Dáil Éireann Debate, Wednesday - 16 September 2020
38. Deputy Emer Higgins asked the Minister for Finance the workers eligible for a tax credit for a work uniform; if childcare providers qualify for this tax credit; and if he will make a statement on the matter. [24352/20]
View answerThe flat rate expense (FRE) regime is an administrative practice operated by Revenue to ease the administrative burden on Revenue and on employees in certain sectors by facilitating the automatic granting of a fixed tax allowance to cover allowable employment-related expenses, without the need for annual claims by every employee concerned. It applies where both specific commonality of expenditure exists across an employment category and the statutory requirement for a tax deduction for expenses as set out in section 114 TCA 1997 is satisfied.
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. I am advised by Revenue that a submission was received from Early Childhood Ireland who represent childcare workers in 2017, and having considered the submission, Revenue was not in a position to apply a flat rate expense, as the expenses were not wholly, exclusively and necessarily incurred in the performance of the duties of the employment.
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 that such expenses are not reimbursed by the employer.
