Changes to flat-rate expense regime pushed out to 2021

Changes to the flat-rate expenses regime have been pushed out to 2021 as the State’s tax collector awaits results of a review by the Department of Finance.

Flat-rate expenses are those that cover the cost of equipment you need for work and Revenue had planned to change how the scheme works

Following parliamentary pressure, Revenue has decided to examine policy in this area. A comprehensive review of the regime has been under way for the past 18 months and it is scheduled to conclude soon.

More than 150 categories of employee, many of them working in the services and health sectors, automatically receive the deduction to reflect costs incurred to do their job.

This includes things such as the cleaning of uniforms and purchase of tools. You must incur these costs in the course of your duties, and the costs must be directly related to the nature of your employment. The reliefs on offer for these job titles range from €121 for a shop assistant, to €750 for an actor.

While the extent of the changes were not made clear, sectors expected to lose out under the changes were agricultural advisers, cardiac technicians, journalists, professional valuers in the valuation office, freelance actors in employment and shop assistants.


Chartered Accountants Ireland said the sectors outlined above would see the automatic entitlement removed for more than 80,000 workers. But Revenue has said it is looking at every sector eligible for the relief, so the number affected could be more than 600,000.

Revenue’s review has so far highlighted a number of inconsistencies, however. That includes different treatment between the self-employed and employees and the nature of expenses claimed.

The Minister for Finance, Paschal Donohoe wrote to Revenue chairman Niall Cody on Tuesday noting that the review has raised further issues where “policy consideration may be warranted”. Mr Cody subsequently confirmed Revenue’s decision to defer implementation of the changes until January 1st, 2021. It had planned to start advising taxpayers of the imminent changes on December 9th.

The issue will now be dealt with in the aftermath of a review by the tax strategy group within the Department of Finance.

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