Parliamentary Question for the Minister for Finance (Michael Noonan TD)
For WRITTEN ANSWER on 21/01/2014
To ask the Minister for Finance the reason a person deemed to be self-employed as they work for their own limited company receives less of a tax credit than other employees of the same company; and if he will make a statement on the matter.
Reply
I assume that the Deputy is referring to the disallowance of the employee tax credit (more commonly known as the PAYE tax credit) to a director who works for his or her own company.
Section 472 of the Taxes Consolidation Act 1997 provides for a tax credit known as the employee tax credit to an individual who has emoluments to which the PAYE system of tax deduction at source applies. However, the section prohibits the granting of this tax credit against the PAYE tax due on a director s emoluments from his or her own company where the director owns or controls, directly or indirectly, more than 15% of the ordinary share capital of the company. Such directors are deemed to be effectively self-employed notwithstanding that they are remunerated via the company payroll.