Over the past 18 months, Revenue has been conducting a comprehensive review of the administratively based Flat Rate Expenses (FRE) regime. Revenue has advised me that the purpose of the FRE review, which involved engagement with relevant representative bodies, is 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 is being examined separately in the light of the legislative requirements of section 114 TCA 1997, which provides 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.
Revenue has also advised me that its FRE review is ongoing but is now nearing conclusion, with an expected completion date by end year.
As I informed the House during the Report Stage debate on the Finance Bill last week, while I am aware of the effect this will have on those who are impacted by the change, I also need to respect the independence of the Revenue Commissioners. They are, though, keenly aware of the issues and concerns of those that may be affected by the outcome of the review.
Having regard to the fact that we are coming closer to the date on which any changes on foot of the review are due to be implemented, I have, as I committed previously to do, written to Revenue seeking a factual update on the review. Once this process of engagement with Revenue has been completed, I will be in a position to comment further on the matter, and conscious of the timeline involved, I anticipate that I will be able to do so very shortly.