I am aware that Revenue remains committed to the FRE process as evidenced by the new amounts introduced to the regime during the past 18 months and it is not a matter of “either/or” as might be implied by the Deputy’s question.
Revenue have confirmed that under section 114 of the TCA, taxpayers have a right to claim a deduction in respect of an expense incurred wholly, exclusively and necessarily in the performance of the duties of their employment through their annual income tax return, provided those expenses are not reimbursed by the employer. It is not proposed that this position will change.
The Flat Rate Expenses regime exists as a support to that right and it provides an efficient and transparent mechanism for significant numbers of employees, who incur a similar expense in the course of their employment duties, to obtain tax relief (in respect of the expense) without having to submit annual claims to Revenue. It also provides efficiencies for Revenue by reducing the administrative cost of processing large volumes of identical claims for similar groups of employees.
Revenue has advised me that the purpose of the review of the FRE regime, which is in line with best practice and good corporate governance, is to ensure the expenses agreed are still justified and appropriate to modern day employments and work practices and are in accordance with the legislative requirement for deduction as set out in section 114 of the Taxes Consolidation Act 1997 (TCA).