Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

The flat-rate expense allowance regime is an administratively-based practice operated by the Revenue Commissioners 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.

Over the past 18 months, Revenue has been conducting a comprehensive review of the regime. No decision have been made but I understand that the review is nearing conclusion and its expected completion date is before the end of the year. Any potential changes to the regime will not be implemented before 1 January 2020.

Revenue is independent in its performance of its functions under the tax Acts and any changes in practice to the flat-rate expenses regime are, therefore, solely a matter for Revenue. I, therefore, caution against any actions that might be perceived as seeking to undermine the independence of Revenue.

I understand that any withdrawal of the practice can only take place if Revenue is satisfied that there is no longer a legally valid basis to give the concession after engagement with the relevant representative body acting on behalf of the various categories of workers. 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, cognisant of the impact on the individuals concerned.

As Senators may be aware, the Minister for Finance has engaged with Revenue on the matter. Once this process of engagement has been completed, he will be in a position to comment further and, conscious of the timeline involved, he anticipates that he will be able to do so shortly. It would not be appropriate, therefore, for the reasons outlined, to take the recommendation proposed by the Senators.