Paul Kehoe (Wexford, Fine Gael)
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203. To ask the Minister for Finance if special needs assistants are entitled to claim flat rate expenses as other employees can do; and if he will make a statement on the matter. [3425/24]

Michael McGrath (Cork South Central, Fianna Fail)
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Section 114 of the Taxes Consolidation Act 1997 (TCA) provides for a tax deduction in respect of expenses incurred wholly, exclusively and necessarily by an individual in the performance of the duties of his or her employment.

The flat rate expense (FRE) regime is operated by Revenue on an administrative basis where both a specific commonality of expenditure exists across an employment category and the statutory requirement for the tax deduction as set out in section 114 TCA 1997 is satisfied, namely, that the expenses are wholly, exclusively and necessarily incurred in the performance of the duties of the office or employment by the employee concerned and that such expenses are not reimbursed by his or her employer.

The FRE regime was established to apply a uniformity of approach to tax deductibility for expenses of large groups of employees and to facilitate ease of administration for both Revenue and employees. The expense should apply to all employees in that category and not be discretionary.

The FRE regime developed incrementally over the last 40 to 50 years and was established at a time when the numbers of employees/PAYE taxpayers filing an Income Tax Return was relatively low. This is in contrast to the position today, whereby significant numbers of PAYE taxpayers routinely file an Income Tax Return to claim the range of tax reliefs and credits available to them. For example, medical expenses, the rent tax credit and remote working relief, etc. In respect of the 2022 tax year, to date over one million Income Tax Returns have been filed with Revenue by PAYE taxpayers.

Revenue has advised that it considers FRE applications where a large number of employees incur broadly identical qualifying expenses which are not reimbursed by their employer. Applications are generally made by the representative bodies in the employment sector concerned and are considered by Revenue based on the specific commonality of expenses within the employment category and compliance with the strictly applied, statutory requirement for a tax deduction. Revenue has confirmed that a submission was received from a representative body for Special Needs Assistants some time ago. However, it did not contain the required information necessary for Revenue to progress the submission further.

Notwithstanding that a FRE is not in place for Special Needs Assistants, as for all employees, they retain their statutory right to claim a deduction under section 114 of the TCA 1997 in respect of an expense incurred wholly, exclusively and necessarily in the performance of the duties of their employment, to the extent to which the expenses are not reimbursed by the employer.

The quickest and easiest way to claim tax relief for qualifying employment expenses is to complete an online Income Tax Return. For PAYE taxpayers, this return can be found in the PAYE Services tab in myAccount on the Revenue website.

Further guidance on the general rule of deduction of expenses in employment is also available on Revenue’s website at www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-02-20.pdf.