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Workers may avoid expenses cuts in January election 'stroke'

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'Pulled rabbit out of hat': Finance Minister Paschal Donohoe. Photo: Frank Mc Grath

'Pulled rabbit out of hat': Finance Minister Paschal Donohoe. Photo: Frank Mc Grath

'Pulled rabbit out of hat': Finance Minister Paschal Donohoe. Photo: Frank Mc Grath

Thousands of workers have been offered hope that a "slash and burn" review of flat-rate allowances - worth more than €1,000 for some - will not go ahead from January.

The Government appears set to do a U-turn on plans to impose a Revenue review of tax breaks given to almost 600,000 employees to cover work-related expenses.

The review would mean that some allowances could be cut, others increased, or some completely abolished.

Under the system, Revenue gives tax relief on expenses to many types of employees. This can cover equipment, uniform and stationery costs.

The Government deferred the roll-out of a Revenue review of the system last year following a public outcry.

Unions said they had been told informally that the review would be put on hold for another year, in what is being seen as a pre-election stroke.

Siptu official John Regan said the union had written to Taoiseach Leo Varadkar to clarify the status of the review.

In the letter, he urged him to delay Revenue's decision to reduce a €1,312 allowance to €200 for Tara Mines workers.

He said the "slash and burn" review was unacceptable "at a time when the Exchequer is declaring the largest level of financial surplus in the coffers of the Department of Finance".

He said European Affairs Minister Helen McEntee sent an email to the union to say the review was being referred to a Tax Strategy Group.

A Department of Finance spokesperson said "work is ongoing on this matter".

"Minister Donohoe will be in a position to make a statement in respect of this in due course," they said.

A Revenue spokesperson said it would make its next steps in relation to the review known this week.

He said Finance Minister Paschal Donohoe wrote to Revenue yesterday asking for its next steps.

Fianna Fáil TD Shane Cassells claimed that Mr Donohoe has "pulled a rabbit out of his magician's hat" to delay the changes.

Workers can claim up to €2,476 relief under the scheme, which works by reducing taxable income.

Irish Independent