Sunday 15 September 2019

Charlie Weston: 'Mean and petty move will leave PAYE workers feeling resentful'

 

'Already six categories of workers are set to lose out. Among these are 75,000 retail workers. Many of these are low paid and have precarious working conditions.' Stock Image
'Already six categories of workers are set to lose out. Among these are 75,000 retail workers. Many of these are low paid and have precarious working conditions.' Stock Image
Charlie Weston

Charlie Weston

Ordinary workers in this country would be forgiven for concluding that they just can't catch a break.

Some of the lowest-paid workers in the State are set to lose out on a valuable tax break from next year. Others, on higher incomes, have been warned that they are in the firing line.

The flat-rate expenses allowance is in place to help defray the cost for PAYE (pay as you earn) workers of providing uniforms or workwear, and for the cost of equipment and tools.

The system has evolved over 50 years, with set amounts for 53 different categories of workers.

The amounts allowed are often modest, and are the same for each category of job so that workers do not have to individually appeal to Revenue for an allowance.

Now, out of the blue, it has emerged that Revenue is well on the way to reviewing the expense regime.

Already six categories of workers are set to lose out.

Among these are 75,000 retail workers. Many of these are low paid and have precarious working conditions.

Around 500,000 PAYE workers could ultimately be affected.

Finance Minister Paschal Donohoe defended the move, stating that the expenses regime needed to be reviewed in light of changing work practices.

But the unilateral actions of Revenue will mean that any gains from the small tax cuts in last month's Budget will be eradicated.

Perhaps the biggest irony is that Taoiseach Leo Varadkar told the Fine Gael Ard Fheis he plans to increase the point at which people pay the top tax rate to €50,000.

That would be welcome.

From next year, single earners will be hit with the 40pc tax rate when their earnings go above €35,300. That is one of the lowest amounts to be taxed at the highest rate in any Western country.

A toxic combination of elevated income taxes, the universal social charge (USC), higher VAT rates, a raft of levies and charges, and the loss of tax reliefs is hitting households hard.

The Irish Congress of Trade Unions has labelled the latest move by Revenue to strip away the flat-rate expenses as an attack on ordinary workers.

And it does seem petty given that companies, especially the big banks, have some €24bn that can be carried forward in corporation tax losses.

Remember too that one in four of the country's wealthiest people has declared taxable income below the average industrial wage. An audit of the State's accounts shows Revenue Commissioners are monitoring 480 people who they classify as 'High Wealth Individuals'. They have more than €50m in net assets.

Taking away an allowance to cover the cost of work shoes for a PAYE worker seems unforgivable when you consider how little tax some pay.

Irish Independent

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