Inflation rates around the world have been creating havoc, leading to higher prices for goods and services. The purchasing power of employees is dropping rapidly, and governments and organizations must take appropriate steps to ease the pressure on workers. One of those measures is to increase flat-rate allowances for workers, which can help offset some of the rising costs of living. This article explores the call for revenue to increase workers’ flat-rate allowances in line with soaring inflation and the potential benefits for employees.
The cost of living in Ireland has been steadily increasing and workers are feeling the pinch. The rising price of basic necessities, such as food and housing, is putting a significant strain on people’s finances. However, there is one area where the government has failed to keep up with this inflation – employment allowances.
Taxback.com, a leading tax advisory firm, has called on the Irish government and Revenue to adjust flat-rate employment allowances to reflect rising costs. Currently, only around 1% of Irish workers claim the flat-rate employment tax allowance. This tax break allows workers to cover some of the costs of carrying out their work duties. Despite this tax break being worth hundreds or even thousands of euros a year, many workers are missing out.
The rate of allowance paid varies depending on the job. An electrician can claim €153 as a flat-rate expense every year, and a bricklayer can claim €175. Nurses can claim €733 for providing their own uniforms and laundering them. Meanwhile, teachers can claim €518 as a flat-rate expense if they are a full-time teacher.
Marian Ryan of Taxback.com estimates that hundreds of thousands of employees are losing out on this valuable tax allowance. She has called on workers to claim their flat-rate employment expense allowance and for the government and Revenue to adjust the allowances in line with inflation. Not all employees are entitled to the flat-rate expenses allowance, but many are, and just a tiny fraction actually claim what they are owed.
Ms Ryan said that the allowance for flat-rate expenses is essentially tax relief that many workers can get to cover the cost of equipment, such as tools, uniforms, and stationery, which they need for work. At the top end of the scale, this allowance is worth thousands a year, and for most employees, it is worth a few hundred euros a year.
Pharmacists can claim €400 a year, carpenters can claim €220, and shop assistants can claim €121. These are all allowances that those workers are entitled to, and which could alleviate some financial pressures. However, there is a pressing need for an adjustment in line with inflation to ensure that workers are not left behind by rising prices.
Revenue carried out a comprehensive review of the flat-rate expense allowances in 2018 and 2019. As a result of this review, a number of allowances were expected to be cut or abolished. After some controversy, planned changes to the allowances were deferred until January of this year. However, Revenue recently announced that a further review is now required, given the passage of time since the initial review.
Ms Ryan believes that Revenue should take the follow-up review as an opportunity to increase the allowances so that they better reflect the costs in the workplace today. With the cost of living continuing to rise, workers need all the help they can get to make ends meet. Flat-rate employment allowances are an important tool in this regard, and it’s time for the government and Revenue to act to ensure that workers are not left behind.
In conclusion, the current economic climate is one where the cost of living is skyrocketing, but the wages and allowances of many workers are still stagnant. This is why calls for revenue to increase workers’ flat-rate allowances should be taken seriously. By doing so, employers can help alleviate the financial burdens their employees face, which in turn can lead to higher levels of productivity and job satisfaction. It is time for us to recognize the importance of fair compensation and make the necessary changes to ensure that workers are not left to bear the brunt of inflation alone. Let us work together to create a more equitable society, where every worker is able to live a dignified and comfortable life.
