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Dublin: 14°C Sunday 20 September 2020

Revenue defers plans to change the flat rate expenses scheme

Workers are afforded tax relief for expenses incurred in their day-to-day jobs.

Image: Shutterstock/Dragana Gordic

REVENUE HAS ANNOUNCED plans to defer any decision on changes to be made to the flat-rate expenses structure until January 2020. 

A review of the flat-rate expanses scheme has been underway for the last 18 months and is scheduled to conclude shortly. 

The scheme is designed to compensate workers for some of the expenses they ordinarily incur during their day-to-day work. 

It varies in terms of the amount of relief afforded to workers in different fields. Those in the mining industry, for example, receive tax relief of €1,312 while nurses receive tax relief of €80 under the scheme. 

The report has found inconsistencies in the existing structure including in areas relating the treatment of self-employed people versus employed people, ineligible registration fees being claimed and the nature of expenses being claimed. 

Revenue said any changes recommended in the review will not be implemented before 1 January 2021, pending the outcome of the Tax Strategy Group. 

It said the decision was made in light of Finance Minister Paschal Donohoe’s support for plans to examine the policy and legislative options in relation to tax relief under the scheme. 

In a letter to Chair of the Revenue Commissioners, Niall Cody, the minister said “I note the fact that the review has raised a number of aspects in the current regime where further policy consideration may be warranted.”

Joanna Murphy of Taxback.com said the decision to defer has been welcomed while also saying the “system is dated and is probably in need of an overhaul”. 

“While it’s true that the system is dated and is probably in need of an overhaul – we would advocate for this to be done cautiously and logically, so as not to disadvantage those who have a reasonable claim to such reliefs,” she said. 

“In fact, we would hope that greater discussion around the flat-rate expense relief might make more people aware of its existence and ultimately to lead more people to claim what they are owed.”

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