Pearse Doherty (Donegal South West, Sinn Fein)
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76. To ask the Minister for Finance if he will provide a breakdown by individual category of flat rate expenses; and their total cost to the Exchequer in tax reliefs in the last available tax year. [22010/13]

Michael Noonan (Limerick City, Fine Gael)
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The position is that tax law provides that employees and office holders may claim a tax deduction in respect of: (a) the cost of travelling expenses necessarily incurred in the performance of the duties of their employment or office; and (b) the cost of other expenses incurred wholly, exclusively and necessarily in the performance of the duties of their employment or office.

As regards an expenses claim under (b) above, I understand from the Revenue Commissioners that, in strictness, each employee or office holder should submit his or her individual expenses claim to Revenue. However, by way of long standing practice stretching back over 40 years, the expenses deduction due for certain categories of employee are, for administrative ease, agreed between Revenue and the relevant representative bodies. These agreed rates of expenses are granted to individuals in their determination of tax credits for PAYE purposes and have become known as “flat rate expenses”. The Revenue Commissioners publish such agreed flat rate expenses on their website at http://www.revenue.ie/en/tax/it/employee-expenses.html

Therefore, some employees obtain their statutory tax deduction in respect of expenses via the administrative “flat rate expenses” regime whilst others obtain their tax deduction on foot of an individual claim submitted to the Revenue Commissioners.

I am informed by the Revenue Commissioners that the cost to the Exchequer of the tax deduction in respect of expenses (other than expenses of travel and subsistence) incurred by employees for the income tax year 2010, the most recent year for which final information is available, is estimated at €66.5 million.