Revenue has decided to defer any changes to the flat rate expenses regime to 2022 because of the upheaval in the labour market caused by the pandemic.
Last year, Revenue concluded a comprehensive review of the flat rate expenses regime and indicated that the basis for some of the existing allowances was no longer valid.
The review also highlighted that several aspects of the regime warranted consideration from a tax policy and legislative perspective. To facilitate these considerations, Revenue deferred the implementation of its findings pending the outcome of a policy review by the Tax Strategy Group.
Minister for Finance, Paschal Donohoe wrote to Revenue Chairman, Niall Cody, noting that 'while the Tax Strategy Group did not reach specific conclusions on the [income tax] paper, the Group observed that, having regard to the huge disruption in the labour market brought about by Covid-19, the question of the appropriate timing of the introduction of any policy changes relating to the flat rate expenses regime was one that would require careful consideration'.
Mr Cody told the Minister that Revenue would have no objection to a further deferral of the implementation of the findings of the flat rate expenses regime to January 1, 2022, pending decisions by the minister and his department on the policy options put forward by the group on various matters relating to employment expenses and the enactment of legislative changes in that area, if any.
Revenue will write to around 131,000 PAYE taxpayers next week, who, in the last five years have paid tax but have not claimed any additional tax credits or reliefs. These taxpayers are being reminded that there is a four-year time limit for claiming tax refunds and the deadline for 2016 claims is December 31, 2020.
Revenue continues to encourage all PAYE taxpayers, even those who do not receive a letter next week, to regularly review their tax record and claim their entitlements to ensure they only pay the correct amount of tax. The quickest, easiest and most convenient way to claim entitlements is online using PAYE Services, which is available in Revenue's myAccount portal.