Dáil Éireann Debate, Tuesday - 27 November 2018
180. Deputy Éamon Ó Cuív asked the Minister for Finance the estimated number of PAYE taxpayers eligible for the flat rate expenses tax allowance; the number that claimed the allowance in 2017; the cost to the Exchequer of this allowance in 2017; and if he will make a statement on the matter. [49495/18]
View answerI am advised by Revenue that as flat rate expenses allowances are given as a deduction from employment income, the cost of the allowance at individual level is dependent on not just the amount of the allowance but also the particular tax circumstance of the recipient of the allowance. The cost will vary depending on whether and to the extent that the taxpayer concerned has taxable income and whether such income is taxable at the standard or marginal rate of income tax.
Allowable expenses for employees, including flat rate expenses, are also claimed through different channels depending on the status of the taxpayer. For some employees, the allowances may be carried forward from year to year and applied automatically through the PAYE system at pay roll level. For other employees, particularly those in receipt of non-PAYE income, the allowances may be claimed through the annual income tax returns, the Form 11 (which taxpayers within the self assessment system are obliged to complete) or the Form 12 Return of Income. As the Form 11 or Form 12 returns are not required to be returned until 10 months after the year end, returns for the 2017 tax year were only due in November 2018. Thus, the final position on the cost of flat rate expenses allowances for 2017 cannot be reasonably estimated until full returns data is available and analysed. This will also require analysis of information contained in the 2017 P35 returns by employers of the pay and tax details of employees under the PAYE system, which were due in February 2018. With late filers, processing of returns and parsing of data, Revenue has advised that complete information on expenses for the 2017 tax year will not be available until mid 2019.
Finally, as I have indicated in response to previous questions on this subject, Revenue’s ongoing review of the flat rate expenses regime is expected to be completed by end 2019. With this in mind, in the interests of fairness to all sectors and employees currently benefitting from the regime, Revenue has decided that the effective date for implementation of any changes to particular flat rate expenses categories will be deferred until 1 January 2020. Any revisions to flat rate expenses categories will be communicated to the relevant employee representative bodies involved in the review process.
