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Tuesday 16 September 2014

TDs' and senators' tax-free 'gravy train' faces court challenge

Published 27/07/2014 | 02:30

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Sources close to the Reform Alliance say that aligning with at least two TDs would give them a crucial slot during Leaders’ Questions, which takes place three days a week
Sources close to the Reform Alliance say that aligning with at least two TDs would give them a crucial slot during Leaders’ Questions, which takes place three days a week

DUBLIN TDs and senators could see their travel and accommodation expenses stopped dead if a landmark High Court cases taken by two concerned citizens goes ahead.

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A legal challenge to the 'turning up' allowances paid to Leinster House politicians was lodged with the courts service and served on the Government last week.

The summons, served by self-employed builder John Wolfe and accountant Enid O'Dowd, claims the payments are in breach of European Union laws and discriminate against ordinary taxpayers.

Members of the Oireachtas receive unvouched and tax-free expenses to cover the cost of travelling to and from work.

The money is paid at the start of the year and it is up to the politician to return any of the allowance that went unused.

The payments are not audited and there is no system for verifying if the money is spent on travel and accommodation.

Under Revenue rules, the average taxpayer is forced to pay tax, or benefit in kind, on any commuter travel expenses paid by their employers.

The legal papers served by Mr Wolfe calls for the Travel and Accommodation Allowance (TAA) to be ceased for Dublin-based politicians until the case is heard in the High Court. And if the application contained in the court documents is successful, members living outside Dublin would, in the interim before the case is adjudicated, be required to file expense claims and receive only the current public service mileage rate.

TDs and senators are required to 'clock in' at Leinster House 120 days during the Dail term to receive tax-free expenses. The amount received is based on the proximity to Leinster House of their constituencies. There are currently 12 bands, ranging from €9,000 paid annually to Dublin TDs to €32,535 paid to politicians based more than 350km from Kildare Street.

Mr Wolfe and Ms O'Dowd have campaigned to reform the current system introduced by the Fianna Fail and Green Party coalition in 2010.

Mr Wolfe claims it's designed to give preferential treatment to politicians and discriminate against the public.

"By giving the Oireachtas a much more favourable tax treatment on travel expenses than is available to the public, (the Government) is in breach of EU Law," Mr Wolfe states in his court document.

Ms O'Dowd, who works as a volunteer accountant in the Chartered Accountants Voluntary Advice in Rathmines, Dublin, said employers cannot pay employees for travelling to work without tax implications.

"It makes me angry that my clients have to pay their own travel expenses out of their very modest incomes," she said.

Ms O'Dowd said Revenue "strictly enforces" expense laws on citizens but are restricted from applying the same rules to politicians because their expenses are governed by legislation.

Sunday Independent

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