Pearse Doherty (Donegal South West, Sinn Fein)
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203. To ask the Minister for Finance the rationale for the recent change in employment status from self-employed to employees for home-tutors employed by the Department of Education and Skills for children with special needs; the expected effect the change will have; if he will clarify the tax treatment of out-of-pockets expenses, registration fees and so on for these home tutors; and if he will make a statement on the matter. [46689/15]

Michael Noonan (Limerick City, Fine Gael)
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I assume the Deputy is referring to the tax position of home tutors who, prior to September 2015, were paid by parents from grants paid to them by the Department of Education and Skills.  I am advised by the Revenue Commissioners that, in the context of an audit over the last few years, it was determined by Revenue that these home tutors are employed under a contract of service i.e. they are employees.  They are engaged by the parent(s) subject to satisfying criteria specified by the Department of Education and Skills.

As a consequence of the Revenue audit, the Department of Education and Skills agreed to operate the PAYE system on payments to the home tutors.  This facilitates ease of administration, as the payments originate from the Department, and also avoids placing the obligation to register as employer, and administer the PAYE system, on each individual parent.  

With regard to the tax treatment of expenses incurred by home tutors, such expenses are governed by section 114 of the Taxes Consolidation Act 1997.  That section provides that a tax deduction may be given where a tutor is necessarily obliged to incur travel expenses in the performance of the duties of employment or otherwise incurs expenses wholly, exclusively and necessarily in the performance of the duties of employment.