The Irish Independent reports that homeowners already struggling with their mortgage repayments have been dealt a new blow by the taxman.

Revenue officials have ordered banks to stop mortgage interest relief for households more than six months behind on their payments.

The relief is worth up to €4,000 a year for a couple in cases where both partners are named on the mortgage.

Now fears are mounting that thousands of households will be denied the tax relief, which can substantially lower monthly repayments, especially for those who bought during the boom. Around 65,700 residential mortgage accounts are six months or more in arrears.

A spokeswoman for the Revenue Commissioners told the Irish Independent that where no payments have been made on a mortgage for six months or more the taxman has now ordered that the valuable mortgage tax relief be removed.

"Where no payments have been made for six months, the relief is ceased," the spokeswoman said.

"In the event of resumption of payments, then the relief can be restored following three consecutive payments."

Mortgage tax relief is a payment made to the banks of mortgage holders who qualify. It goes to the lender, with the bank then using the money to reduce the monthly payments.

Around 350,000 households are getting the relief. Those who meet the criteria and buy a house will still qualify for it if they buy before the end of this month. The relief lasts seven years.

A couple with a €300,000 mortgage on an interest rate of 3.5pc could be getting €2,100 in relief a year. For bigger mortgages, the relief that can be claimed is capped at €4,000.

Last year, the Government gave extra mortgage tax relief to those who bought during the boom, with the additional relief worth up to €2,000 a year.

But now Revenue has written to all mortgage lenders telling them to take the relief off of anyone who has not paid their mortgage for six months or more.

A spokeswoman for Revenue said: "In light of increasing non-payment or arrears of mortgage payments, and to protect the Exchequer where clearly eligibility no longer exists, Revenue advised lenders in October that relief should be calculated by the interest-paid method only."

This means tax officials will only allow the relief for mortgage holders who are paying the interest on their home loan.

Until recently, it was enough for a mortgage holder to be charged interest on their mortgage to qualify for tax relief.

Distress

Consumer advocate Brendan Burgess questioned if it was worth Revenue's while to go after people who the tax officials regarded as no longer entitled to mortgage interest relief.

Mr Burgess, who founded the www.askaboutmoney.com website, said not all of those who were six months or more in arrears would lose their mortgage interest relief.

This is because those who missed six months of payments may have since reached a deal with their bank to pay back some money each month.

Paul Joyce of the Free Legal Advice Centres (FLAC), an organisation that helps people in mortgage distress, said the Revenue move was a new blow to struggling homeowners.

"This is another nail in the coffin for those who are finding it hard to meet their mortgage payments," he said.

Only those who have struck a deal with their bank on repaying some money, and hold to the arrangement for a year, will now qualify for mortgage interest supplement, said Mr Joyce.

Meanwhile, Permanent TSB is caught up in nearly 500 legal cases involving troubled mortgage holders.

The bank has told the Department of Finance that most of the cases relate to "debt recovery" and enforcement.

The figures only cover cases currently active, and do not include cases that have been settled.

The Irish Independent also reports that the former Anglo Irish Bank has been hit with a barrage of legal cases from former clients of its private client unit, the Irish Independent has learned.

The cases relate to the arm of the bank that put together syndicates of wealthy individuals and families to invest in major commercial property deals during the boom.

As well as assembling the investors, Anglo provided loans to finance the deals and in some cases even bought properties to sell to its own clients.

Legal papers linked to more than a dozen separate actions have been filed at the High Court over the past two months, naming Irish Bank Resolution Corporation (IBRC) Assurance as defendant.

While IBRC is the new name for Anglo, the Irish Independent understands that the cases relate to actions allegedly taken by the bank before it was nationalised.

IBRC Assurance is part of the state-owned bank's wealth management business which was involved in selling properties worth billions to groups of wealthy Anglo customers.

The "Assurance" was the part of the unit set up to handle investments made by the self-administered pension funds of wealthy clients. It is separately regulated by the Central Bank.

The timing of the recent spate of cases is driven by a statute bar that means legal action cannot be taken against the bank more than six years after an investment was originally sold.

Sour

It means unhappy investors who invested in late 2006 deals must file papers now or lose the right to sue.

The cases are understood to be mainly at an early stage and may not reach the courts for more than a year.

The bulk of the recent High Court papers have been filed on behalf of clients by two firms of Dublin solicitors, O'Grady Solicitors in Ballsbridge and LGK Ballagh in Glasthule.

Both firms declined to comment on the actions, as did a spokesman for IBRC.

During the boom the Anglo unit set up as many as 50 funds to invest in property deals, many of which have gone sour.

In one high-profile case clients of Anglo invested close to €100m of the €390m used to buy the Woolgate Exchange office block in London.

Their investment was wiped out when the office block was sold for €330m earlier this year. The bank managed to claw back some of its own losses when it sold a loan backing the deal to the new owners.

Of the current batch of actions, it is thought that a number relate to cases where Anglo bought property in its own name then sold the assets to private banking clients who were provided with loans to finance the deals.

High net worth clients of the assurance unit typically invested €1m to €2m to participate.

It means some clients have seen their investments wiped out because of falling property prices, but they remain on the hook for loans to IBRC.

The Irish Times reports that the Government was subjected to an intense lobbying campaign by the pharmaceutical industry earlier this year over a HSE decision not to approve for payment new drugs and medicine.

Taoiseach Enda Kenny was warned the decision could have implications for 25,000 jobs and future investment.

Early this year, the HSE decided not to reimburse new drugs that had passed all regulatory stages and were becoming available for use in patients. They included drugs for treating skin cancer and cost up to €85,000.

In correspondence with Mr Kenny, up to 20 multinational drug firms claimed that the HSE move was portraying Ireland negatively and could have “unintended consequences” for Ireland.

The details have emerged against a backdrop of continuing controversy over the price of medicines and Government efforts to curb costs, including the cost of drugs. A recent survey found that the cost of some medicines here is among the highest in the world.

Price referencing

It has also emerged that the price paid for drugs in Ireland is of critical importance for pharmaceutical companies as it influences the price in many other countries, both within and outside the EU, as part of an international price-referencing effect.

Earlier this year the HSE argued that no specific budget had been provided to it to pay for the cost of new drugs and medicines coming on the market after approval.

However, the multinational drug companies argued that a ban on reimbursing new drugs by the HSE represented a breach of a supply agreement with the State.

In June Minister for Health James Reilly reached an interim deal with the pharmaceutical industry that involved reductions in the price of certain off-patent medicines. He claimed this could save up to €20 million in a full year.

As a condition of the agreement the HSE was obliged to add to its list of items for reimbursement “drugs which in the normal course of events would have been approved under its schemes”.

In effect, this meant that the HSE could not refuse to pay for drugs for financial reasons.

In October the Government secured a full agreement with the pharmaceutical industry which it said could generate €400 million in savings over three years. In return for making price concessions, the pharmaceutical companies reinforced the principle that new medicines will be approved under the HSE’s drug schemes once they have been proven to be cost effective.

Strong representations

However, new documents released by the Government show that Mr Kenny received strong representations on the cuts by leading pharmaceutical companies. The letters had been written in February and March and many struck a similar tone.

In one, the president of Eli Lilly, John C Lechleiter, was concerned that “your Government’s recent decision not to reimburse new medicines puts at risk this aspiration and portrays Ireland negatively to inward investors such as Lilly”.

Mr Lechleiter pointed out that Lilly employed more than 700 people in Ireland in two manufacturing sites. “I believe further price cuts and a blanket ban on reimbursement of new medicines could have a number of unintended consequences for the wider Irish economy.”

The chairman of Johnson and Johnson, William C Weldon, told Mr Kenny in a letter: “When new medicines are scientifically and independently judged to be of value and improve health outcomes, it is imperative that they are made available to Irish patients.”

The Irish Times also reports that the tax reliefs for the Irish film and television industry are inefficient and too generous towards wealthy investors, a Government report has stated.

The economic impact assessment carried out by the Department of Finance found it would be a third cheaper for the exchequer to simply give money to productions than continue with the present section 481 arrangement.

The report said it would be better to fund productions by means of a tax credit paid shortly after a minimum level of expenditure was complete.

In the budget, Minister for Finance Michael Noonan said the section 481 reliefs would be extended to 2020, but from 2016 would be changed to a tax credit model. He said investors were receiving a disproportionate amount of tax relief.

Substantial returns 

The report found a third of money that could be going to productions was going to financiers who organised section 481 reliefs and in profits to investors.

Investors, who could write up to €50,000 off against tax by investing in section 481 schemes, were receiving substantial returns on minimal-risk investments.

In one case cited, an investor made a return of 23 per cent in just 10 weeks, having invested €16,150 in a production while borrowing twice as much on a short-term basis from a bank.

Three quarters of investors had income in excess of €100,000. The report said allowing high-income individuals to shelter money in this way was contrary to Government policy to abolish such shelters.

At present, section 481 reliefs cost the State €46.1 million a year in lost revenue. Producers receive about two thirds of this, or €32 million; a third goes in fees and profits to investors.

The report states that if the producers’ €32 million came straight from the State, it would amount to a net saving to taxpayers of €14.1 million in a single year. Under the current system, a production company can raise up to 22 per cent of the total cost of a production through section 481 reliefs.

Individuals can write off €50,000 against tax as an expense, saving €20,500 at a rate of 41 per cent. It amounts to a net cost to the investor of €29,500. The investor can usually expect to get the €29,500 back once the film is completed, plus a small net profit.

Tax credit model 

Element Pictures producer Andrew Lowe said the typical return was €4,500 for a €50,000 investment, or 9 per cent.

He said the crucial factor in any tax credit model was that the money was available up front. Otherwise production companies would incur costs in borrowing it from a bank.

Irish Film Board chief executive James Hickey said the Government’s willingness to listen to the film industry and act in its best interests was evident in its commitment to the tax credit plan.

On the same day the Government announced the budget here, the UK chancellor of the exchequer George Osborne announced that high-end television programmes there would receive a 25 per cent break which might hit Ireland’s attractiveness as a location for British television productions.

Mr Hickey said it was important that whatever tax relief was brought in was competitive.

“The Government is very conscious of the need for us to be competitive against other jurisdictions,” he said.

The Irish Examiner reports that Banks are being accused by Isme of adopting "cynical delaying tactics" in the way the financial institutions are handling loan applications.

Isme, the Irish small and medium enterprises association, is furious after analysing its latest Quarterly Bank Watch Survey which shows a decline in lending to SMEs. The survey found the 53% of businesses are being refused loans, four points worse than the figure in September.

Isme chief executive, Mark Fielding, said the demand for bank credit is steady at 39%.

"The delays by cynical bankers has coined a new phrase, ‘constructive refusal’ as they treat the customer with disdain and hoodwink the Government with continuing distorted statistics.

"There is no doubt that banks are not lending to the level appropriate to an economy ‘on the mend’. The statistics from our own Central Bank, the ECB and numerous economists demonstrate the dearth of appropriate credit. We must put an end to the fiction that bailed-out Irish banks are functioning properly. Despite assertions from the banking PR machine, access to credit is abysmal, the application process is getting more torturous and businesses are not being told their rights under the code," he said.

Among the main findings of the survey were:

* 53% of companies who applied for funding in the last three months were refused credit by their banks, a deterioration on the 49% in the previous quarter.

* 39% of respondents had requested additional or new bank facilities in the last three months, showing an increase from the 38% in the previous quarter.

* 28% of initial bank decisions were made within one week; however the average wait was four weeks.

* 65% of firms state banks are making it more difficult to access finance, down from 72%.

* 5% of SMEs believe Government is making a positive difference to SME lending.

* 46% of respondents had increases in bank charges imposed, as banks revert to "old habits".

Mr Fielding said it is disappointing in the extreme that, after all of the bailing out and cosseting of banks and bankers, the main rescued banks are not stepping up to the plate.

"The Government, in last week’s budget, acknowledged the importance of the small and medium-enterprise sector and introduced measures to assist. The Government must now demand that the bailed-out banks meet their own commitment to SME lending," he said.

The ISME boss said the Government must stop merely acknowledging that we have a banking problem and act decisively.