Tuesday 17 September 2019

Donohoe in climbdown on loss of tax breaks as Taoiseach accused of 'clobbering workers'

Taoiseach Leo Varadkar. Picture: Damien Eagers / INM
Taoiseach Leo Varadkar. Picture: Damien Eagers / INM

Charlie Weston and John Downing

Changes to the tax breaks which will hit thousands of ordinary workers have been put off for a year after a climbdown by Finance Minister Paschal Donohoe.

Mr Donohoe has confirmed that a review of tax relief on expenses will be carried out by the Revenue Commissioners next year.

But he said there will be no attempt to stop the entitlements availed of by at least 80,000 workers until 2020.

"Expenses that are wholly, exclusively and necessarily included for the purposes of work will continue to be claimable under the Tax Consolidation Act. That is not changing," Mr Donohoe said.

"But what will be happening next year is that the matter will be reviewed. They [Revenue] have informed me that there won't be any change in terms of how they implement this policy until January 1, 2020."

This was added to by Taoiseach Leo Varadkar's office, which said the review of concessionary flat rate expenses was needed "to ensure that the expenses granted remain justified and appropriate to modern day employments and work practices".

The Irish Independent yesterday outlined how the Revenue Commissioners were moving to strip tax allowances from January 1 from 80,000 people - including teachers, CIÉ workers, hotel, bar and construction staff.

More than 500,000 PAYE people claim the tax relief, but six categories of workers have already lost the relief. This includes some 76,000 low-paid retail workers.

Yesterday, the Taoiseach faced accusations of "giving tax cuts with one hand while clobbering workers with the other".

Sinn Féin leader Mary Lou McDonald said Mr Varadkar pledged at his party's Árd Fheis on Saturday that he would make major tax cuts over the coming five years.

But she said Revenue was moving to cut a small tax allowance to low-paid workers.

The General Secretary of the Irish Nurses and Midwives Association, Phil Ni Sheaghdha, said nurses' expenses would be affected by potential changes to the current flat rate.

She said nurses are required to pay for their own uniforms, to launder them and also pay for registration with the nurses and midwifery board of Ireland.

The Taoiseach said there would be no change in workers' tax allowances until 2020 - "if at all".

But he also argued that the Revenue Commissioners were independent in such matters and workers would still be able to claim other expenses.

Employees have been urged to act now to claim back the allowance for the previous four years. Advisers at Taxback.com said the relief can be claimed for the last four years.

Revenue is undertaking a review of some 53 employment categories where workers are allowed to claim expenses to help defray the cost of providing and maintaining uniforms and tools.

Commercial director at Taxback.com Eileen Devereux said those facing a cut in the relief should ensure they are getting it for this year and for the previous four years.

"We are urging those who will be affected to move now to claim back reliefs for the previous four years."

She warned that we are fast approaching the deadline to claim refunds from the 2014 tax year, which will be on December 31.

Ms Devereux said PAYE earners can submit a claim for 2014, 2015, 2016, and 2017. And come January 1 people will be able to submit a claim for 2018 flat-rate expenses.

Irish Independent

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