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PAYE WORKERS COULD lose out on some of the cash benefit of the tax cuts announced in the October Budget because of changes to the flat rate expense claim regime.
Yesterday Chartered Accountants Ireland raised concerns about the changes which will impact on many employees in the services and health sectors. Under the current system they receive an automatic tax deduction to reflect costs that were exclusively and necessarily incurred in the performance of their job.
Revenue is currently reviewing flat rate expenses to ensure they are still justified and appropriate to current work practices.
“Arising from the review, there may be an adjustment to the quantum of particular flat rate expenses. The flat rate amount may be increased or decreased or it may be withdrawn by Revenue where the continuation is no longer justified,” a spokesperson told TheJournal.ie.
The flat rate expense for shop assistants was included in the current review and Revenue said it is satisfied that the “legislative basis underpinning tax relief for expenses does not justify its continuation”. For 2018 there were 75,822 recipients of this particular flat rate expense of €121, which gives rise to a total gross value of €9.1 million.
From 1 January 2019, flat rate expenses in a number of categories will be withdrawn:
The Revenue spokesperson said outside of the flat rate expenses regime, all employees retain their right to claim a deduction under current legislation for expenses necessarily incurred which are not reimbursed by the employer.
Although workers will still be able to make expenses claims in the future, Chartered Accountants Ireland said these will “undoubtedly be subject to case-by-case examination”. It said it fears that many “simply will not bother with the administrative red tape required to recover deductions to which they were properly entitled”.
“This Revenue project targets the tax affairs of those who support the country most, but have the least control over the amounts they have to pay,” Brian Keegan, Director of Public Policy and Taxation at Chartered Accountants Ireland said.
“No one should claim any amount to which they are not entitled, but this change in administrative practice is ill-timed and difficult for employers and employees alike.”
Further changes are expected in 2019 as the review continues and Revenue said any further withdrawals will be communicated through representative bodies and on its website.
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Do away with All Expenses for TD’s and Senators and their staff first.
@Dave C: No expenses without receipts, doesn’t matter who you are.
Revenue after the same old usual suspects, won’t go after the big fish because they have tax advisers, too much like hard work. Easier to go for the low hanging fruit.
The flat rate expenses are a nonsense anyway. In a previous job, I had to wear a suit to work. It was clearly a business expense, but because my job had no expenses code, I didn’t get flat-rate expenses.
Similar problems surround subscriptions to professional organisations.
Basically, you get the flat-rate expenses if you are in a job that has been around since the time of Noah. They have become increasingly irrelevant to the modern Irish workforce.
But that doesn’t mean they should just absorb the money. It should be distributed in a fairer way like increasing the PAYE allowance.
@Chris Mansfield: I want to know how I qualify as a free lance actor in employment
They give you 12 euro. Take 8 away on stealth taxes. The price if living rises to take the rest and landlords push you into the minus. It’s the same old ireland it’s the same old greed
These flat rate expenses are unfair.
All if them Sshould be scrapped.
@Niallers: including TDS ministers etc
FG never do anything to benefit lower paid workers. they’re only for the rich.
@Sean Conway: they have increased the minimum wage from €7.65 to €9.55, going up a bit more in January, reduced the USC that one also happens to also be a tax cut to the wealthy and well and the low income earners, social welfare increased for those who can’t work, started reversing the increases in taxes, you know there isn’t a bottomless pit of money right? Middle income earners can’t keep having to pay more, there aren’t enough “rich” in the country to tax more in order to give everyone else what they want
Journalists in employment = 8134
Where are they ?
@wattsed56: Leo’s Strategic Communications Unit
Budjet 2019 extra 110 a year – tax credit worse off now
have your say