Guardian
Ireland may abandon tax exemption scheme for creative writers
Secret talks threaten cultural incentive
Angelique Chrisafis, Ireland correspondent
Saturday June 18, 2005
The Guardian
Ireland, the land of saints, scholars and scribes, still nurtures a guilt complex for banning and exiling its greatest literary names. Joyce, Beckett, Wilde and Shaw all fled its mean-spirited ways. So for the last 35 years, the world’s smallest cultural superpower has consoled itself with a unique act of generosity: writers, artists and composers are spared from paying tax.
But Celtic Tiger Ireland is now being accused of reverting to its old philistine ways as the government consults in secret on whether to scrap the scheme.
Detractors claim that tax-avoiding British writers are taking advantage, and that an elite of millionaire popstars is using it to get rich. The Arts Council is outraged, arguing that Ireland faces losing “one of the most enlightened pieces of legislation ever introduced for the arts in any country”.
The scheme was dreamt up 1969 - the year Beckett won the Nobel prize for literature. It was the brainchild of Charles Haughey, then finance minister, now better known as the disgraced taoiseach who once spent £6,000 of public funds on Parisian shirts and took up to £8.5m in payments from businessmen. Haughey wanted to be seen as a patron of the arts.
All income from a “creative” work such as a novel, play or song would be exempt from tax, he decided. He told the British bestseller writer Frederick Forsyth, who had moved to Ireland and availed himself of the scheme, that his plan was “not so much to bring you bastards in, but to stop the outflow of Irish talent”.
Nevertheless, the tax exemption, which cost the Irish government €37m in 2001, has attracted a long line of British cultural tax exiles. Forsyth, author of The Day of the Jackal, signed up in the 1970s while he drove his white Rolls Royce around county Wexford. The pop band Def Leppard and the singer Lisa Stansfield later moved to Ireland.
The BBC’s world affairs editor John Simpson avoided tax on his book Strange Places, Questionable People while he lived in the exclusive town of Dalkey. DBC Pierre, who won the £50,000 Man Booker prize in 2003 and used the money to pay back a friend he had swindled, lives in a cottage in Leitrim, where his income from novels is tax-free.
But this year’s biggest controversy has been the arrival of the millionaire Scottish author of Trainspotting, Irvine Welsh, who moved to Dublin while his partner studies at university there and immediately signed up for tax-free status on his next book.
“Anybody would agree with a scheme where they don’t have to pay tax,” Welsh told the Guardian, adding that he would not see any benefits until next year. “I didn’t move here for tax reasons, but obviously as a writer I would take advantage of it. I know the scheme is there to keep big entertainers like U2 based in the country instead of losing them to LA.”
Ireland is left guessing as to how much or how little Bono and the members of U2 benefit. But a list of more than 1,000 artists and writers who have claimed tax-free status since 1998, released under freedom of information legislation, has caused sharp intakes of breath.
Cecelia Ahern, daughter of the taoiseach, Bertie Ahern, who received a reputed $1m advance for her first bestseller, is exempt from tax on creative work. So are Sinead O’Connor, Elvis Costello, and the band The Thrills. Also on the list is French writer Michel Houellebecq, who won the world’s richest literary prize, the €100,000 Dublin Impac award, and currently lives in Cork.
Joan Burton of the Irish Labour party said the government had included the writers’ tax breaks in its current financial review as a “smokescreen” to detract from the real issue that the top 400 earners in Ireland paid little or no tax thanks to other more questionable schemes. She said 80% of tax-exempt writers and artists earned less than €50,000 a year and needed to be supported.
Meanwhile, Forsyth, who is portrayed in the Irish press as the symbol of a greedy British writer exploiting Ireland’s generosity, said he had not known about the scheme when he married an Irish woman. “And being a complete fool, I didn’t actually write a book while I was in Ireland so it only saved me a few quid.”
He said the scheme should now be scrapped. Irish writers no longer needed an incentive not to flee to Bohemian London and “if British writers want to avoid tax, they can go elsewhere: the Channel Islands, the Bahamas, Bermuda or the Isle of Man”.
The call of the Emerald Isle
Writers and songwriters whose work is exempt from tax:
DBC Pierre
Winner of the Booker Prize for Vernon God Little in 2003, Pierre now lives in the border county of Leitrim, an increasingly popular hideout for artists and writers. He says he did not move to Ireland only because of tax but has declined to comment publicly on the merits of the scheme.
Michel Houellebecq
The controversial French novelist, who was acquitted of inciting anti-Muslim hatred in France after outspoken comments in a press interview, lived a reclusive life on an island off the coast of west Cork for several years, claiming tax relief on his novels.
Irvine Welsh
The Scottish author of Trainspotting lives in the fashionable Dublin suburb of Ranelagh while his partner studies at University College Dublin. He has vowed to live a more “bourgeois” and “pipe and slippers” life in Ireland.
Alan Warner
A star of the Scottish literary new wave of the 1990s, Warner - a friend of Welsh - has lived in Dublin since 1997. He claimed tax relief on his first book Morvern Callar, which won the Somerset Maugham prize and was adapted for the screen by Lynne Ramsay
Elvis Costello
Born Declan MacManus, Costello grew up in an Irish family in Liverpool and now lives in Dublin. Like other singers, he can only claim tax relief on income from musical compositions, not for his income from performing or touring.
