Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I am advised by Revenue that the effective date for implementation of the changes referred to by the Deputy is being deferred to 1 January 2020. The intention is that Revenue will have completed the comprehensive review of all flat rate expenses by that date. As such, this approach will ensure that changes to the flat rate expenses regime do not impact on any specific group earlier than the rest. I also understand that Revenue will be in contact with the relevant representative bodies in this regard. However, it is important to be clear that there has been no change to the general rule set out in legislation that all employees are entitled to claim a deduction under section 114 of the Taxes Consolidation Act 1997, or TCA, in respect of an expense incurred wholly, exclusively and necessarily in the performance of the duties of their employment to the extent that the expenses are not reimbursed by the employer. This means that all employees remain entitled to claim deductions for valid and specific expenses incurred.

Revenue is independent in the administration of the tax code and the flat rate expenses regime is an additional concessionary practice operated by Revenue where both specific commonality of expenditure exists across an employment category and the statutory requirement for the tax deduction, as set out in section 114 of the 1997 Act, is satisfied. The purpose of the regime is to simplify administration where the specific legislative criteria are met and help both the taxpayer and Revenue by making it easier for large groups of employees working in the same sector to avail of their entitlement to tax relief in respect of expenses incurred in the performance of their employment duties. Earlier this year, Revenue commenced a comprehensive review of flat rate expenses to ensure the expenses are still justified and appropriate to modern day employment and work practices given the historical nature of the practice and having regard to changes in employment circumstances, regulations and work practices across employments.

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