Alan Kelly (Tipperary, Labour)
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157. To ask the Minister for Finance if he has announced, or his plans to announce, changes to capital gains tax or capital acquisitions tax regarding solar panels on farmland as part of budgetary measures; and if he will make a statement on the matter. [46658/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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Finance Act 2017 amended sections 598 of the Taxes Consolidation Act 1997, and section 89 of the Capital Acquisitions Tax Consolidation Act 2003 to allow that the leasing of agricultural land for solar energy production may be considered qualifying agricultural activity for CGT retirement relief and CAT agricultural relief. These measures apply to disposals made on or after 1 January 2018 where 50 per cent or less of the total area of the leased land was used for that purpose.

As such CGT retirement relief and CAT agricultural relief currently provide for solar panels on agricultural land to be considered qualifying assets if the relevant conditions of the respective reliefs are met.

Pearse Doherty (Donegal, Sinn Fein)
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158. To ask the Minister for Finance the changes in flat rate expenses to take effect from 2019; the number of workers affected; the savings expected to accrue; and if he will make a statement on the matter. [46473/18]

David Cullinane (Waterford, Sinn Fein)
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164. To ask the Minister for Finance if flat rate expenses allowances for shop assistants have been withdrawn for 2019; the reason for the decision; and if he will make a statement on the matter. [46552/18]

Catherine Martin (Dublin Rathdown, Green Party)
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169. To ask the Minister for Finance the reason flat rate expenses (details supplied) have been removed; and if he will make a statement on the matter. [46683/18]

Catherine Martin (Dublin Rathdown, Green Party)
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170. To ask the Minister for Finance the expected saving from removing flat rate expenses (details supplied); and if he will make a statement on the matter. [46684/18]

Catherine Martin (Dublin Rathdown, Green Party)
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171. To ask the Minister for Finance the changes to flat rate expenses by the Revenue Commissioners at all grades made in 2018; and if he will make a statement on the matter. [46685/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 158, 164 and 169 to 171, inclusive, together.

The legislation governing the deductibility of expenses incurred in employment is set out in section 114 of the Taxes Consolidation Act 1997 (TCA), which provides that for an expense to qualify as a deduction against income from an office or employment, the expense must be wholly, exclusively and necessarily incurred in the performance of the duties of the office or employment.

Revenue have advised that they operate the flat rate expense regime on a concessionary basis. They do so where both a 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 TCA is satisfied, namely, the expenses to be covered by the flat rate amount are wholly, exclusively and necessarily incurred in the performance of the duties of the office or employment.

The flat rate expense is agreed following engagement between Revenue and the relevant representative body for the particular group of employees who incur the same expense. This regime developed incrementally over the last 40 to 50 years, and currently incorporates some 53 employment categories covering broadly 134 individual flat rate expenses. A primary advantage of this regime is that it provides an efficient and transparent mechanism for a significant number of PAYE workers (over 536,000 in 2018), who incur a similar expense in the course of their employment duties, to obtain tax relief in respect of the expense without having to submit annual claims to Revenue. It also gives rise to efficiencies for Revenue by reducing the administrative cost of processing large volumes of identical claims for similar groups of employees.

Given the historic nature of some of the flat rate expenses and having regard to changes in employment circumstances, regulations and work practices across employments, Revenue commenced a comprehensive review of flat rate expenses this year. The purpose of the review, which is in line with best practice and good corporate governance, is to ensure the expenses agreed are still justified and appropriate to modern day employments and work practices and are in accordance with the legislative requirement for deduction as set out in section 114 of the TCA. Arising from the review, there may be an adjustment to the quantum of particular flat rate expenses. The flat rate amount may be increased or decreased or it may be withdrawn by Revenue where the continuation is no longer justified.

The flat rate expense categories initially selected by Revenue for review in 2018 were based on a combination of two factors, the quantum in terms of number of claimants and the value. Revenue advised that they will continue their work in this area during 2019, and any revision to a flat rate expense will be communicated to the relevant representative body involved in the review process. It will also be communicated by Revenue by way of update to the relevant Tax and Duty Manual, which is available on the Revenue website.

The flat rate expense for shop assistants was included in the current review. Revenue have advised that this flat rate expense is now to be withdrawn as they are satisfied that the legislative basis underpinning tax relief for expenses does not justify its continuation. For 2018 there were 75,822 recipients of this particular flat rate expense of €121, which gives rise to a total gross value of €9.1 million.

I am advised by Revenue that the flat rate expense categories listed in the table below will be withdrawn with effect from 1 January 2019. It is not possible for Revenue to accurately quantify the tax saving/cost associated with this withdrawal as it depends on the particular circumstances of the individual recipients.

Revenue have advised that, outside of the flat rate expenses regime, all employees retain their right to claim a deduction under section 114 of the TCA 1997 in respect of an expense incurred wholly, exclusively and necessarily in the performance of the duties of their employment, to the extent which the expenses are not reimbursed by the employer.