TAOISEACH LEO VARADKAR has said some PAYE workers could lose out on some of their cash because of changes to the flat rate expense claim regime.

Concerns about the changes which will impact on many employees in the services and health sectors have been raised this week.

Under the current system they receive an automatic tax deduction to reflect costs that were exclusively and necessarily incurred in the performance of their job.

Revenue is currently reviewing flat rate expenses to ensure they are still justified and appropriate to current work practices.

During Leaders Questions today, Sinn Féin leader Mary Lou McDonald rounded on the Taoiseach’s announcement at his party’s Ard Fheis in which he promised to deliver five years of tax cuts by raising the cut-off point for the higher rate of tax to €50,000.

McDonald said while he was making such an announcement he never said that tens of thousands of low paid workers would lose their entitlement to flat rate expenses, which are worth an average of €100 a year. 

“We are talking here about a few bob that workers claim to cover the cost of equipment that they need for work, things like uniforms, tools and stationery. We are not talking about wholesale tax breaks, which, as the Taoiseach knows, others enjoy.

“We are talking about very legitimate and necessary expenditure which certain categories of workers incur as part of their jobs. Some 75,822 shop assistants, the group worst affected, will lose more than €120 a year. This will mean a net saving to the Exchequer of €9 million per annum. It is hardly a massive outlay; nonetheless, the loss of it for individual workers on low wages will be felt,” she said, adding that the entire proposal is a prime example of the government’s policy which shows a “complete disconnect from reality”.

She accused the government looking after the super rich while cutting flat rate expenses for low paid workers.

“The Taoiseach wants to scrap the very small tax relief of a couple of euro a week for ordinary working people. This is unbelievable…

“The high cost of living weighing down on ordinary workers cannot be tackled if the taxman snipes away at the very modest and necessary expenses they can claim,” said McDonald. 

Leo Varadkar confirmed the Revenue Commissioners have an ongoing review of concessionary flat-rate expenses, stating that some may be withdrawn in certain sectors.

This will not take place before 1 January 2020, “if at all,” said the Taoiseach.

There is some confusion about the date the measures kick in, as a reply to a parliamentary question by Sinn Féin’s Pearse Doherty on the issue stated the new measure would kick-in in January 2019. However, the Taoiseach said it would not be until January 2020.

A government spokesperson has confirmed that the ongoing review of concessionary flat rate expenses is to ensure that the expenses granted remain justified and appropriate to modern-day employment and work practices.

He states the Revenue’s date for implementation of the changes has been deferred to 1 January 2020.

“This approach will ensure that any changes that may be made to the flat rate expenses regime do not impact on any specific group earlier than the rest,” he said.

Vouched expenses 

While certain employees may no longer be able to get a deduction on a universal flat rate basis, they will still be able to get a deduction on a specific vouched basis, he said.

Hitting back at McDonald, the Taoiseach accused the Sinn Féin leader of hypocrisy in terms of her party’s relationship with the rich.

Varadkar accused McDonald of “hobnobbing with the superrich” in New York on Armistice day. 

He said when party leaders were paying their respect to the war dead, “she was hobnobbing with the super rich at a $400 a plate lunch for her super rich supporters”. 

He added: 

Does she not see any hypocrisy in that? She comes in here, day after day, and accuses us of having some sort of special relationship with the super rich and of having the wrong priorities. On the day of the Armistice, however, a particularly important day for Protestant and Unionist people in this country, on the day we inaugurated our President, on the day we showed respect for our Constitution, Deputy McDonald was in New York drinking champagne and eating $400 a plate lunches with the super rich.

The Taoiseach then moved the debate onto Sinn Féin wages paid to members, stating that the party try to claim “that somehow they can put themselves in the shoes of low paid shop workers while we know for years and years they told porkies about their own salaries”. 

“I refer to the false claim that they were living on the average industrial wage. We actually know they were living very well on the wages they were claiming,” he added. 

McDonald replied that she had attended a commemoration event is Sligo. She returned to her questions about the flat rate of expenses being cut to workers, which she listed in the Dáil.

She said the list included such professions as panel beaters, kitchen porters, nurses and members of the Defence Forces.

McDonald said the Taoiseach wants to create an elaborate system for workers to vouch and claim very modest reliefs, meanwhile the people looking into the Dáil chamber today will know all to well that many TDs claim unvouched expenses for a lot more money.