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Open Letter to An Taoiseach, Enda Kenny, TD – Episode 2

10th December 2014.

(EPISODE 2, Discrimination – the reasons)

Dear Taoiseach,

“I have a dream”
Discrimination – the reasons.

You may remember that I wrote to you on 26th November about discrimination against us, the self-employed, in the Tax Code, where we pay anywhere between 8 times and 11% more tax than our employed colleagues.
Just in case nobody explained the reasons to you, I’ll set it out here.

Employees are entitled to claim an additional tax credit (currently €1650). The credit is not available to us or our spouses or civil partners, if we pay them. This alone means self-employed pay €32 per week more than employees.

This allowance was introduced way back in 1980 by the Minister for Finance, Michael O’Kennedy to compensate employees for inflation of 18% at that time and paying tax immediately while self-employed paid up to a year later. This no longer applies, as self-employed are now assessed on their current year’s income and actually pay in advance. So Taoiseach, you know and I know the reason for this PAYE allowance no longer applies.

Now on top of the extra tax, the self-employed suffer a minimum charge of €500 PRSI and pay 4 per cent of our income; employees pay no PRSI if their income is under €352 per week and a percentage thereafter.

As you can see, the discrimination against us self-employed taxpayers is more extreme at the bottom of the income scale, which is what economists call regressive.

Taoiseach, not alone is the system discriminatory but it’s regressive. There is a very strong case for changing this unfair treatment of self-employed, particularly those on low incomes and, as you will know, most of us in start-ups take very little by way of income in the early years.

Once again, I ask you to stop the discrimination against us, the self-employed, who in turn employ thousands
Yours faithfully,