Michael McGrath (Cork South Central, Fianna Fail)
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The legislation governing the deductibility of expenses incurred in employment is set out in section 114 of the Taxes Consolidation Act 1997 (TCA 1997), 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.

I am advised by Revenue that the flat rate expense (FRE) regime operates on an administrative basis. It applies 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 1997 is satisfied, namely, that the expenses are wholly, exclusively and necessarily incurred in the performance of the duties of the office or employment by the employee concerned and that such expenses are not reimbursed by his or her employer.

The FRE regime was established to apply a uniformity of approach to tax deductibility for expenses of large groups of employees and to facilitate ease of administration for both Revenue and employees. The expense should apply to all employees in that category and not be discretionary.

Revenue has advised me that it will consider FRE applications where a large number of employees incur broadly identical qualifying expenses which are not reimbursed by their employer. Applications are generally made by the representative bodies in the employment sectors concerned and are considered by Revenue based on the specific commonality of expenses within the employment category and compliance with the strictly applied statutory requirement for a tax deduction.

As matters stand at present, Special Needs Assistants (SNA's) do not come within the scope of the FRE regime. Revenue has confirmed that a submission was received from a representative body for SNA's some time ago. However, it did not contain specific details of the expenses and costs incurred by SNA's and despite requests from Revenue to provide same, the details to assess such a claim in respect of a specific FRE category was never received. I am further advised, that should Revenue receive a submission from representatives for SNA’s, outlining details of expenses which satisfy the legislative conditions, that it will be considered.

Finally, Revenue advises me that it remains committed to the FRE regime and encourages all taxpayers to avail of their full tax relief entitlements. It should be noted that 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 to which such expenses are not reimbursed by the employer.