asked the Minister for Finance whether he is aware that FCA officers have recently received communications from the inspector of taxes demanding certified statements of earnings received while on FCA training for all years ending 6 April 1980 and the reasons why such demands are made at the present time in the light of the fact that all such officers incur far greater expense during the course of their voluntary duties than the amount of gratuity or payment received by them.

This matter has recently been brought to my attention and I have been in touch with the Revenue Commissioners about it. The position is that FCA officers receive two kinds of payments:—

(a) a gratuity in compensation for expenses incurred and

(b) payments for annual training and for any security duties performed.

The gratuity is not chargeable to tax but the other payments are of the nature of emoluments and, as such, are liable to tax. If the gratuity covers the expenses incurred by the officer he could not be given further compensation for those expenses by way of a deduction in computing the tax due on other payments made to him.

If, however, expenses in excess of the gratuity payment are incurred by any officer particulars should be supplied to his inspector of taxes to enable such additional relief as may be due under the Income Tax Acts to be given.

It may be added that, if an officer is aggrieved by the decision of the inspector, he is entitled to appeal against that decision to the Appeal Commissioners.

Inspectors of taxes must from time to time issue requests for information to persons in receipt of income which is properly chargeable to tax.

Does the Minister realise the effect on the morale of the force this recent drive by the Revenue Commissioners has had?

Since 1976, when legislation was introduced to enable PAYE to be applied to payments from public service sources, tax has been deducted from whole-time FCA personnel and those engaged on continuous security duty. In cases of this nature the Revenue Commissioners are supplied annually with particulars of payments made by the Department of Defence and in March 1977 they began the preparation of lists of people the Deputy is referring to. That is the position.

Would the Minister accept that the normal situation is that an FCA officer does two weeks summer or winter training? I served in the FCA for 21 years and can speak from personal knowledge. Such an officer for the rest of the year is incurring considerable expense for which he gets no payment. It should be accepted that any FCA officer who is merely getting a gratuity and two weeks emolument for annual training has no net benefit. Would the Minister accept that this is a fair and reasonable approach leaving out those who are on semi-regular duty? Would the Minister accept as a principle that such persons should not be hounded by the Revenue Commissioners? They are doing enough for the nation without getting that in response.

I explained the position that the preparation of these lists began in March 1977. I said in my reply that gratuities are exempt, that it is the other payments that may be calculated. I also understand that in practice no account is taken by the Department of Defence of payments less than £250. A direction is being issued from the Revenue Commissioners that individuals who appear on Department of Defence lists will not be pursued for any years prior to their appearance on this list and sympathetic consideration will be given to the circumstances if back years payments are looked for.

Will the Minister agree to issue a further directive?

The Minister has no power to issue those kind of directives.

Would the Minister agree in principle that a member of the FCA who is merely getting a gratuity and a two week emolument for annual training should not be hauled into the tax net? Would the Minister accept that as a general principle?

In case the Deputy gets the wrong impression, I said that the Revenue Commissioners had issued a directive. I did not say the Minister had. The Minister does not have that kind of power. The gratuity is exempted. The question of the emoluments goes back to the presentation in March 1977 by the Department of Defence to the Revenue Commissioners of the amounts of payments in such cases. Any sums less than £250 are not reported to the Revenue Commissioners.

The Minister will polish off the FCA.

It started in March 1977. That is a significant date.