Neale Richmond (Dublin Rathdown, Fine Gael)
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257. To ask the Minister for Finance the status of the review of flat rate expenses being carried out by the Revenue Commissioners; if this review has been impacted by Covid-19; if the Revenue Commissioners can be instructed to not alter tax credits for frontline workers including teachers, shop assistants and other sectors that have made a huge contribution to the fight against the virus on behalf of the public; and if he will make a statement on the matter. [28151/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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Revenue conducted a comprehensive review of the administratively-based Flat Rate Expenses (FRE) regime in 2018 and 2019. Revenue has advised me that the purpose of the FRE review, which involved engagement with relevant representative bodies, was to ensure that the expenses granted to each employment category remain justified and appropriate to modern day employments and work practices.

Each category of FRE allowance was examined separately in the light of the legislative requirements of section 114 of the Taxes Consolidation Act (TCA) 1997, which provides that expenses are tax deductible only if they are wholly, exclusively and necessarily incurred by the employee in the performance of the duties of his or her employment and are not reimbursed by the employer.Where the FRE amount does not meet the legislative basis for tax deductibility or can no longer be justified, it cannot be expected that FRE amount will be retained.

Outside of the FRE regime, all employees retain their statutory 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.

Revenue agreed to defer the implementation of any planned changes to the FRE regime, pending the outcome of an examination of a number of policy issues that arose during its review relating to the tax deductibility of expenses of employment. This latter examination was carried out by the Tax Strategy Group (TSG), which is overseen by my Department and which met on 10 September 2020. A TSG paper that sets out the consideration of the policy matters that arose during Revenue's FRE review has now been published as part of the regular Budget process. It is available online at .

Given that the deliberations on the policy matters set out in the TSG continue, it would not be unexpected that any changes to the FRE regime might await the outcome of those deliberations. Similarly, the question of the timing of the introduction of any changes to the FRE regime is solely a matter for Revenue.

Neale Richmond (Dublin Rathdown, Fine Gael)
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258. To ask the Minister for Finance if he will consider increasing the working from home allowance for the winter months given the costs of heating and so on will be greater during these months; and if he will make a statement on the matter. [28155/20]

Joe Carey (Clare, Fine Gael)
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282. To ask the Minister for Finance the factors he is considering in creating a tax allowance or credit for those remote working either at home or an alternative location; and if he will make a statement on the matter. [28760/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 258 and 282 together.

The 2020 Programme for Government: Our Shared Futurecontains several commitments related to working from home, including an examination of the “feasibility and merits of changing tax arrangements to encourage more people to work remotely”, the responsibility for which falls to my Department. There is also a commitment to the development of a ”national remote working strategy” and to that end, a Remote Working Strategy Inter-Departmental Group has been established. Officials from my Department are included in this group which is chaired by the Department of Business, Enterprise and Innovation. A number of issues are being considered as relevant to these commitments, the results of which will be made public in due course.

In terms of the current tax treatment of the costs associated with working from home, I would note that any such costs incurred wholly and exclusively for the purposes of the business by an employer (for example, the provision of equipment) may be deducted by the employer in the normal course of calculating the tax liability of their business.

From the perspective of the individual employee, there is no specific tax credit available to employees where they work from home. The consideration of the introduction of any such credit would need to balance a number of factors including issues of equity, noting that not every worker is able to work remotely or from home for a variety of reasons including the nature of their work and also the nature of their home environment.

However, I am advised by Revenue that where e-workers incur certain extra expenditure in the performance of their duties of employment remotely or from home, such as additional heating and electricity costs, there is a Revenue administrative practice in place that allows an employer to make payments up to €3.20 per day to such employees, subject to certain conditions, without deducting PAYE, PRSI, or USC.

Revenue have confirmed that PAYE workers using their primary residence as a workplace during Covid-19 restrictions qualify as e-workers for the purposes of this practice.

Revenue also advise that the provision of equipment, such as computers, printers, scanners and office furniture by the employer to enable the employee work from home will not attract a Benefit-In-Kind charge, where the equipment is provided primarily for business use. The provision of a telephone line, broadband and such facilities for business use will also not give rise to a Benefit-in-Kind charge, where private use of the connection is incidental.

Where an employer does not pay €3.20 per day to an e-worker, I am advised that employees retain their statutory right to claim a deduction under section 114 of the Taxes Consolidation Act (TCA) 1997 in respect of actual vouched expenses incurred wholly, exclusively and necessarily in the performance of the duties of their employment. PAYE employees are entitled to claim costs such as additional light and heat in respect of the number of days spent working from home, apportioned on the basis of business and private use.

PAYE workers can claim e-working expenses by completing an Income Tax return at year end. Revenue advise that the simplest way for taxpayers to claim their e-working expenses and any other tax credit entitlements is by logging into the myAccount facility on the Revenue website.

Finally, I am advised that Revenue have published detailed guidance on e-working arrangements in their Tax and Duty manual TDM 05-02-13 e-Working and Tax.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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259. To ask the Minister for Finance his plans to increase the dependent relative tax credit in line with the incapacitated child tax credit as requested by an organisation (details supplied); and if he will make a statement on the matter. [28243/20]

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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260. To ask the Minister for Finance if eligibility for the home carer tax credit will be extended to include single working carers; and if he will make a statement on the matter. [28244/20]

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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261. To ask the Minister for Finance his plans to allow carers to claim tax relief on the cost of employing a care worker while also claiming the dependent relative incapacitated child tax credit; and if he will make a statement on the matter. [28245/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 259 to 261, inclusive, together.

Consistent with the Programme for Government: Our Shared Future, it is not the intention to increase the value of income tax credits or bands in Budget 2021.

However, the Deputy has raised three separate but related issues regarding important measures in the tax code which support caring for people in vulnerable circumstances.

In relation to the suggestion to extend eligibility for the Home Carer Tax Credit to include single workers, I would note that this credit was specifically introduced in Finance Act 2000 in the context of a planned move to full individualisation of the Irish income tax system to ensure a balance was maintained for married one-income families where one spouse works primarily in the home caring for children, the aged or incapacitated persons. The Home Carer Tax Credit is therefore only available to jointly assessed couples in a marriage or civil partnership, and it is not available to single persons as the issues that the credit sought to address do not arise in their circumstances. Instead, the Single Person Child Carer Credit of €1,650 (and an increased rate band of €4,000) is available to single parents (whether widowed, separated, deserted or a single parent) with caring responsibilities for a dependent child who is under 18 years or, if over 18, is an incapacitated child who satisfies the incapacitated child tax credit criteria.

As regards the question of claiming tax relief on the cost of employing a care worker while also claiming the Dependent Relative or Incapacitated Child Tax Credit, the position is that there is no restriction on this and that such tax relief is available at the individual’s marginal rate of tax. However, there is an anti-avoidance provision in the legislation which prohibits claiming dependent relative or incapacitated child tax credits in respect of a person where that person is employed as the carer.

On the proposal to increase the Dependent Relative Tax Credit to the same level as the Incapacitated Child Credit, each of these credits is targeted at different issues and different personal circumstances and as a result are set at different levels:

- The Dependent Relative Tax Credit is a modest tax credit of €70, which can be claimed by an individual who maintains, at his or her own expense, a relative who is unable to maintain himself or herself.

- The Incapacitated Child Tax Credit is a tax credit of €3,300, which can be claimed by a person in respect of a child who is permanently incapacitated either physically or mentally from maintaining himself or herself and had become so before reaching 21 years of age or finishing full-time education. The person must either be the parent of the child, have custody of the child or maintain the child at their own expense.

If the Dependent Relative Tax Credit was increased some 47-fold by €3,230 to €3,300 it is estimated to cost an additional €194m in a full year. The values of the credits have been set at levels that are intended in part to reflect the economic burden that arises from the condition of the person being cared for, as well as the resources available to pay for their care.

Finally, it is noted that these credits apply in addition to other various supports from other parts of Government, including the Department of Social Protection, the Department of Health and the Department of Children, Disability, Equality and Integration, that assist those with caring responsibilities.