judiciary in this matter, the use of these 4 'factors' by the Revenue Commissioners to label a group/class of worker as self-employed, is the Revenue Commissioners acting IN DEFIANCE of the Higher Courts.

That Revenue is telling the PAC, in writing, that they are, and have been, acting outside of the Law to label couriers as a group as 'self-employed' since at least 1995, is beyond doubt. Regardless of what the SWAO & the Dept. of Social Welfare do and have done,

the Revenue Commissioners CANNOT decide to act outside of the Law 'in uniform' with the Dept. SW and the SWAO. It was never the law that decisions could be made by group and class, not in 1997 and certainly not now.

In the 1998 Denny Case ruling, Keane J specifically ruled that each case MUST be determined in light of its particular facts and circumstances. The Revenue Commissioners are specifically precluded from making insurability of employment decision on a group/class basis.

There is no way around this for Revenue. Revenue cannot decide to benefit one set of employers over another with a Special Tax Agreement based on 'conditions' which are outside of the Law.

On ‘Factor A’, that the vehicle was owned by the courier.

In 2000, the Social Welfare Minister sought legal advice on the ownership of a vehicle as an indicator of self-employed status for a courier. The Minister was told, in no uncertain terms,

that ownership of a vehicle was not an indicator of self-employment as per the Denny case. The Legal advice from the Chief State Solicitors delivered by Mark Connaughton SC to the SW Minister in 2000 states:

“Insofar as there are any distinguishing facts, they appear only to relate to the provision of a motorcycle by the claimant (courier) and it is respectfully suggested that this cannot of itself justify a conclusion that the claimant (courier) is in business of his own account”

The legal position of the State Solicitors Office is confirmed in The Code of Practice on Determining Employment Status, July 2021 which states:

“It is possible that the provision of tools or equipment will not have a significant bearing on reaching a conclusion about which

employment status is appropriate, having regard to all the circumstances of a particular case”

Revenue’s position on the ownership of a vehicle as a determinative factor to label all couriers as self-employed workers does not meet the necessary criteria

in the updated Code of Practice governing such matters. Many employees, including but not exclusively, Social Welfare Inspectors, Revenue Employees, Journalists etc. are required to use their own vehicles in the everyday course of their employment.

On ‘Factor B’, that all the outgoings in relation to the vehicle were paid by the courier.
The payment of road tax, motor vehicle insurance and vehicle maintenance is a legal obligation on all persons who own a vehicle. It is not, and cannot be a determinative

‘factor’ specifically used to label couriers as self-employed.

Nowhere in The Code of Practice on Determining Employment Status, July 2021 are the normal outgoings for all vehicle owners listed as a factor in determining employment status of couriers. Revenue’s position on

outgoings in relation to vehicle ownership to label couriers as self-employed workers does not meet the necessary criteria in the updated Code of Practice governing such matters.

On ‘Factor C’, that the courier was engaged under a standard self-employed contract.

The assertion by Revenue that a contract is determinative of self-employed status has been roundly rejected by the Higher Courts. In the Denny case, the contract between the

parties was in writing and was drafted with considerable care with a view to ensuring that the putative employee was regarded in law as an independent contractor. . Nevertheless, both the High Court and the Supreme Court affirmed that the person was in fact an employee.

Revenue is fully aware that the existence of a contract is not an indicator of self-employment. Keane J ruled that one must look beyond what is written in a contract. It is the reality of the situation which determines employment status not merely the existence of a contract.

That a ‘standard self-employed’ contract is not determinative of self-employed status is further confirmed in The Code of Practice on Determining Employment Status, July 2021 which states:

“While statements in written contracts to the effect that an individual is not an employee may express the opinion or preference of the contracting parties, the courts have found that they are of minimal value in coming to a conclusion as to the

actual employment status of the person concerned and may be overruled”

Revenue’s position on the existence of a standard self-employed contract to label all couriers as self-employed does not meet the necessary criteria in the updated Code of Practice governing such matters.

On ‘Factor D’, that a basic wage was not paid in addition to a "mileage" rate.

The Code of Practice on Determining Employment Status states:
“An Individual who is paid by commission, by share, or by piecework, or in some other atypical fashion may still be regarded as

an employee”

Revenue’s position on the use of an atypical payment method to label all couriers as self-employed workers does not meet the necessary criteria in the updated Code of Practice governing such matters. Being paid by the piece

ie. by delivery, by brick laid, by potato picked, is not and never was an indicator of self-employment. It is also a fact that Revenue’s own extensive records show that only a tiny number of Courier Company Employers operated an atypical payment fashion.

The vast majority of Courier Company Employers operated a Basic wage and regardless of the atypical payment matrix used by some companies, the atypical payment also amounted to a weekly wage.

4.Revenue State:

“It should also be noted that the determinations made back in 1997 that the individuals concerned were genuinely self-employed are still valid today and meet the necessary criteria in the updated Code of Practice governing such matters that was

published in July this year by the Minister for Social Protection”

The true factual position is that the 4 'factors' deemed by Revenue to indicate self-employment have been rejected by the courts and they do not at all meet the necessary criteria in the Code of Practice

governing such matters, a fact the Revenue Commissioners are fully aware of. Couriers were not bona fied self-employed workers back in 1997 and most certainly are not bona fied self-employed workers today.

5.Revenue State:
“Bearing in mind the significant lapse of time, the information available to Revenue in relation to matters which occurred over 20 years ago is severely limited, particularly in light of Revenue only having access to information returned in statutory reporting”

The Revenue Commissioners hold extensive and extremely detailed information in relation to the false self-employment label they have placed on couriers. This information includes, the background and discussions of the Employment Status Group which led to its inaugural meeting

in 2000, a comprehensive record of taxes and PAYE paid, at source, by every courier from 1997 to 2019 and the Courier Company employer they exclusively worked for.

6.Revenue State:
“However, with the introduction of PAYE Modernisation in 2019, Revenue has access to more detailed real time data in relation to PAYE returns. Revenue can conclude from that data that there is limited use of the voluntary PAYE system in recent years.

Once again, Revenue is deliberately misleading the Public Accounts Committee. From 1997 to 2019, the Revenue Commissioners operated a ‘Special Tax Agreement’ with Courier Company employers to treat all couriers as employees

in practice but to deduct ‘S’ class PRSI (generally self-employed status) instead of A class PRSI (generally employee status). In tax briefing 198/18 Revenue reviewed the ‘Special Tax Agreement’ for Courier Company Employers and decided that the

‘Special Tax Agreement’ no longer applied. The vast majority of courier companies operated under Revenue’s ‘special tax agreement’ and figures from 2020 and 2021, after Revenue had ceased to operate the Special Tax Agreement are nothing more than a deliberate attempt from

Revenue to hide the true scale of the losses to the exchequer from their deliberate misclassification of couriers as self-employed.

7.Revenue State:

“In relation to the financial and sectoral implications of the voluntary PAYE system agreed by Revenue and courier firms in March 1997, Revenue’s position remains, as previously detailed, that there was no cost

involved as the couriers were correctly classified as self-employed”

Couriers were not and are not correctly classified as self-employed. The operation of the Special Tax Agreement presents a unique opportunity to evaluate exactly the entirety of the losses to the

exchequer from this deliberate misclassification of all couriers as self-employed. Considerable costs include the loss of employers PRSI and the loss of taxes which would have been collected had couriers been correctly identified as employees.

8.Revenue State:

“The application of the voluntary PAYE system ensured that those self-employed individuals were facilitated in such a way that the users of the services of the couriers withheld some income tax through the voluntary PAYE system. This led to

the courier having income tax withheld on payments received which could be offset when filing their Income Tax return”

Again Revenue is deliberately misleading the Public Accounts Committee.

This was not a ‘withholding tax’, it is indicated very clearly in the Special Tax Agreement that it was a ‘Flat Rate Expenses Allowance’ system for employees. Couriers were not required to file income tax returns.

This is confirmed in the Special Tax Agreement where it states:

“Income tax and PRSI is collected in a structured fashion. This will avoid the couriers having to comply with the provisions of the self-assessment system

e.g. annual form 11 filing, payment of preliminary tax, exposure to surcharge for late filing etc.”

Revenue’s own records will show that few if any of the couriers subjected to the Special Tax Agreement filed income tax returns.

Few if any were registered for VAT, few if any had any knowledge whatsoever about the reasons behind why they were treated in reality as employees but were denied all the rights and entitlements of employees because S Class PRSI was allowed to be deducted from

their wages by their employers on the instruction of Revenue.

9.Revenue State:

“The Department of Social Protection (DSP) had decided that class S was the appropriate rate of PRSI. DSP is responsible for determining PRSI classes and any impact on the Social Insurance Fund is a matter for that Department”

Early in 1997, an accountancy firm, senior management from a courier company and the chief inspector of taxes met in the Burlington Hotel. This was the culmination of years of lobbying by Courier Company Employers to have all couriers labeled as self-employed

because Courier Company Employers refused to comply with their statutory obligations. It was in the Burlington that they came up with the 'Special Tax Agreement' to label all couriers as self-employed. The Courier companies pushed hard to get Revenue

Revenue to accept that a single decision in the SWAO was a precedent setting test case but Revenue was way to cute to put their neck in the noose of an unlawful test case so instead they firstly declined to accept the swao decision as a test case,

stated that they were not bound by social welfare decisions (important point, shows they are more than collection agents) but that they would act in 'uniform' with the Dept SWs decision to label all couriers as self-employed.

Revenue, regardless of what decisions Social Welfare made, created a special tax agreement made on a group and class of workers which could not be overturned. There simply is no avenue/facility in Irish law to overturn an unlawful group/class decision.

In the Special Tax Agreement between Revenue and Courier Company Employers, Revenue state:

“As you are aware, the Department of Social Affairs Appeal’s Office have decided that a motorcycle courier who provided his own equipment

and was engaged under the standard courier contract was insurable as a self-employed contractor under the Social Welfare Acts. While this decision is not binding on Revenue I propose, as previously stated,

in the interest of uniformity and with a view to bringing the matter to a conclusion to treat couriers as self-employed for tax purposes”

As contradictory statements go, this one is a grade A prize winner. If labelling all workers in an industry as self-employed for 'uniformity'

is not considered prejudicial by Revenue, it begs the question what do Revenue think prejudice looks like?

10.Revenue State:

“Revenue has a strong track record in tackling instances of misclassification of employees as self-employed persons”

Revenue have an abysmal and very long record of ignoring bogus self-employment stretching back to the late 1990s

when the Public Accounts Committee and the C&AG ordered Revenue to carry out wide scale investigations into the construction industry which uncovered cira 20% bogus self-employment rate.

It was estimated at the Oireachtas SW Committee in 2019 that the current bogus self-employment rate in construction is now in excess of 20% leading to an annual loss to the exchequer of circa a quarter of a billion euro.

Other areas, most notably media, have come to the attention of the PAC where bogus self-employment has proven to be rife for many years without any ‘tackling’ of instances by the Revenue Commissioners.

The estimated loss in PRSI and taxes lost to the exchequer by Revenue’s failure to tackle bogus self-employment is estimated to be in excess of 1 billion euro annually. The reasons why this has been allowed to persist for many years by Revenue

is quite obvious in this thread, Revenue make political determinations on employment status, not legal ones.

Bogus self employment is fraud, the Revenue Chairman's deliberately misleading reply to the PAC proves that @RevenueIE is deliberately and maliciously, perpetrating

@RevenueIE a massive fraud on the Irish taxpayer.

In 2019 I called on the Oireachtas Committee on Bogus Self Employment to notify An Garda Siochana about this fraud. This remains my position today.

That's it, thank you.

@RevenueIE @threadreaderapp unroll please