Revenue Project will dilute the benefits of budget tax cuts for workers – Chartered Accountants Ireland

Nov 19, 2018

Chartered Accountants Ireland has highlighted that the current project by the Revenue Commissioners to review flat rate expense claims for employees could impact over 500,000 workers in sectors across the economy.  “Many PAYE workers could lose some of the cash benefit of the tax cuts announced in the October budget because of a change in Revenue administration policy” said Brian Keegan, Director of Public Policy and Taxation at Chartered Accountants Ireland.


Over 150 categories of employees, many working in the services and health sectors, automatically receive a modest tax deduction to reflect costs they incurred of necessity in their employment – cleaning of uniforms, purchase of tools and the like.  That automatic deduction across all sectors, from garage workers to pharmacists, from bar workers to driving instructors, is being reviewed by the Revenue Commissioners.  From the initial results of the review it seems that the automatic entitlement will be removed in over 80,000 cases.  Workers can make expenses claims in the future, but these will undoubtedly be subject to case-by-case examination.  Chartered Accountants Ireland fears that many simply will not bother with the administrative red tape required to recover deductions to which they were properly entitled.


This is the second Revenue development in recent days which has made tax tougher for employees.  There are concerns that employees will not immediately benefit from the greater control over their own tax affairs promised in the PAYE Modernisation project, due to commence in 2019.


“The single biggest source of money for the Exchequer is PAYE income tax” said Dr Keegan.  “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.  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.”