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

I thank Deputy Michael McGrath. This matter has also been raised with me by Deputy Pearse Doherty.

The flat rate expense allowance regime is an administratively-based practice operated by Revenue, where specific commonality of expenditure exists across an employment category and the statutory requirement for a tax deduction for expenses, as set out in section 114 of the Taxes Consolidation Act 1997, is satisfied, namely, that the expense must be wholly, exclusively and necessarily incurred in the performance of the duties of the relevant employment.

This allowance regime eases the administrative burden on Revenue and on employees in certain sectors by facilitating the automatic granting of a fixed tax allowance to cover allowable employment-related expenses, without the need for annual claims by every employee concerned. It is important to note, however, that the regime does not preclude any employee from making an individual claim for a tax allowance in respect of employment-related expenses, where those expenses meet the statutory requirement for such an allowance.

I am advised that a flat rate expense allowance amount is decided following engagement between Revenue and the relevant representative body for the particular group of employees who incur the same expense. The regime has developed incrementally over the past 40 to 50 years and currently incorporates 53 employment categories, broadly covering some 134 different allowances.

Over the past 18 months, Revenue has been conducting a comprehensive review of the regime. I understand the review is ongoing but is nearing conclusion, with an expected completion date by the end of the year.

As the Deputy is aware, the administration of the tax code is a matter for Revenue, which is independent in the performance of its functions. That being said, I expect that Revenue, as it has demonstrated on many occasions, will implement the outcome of its review in its customary proportionate and fair manner.

Having regard to the fact that we are coming closer to the date on which any changes are due to be implemented, I have written to Revenue this week requesting a factual update on the issue. I will revert to the Deputies who have raised the matter with me, with a view to sharing any information received, as soon as possible.

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