Dáil Éireann Debate, Tuesday - 8 September 2020
283. Deputy Ged Nash asked the Minister for Finance when the Revenue Commissioners will complete and publish its review of the operation of section 114 of the Taxes Consolidation Act 1997 regarding the deduction for tax purposes for valid expenses incurred in the performance of the employment duties of certain categories of PAYE workers; and if he will make a statement on the matter. [21545/20]
View answerRevenue conducted a comprehensive review of the administratively based Flat Rate Expenses (FRE) regime in 2018 and 2019. Revenue has advised 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 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.
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 to be carried out by the Tax Strategy Group (TSG), which is overseen by my Department. I understand that a TSG paper that sets out the consideration of the policy matters that arose during Revenue's FRE review is likely to be published in the coming weeks as part of the regular Budget process.
