The Irish ProShare Association welcomes the recent decision by the Minister for Finance, Paschal Donohoe (pictured above), to prescribe Yorkshire Building Society and Barclays Bank as qualifying savings institutions in Ireland.
Both UK banks have been prescribed by Ministerial Order under paragraph (i) of the definition of ‘qualifying savings institution’ in section 519C(1) of the Taxes Consolidation Act 1997 (No. 39 of 1997).
As many as 10,000 Irish workers hold Save As You Earn (SAYE) company share scheme savings accounts at YBS or Barclays. Neither bank holds an Irish banking license but are able to provide banking services under EU financial passporting regulations. Financial passporting for UK banks and financial institutions will cease when the Brexit transition period ends on 31st December, unless there is a trade deal.
Central Bank of Ireland regulations stipulate that customers must be given a minimum of two months’ notice should a bank need to close their accounts.
The Ministerial Order signed by Paschal Donohoe means that YBS and Barclays will be able to continue administering the SAYE accounts of employees of Irish companies even if the UK crashes out with no deal. Whatever the result of the ongoing trade negotiations between the EU and UK, employees’ savings with Barclays and YBS will continue to be protected by the UK’s deposit guarantee scheme, the Financial Services Compensation Scheme (FSCS), up to a total of £85,000.
IPSA first alerted the Department of Finance to the threat Brexit posed to Irish SAYE savers with UK accounts more than three years ago. IPSA chair Eleanor Cunningham said: “This move is very welcome and will come as a great relief for thousands of Irish workers whose SAYE accounts would have been closed down if the Government hadn’t acted.
“SAYE schemes are designed to allow employees at all levels of a business to share in the financial success of the company they work for. Savers are mostly employees on regular salaries who typically use a SAYE scheme as a means to help afford a house deposit, extension, new car, or holiday.
“Brexit meant that these employees, through no fault of their own, faced missing out on the financial benefits they were due by investing in good faith in a Revenue-approved tax-efficient company share scheme.
“This Ministerial Order means that YBS or Barclays can continue to administer their account for the term of their SAYE scheme. However, neither institution will accept new accounts, which means that Ulster Bank remains the only Irish-licensed bank to provide SAYE accounts. This raises issues about lack of competition in the market and the viability of the popular SAYE scheme unless another bank starts providing SAYE accounts.”