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You are here: BAILII >> Databases >> Irish Information Commissioner's Decisions >> Mr X and Office of the Revenue Commissioners (Office of the Revenue Commissioners) [2023] IEIC 124595 (11 December 2023)
URL: http://www.bailii.org/ie/cases/IEIC/2023/124595.html
Cite as: [2023] IEIC 124595
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Mr X and Office of the Revenue Commissioners
Case number: OIC-124595-F4L4Y0
Whether Revenue was justified in refusing access to records relating to a review of flat rate expenses under sections 29(1), 30(1)(c), 35(1)(a), 37(1) or 41(1)(a) of the FOI Act
11 December 2023
Background
In an FOI request of 14 March 2022, the applicant's sought access to a copy of Revenue's review of Flat Rate Expenses (FRE) referred to as the FRE Review in certain specified publications on its website. In its decision of 8 April 2022, Revenue refused the request under section 29(1) of the FOI Act on the ground that its deliberations on the matter were ongoing and that release of the records would be contrary to the public interest. The applicant sought an internal review of that decision on the same day.
In its internal review decision of 27 May 2022, Revenue said 229 records fell within the scope of the request. It varied its original decision and granted access in full to 19 records, partial access to 209 records, and it refused access to one record. Revenue relied on sections 29(1), 30(1)(c), 35(1)(a), 37(1) and 41(1)(a) in support of its decision to refuse access in full or in part to the relevant records. The applicant subsequently applied to this Office for a review of Revenue's decision.
I have now completed my review in accordance with section 22(2) of the FOI Act. In carrying out my review, I have had regard to the submissions made by the applicant and to the submissions made by Revenue in support of its decision. I have also had regard to the contents of the records concerned. I have decided to conclude this review by way of a formal, binding decision.
Scope of Review
As outlined above, Revenue identified 229 records as falling within the scope of the applicant's request. It released 19 records in full (106, 118, 120, 121, 125, 126, 127, 146, 147, 148, 161, 164, 175, 192, 221, 225, 226, 227 and 228). These records fall outside the scope of this review.
During the course of the review, this Office wrote to the applicant and explained that many of the records have been redacted under section 37 of the Act which provides for the protection of third party personal information. The redacted information includes the names of various union officials or officials of other representative bodies for the various employments the subject of the review and phone numbers of these individuals. The records concerned are records 1-25, 27-33, 36-73, 78-80, 85-86, 90-92, 95-97, 99-101, 107-109, 111 -113, 115-117, 122, 128-129, 154, 157-159, 162, 165, 168-172, 175-183, 187, 189, 191, 193, 194, 195, 197, 198, 205, 216-218. In reply, the applicant confirmed that he is happy to exclude the information redacted under section 37 of the Act from the scope of the review. Accordingly, I will give no further consideration to these records. Moreover, I will also exclude from the scope of the review those parts of the remaining records that were redacted under section 37 and will consider only the information that was redacted on other grounds, apart from section 37.
I also note that while Revenue granted partial access to records 222, 223 and 224, comprising correspondence between the Revenue Chairman and the Minister for Finance, all three records are publicly available unredacted on Revenue's website. I will therefore give no further consideration to those three records.
Accordingly, the scope of this review is confined to a consideration of whether Revenue was justified in refusing access in full or in part, under sections 29(1), 30(1)(c), 35(1)(a) or 41(1)(a) of the FOI Act, to the following records: 26, 34, 35, 74-77, 81-84, 87-89, 93, 94, 98, 102-105, 110, 114, 119, 123, 124, 130-145, 149-153, 156, 160, 163, 166, 167, 173, 174, 184-186, 188, 190, 196, 199-204, 206-215, 219, and 229.
Preliminary Matters
Section 18(1) of the Act provides that if it is practicable to do so, access to an otherwise exempt record shall be granted by preparing a copy, in such form as the body concerned considers appropriate, of the record with the exempt information removed. Section 18(1) does not apply, however, if the copy provided for thereby would be misleading (section 18(2) refers). This Office considers that neither the definition of a record under section 2 of the Act nor the provisions of section 18 envisage or require the extracting of particular sentences or occasional paragraphs from records for the purpose of granting access to those particular sentences or paragraphs. Generally speaking, therefore, this Office is not in favour of the cutting or "dissecting" of records to such an extent.
Although I am obliged to give reasons for my decision, section 25(3) requires all reasonable precautions to be taken in the course of a review to prevent disclosure of information contained in an exempt record. This means that the description which I can give of the records at issue and the material that I can refer to in the analysis may be limited in places.
Analysis and Findings
The records in question
While I am limited in the extent to which I can describe the contents of the records at issue, I believe it would be useful to provide a brief overview of same. In its submissions to this Office, Revenue provided some background information in respect of the records.
Revenue said FREs are those that cover the cost of equipment an employee needs for his or her work. It said the amount of the deduction is agreed between Revenue and representatives of groups or classes of employees (usually trade union officials). It said all employees of the class or group in question can then claim the agreed deduction in their own tax credits. It said the purpose of the FRE review was to ensure that the expenses granted to each employment category remained justified and appropriate to modern day employments and work practices. It said the FRE engagement process took place in 2018/2019. It said that subsequent to this, the COVID-19 pandemic occurred which had a fundamental impact on the working environment and work practices for certain categories of employment, which may have a bearing on the FRE for that category. It said it decided that the effective date for implementation of any changes to particular FRE categories should be deferred so that any changes to FREs that may arise having regard to changed circumstances arising from COVID-19 can be determined. It said that once this work is concluded a further update on the implementation of changes to the FRE regime will be made available and published on its website.
The records at issue include correspondence between Revenue and bodies representing various categories of employees with entitlement to a flat rate expense. The records contain information about expenses granted to each employment category and discussions in relation to whether certain expenses are wholly, exclusively and necessarily incurred by the employee in the performance of the duties of his or her employment and whether or not expenses are reimbursed by the employer. The records include Revenue's consideration of representations made. A small number of records contain correspondence between the Minister for Finance and the Revenue Chairman concerning the next steps in the FRE review.
Section 29 -“ Deliberations of Public Bodies
Having regard to the content of the records, it seems to me that section 29(1) of the FOI Act is the most relevant exemption provision to consider first. Revenue refused access in full or in part to all of the records at issue under section 29(1) of the FOI Act. That section provides for the discretionary refusal of a request if (a) the record concerned contains matter relating to the deliberative processes of an FOI body, including opinions, advice, recommendations and the results of consultations considered by the body for the purpose of those processes, and (b) the body considers that the granting of the request would be contrary to the public interest. Section 29 also provides that, without prejudice to the generality of paragraph (b), the FOI body shall, in determining whether to grant or refuse to grant the request, consider whether the grant thereof would be contrary to the public interest by reason of the fact that the requester concerned would thereby become aware of a significant decision that the body proposes to make. Subsections (a) and (b) are two independent requirements and the fact that the first is met carries no presumption that the second is also met.
Section 29(1)(a)
In order for section 29(1) to apply, the records must contain matter relating to the -˜deliberative process' of an FOI body. An FOI body relying on this exemption should identify both the deliberative process concerned and any matter in particular records which relates to these processes. A deliberative process may be described as a thinking process which informs decision making in FOI bodies. It involves the gathering of information from a variety of sources and weighing or considering carefully all of the information and facts obtained with a view to making a decision or reflecting upon the reasons for or against a particular choice. Thus, it involves the consideration of various matters with a view to making a decision on a particular matter. It would, for example, include some weighing up or evaluation of competing options or the consideration of proposals or courses of action.
The applicant argued that the information at issue does not relate to any deliberative process but rather established factual matters. He noted the contents of the publicly available correspondence between the Revenue Chairman and the Minister for Finance which talks of "implementation of the findings of the comprehensive review of the flat rate expenses regime that was undertaken in 2018 and 2019." He said that the statements of the Chairman indicate that the review the subject of his request is clearly completed. He said he is seeking a copy of the factual matters referred to by the Chairman.
In its original decision, Revenue said the purpose of the FRE review was to ensure that the expenses granted to each employment category remained justified and appropriate to modern day employments and work practices. It said the FRE review process was carried out during 2018 and 2019, consisting of extensive engagement with the representative bodies representing the various categories of employees with entitlement to a flat rate expense. It said that during the course of the review process, a number of policy issues emerged and as a consequence, Revenue decided to defer the implementation of any planned changes to the regime pending the outcome of a policy review by the Tax Strategy Group (TSG), which is under the remit of the Department of Finance. It said a detailed account of the review of the tax treatment of employment expenses including flat rate expenses was included in the 2020 TSG paper - Income Tax 20/02, published by the Department of Finance in September 2020. As part of the examination of the employment expense issues in that paper, a number of policy options as to how the flat rate expense issue might be addressed going forward were outlined and discussed.
Revenue added that the 2021 TSG paper Income Tax 21/02, published by the Department of Finance, included policy options regarding possible changes to Revenue's flat rate expenses regime. It said this was against the background of the continued social and economic circumstances arising from the COVID-19 pandemic. It said the TSG also noted that the timing of any changes should be considered and that this led to the exchange of correspondence between the Minister and the Chairman of the Revenue Commissioners referenced by the applicant.
Revenue said the FRE review/engagement process was completed in 2019 but that subsequent to this the COVID-19 pandemic occurred, which had a fundamental impact on the working environment, regulations and work practices, for certain categories of employment, which may have a bearing on the FRE for that category. It said that as a result, it may be necessary to revisit a small number of categories, where this may have an impact on the FRE. It said that in the interest of fairness to all sectors and employees currently benefitting from the regime, Revenue decided, following engagement with the Department of Finance, that the effective date for implementation of any changes to particular FRE categories would be deferred until 1 January 2023, by which time it was anticipated that any changes to FREs that may arise having regard to changed circumstances arising from COVID-19 would be determined. It added that the policy options and position may be further considered and advanced by the Department of Finance and that this additional time would allow for further consultation, if required, with relevant representative bodies.
In our request to Revenue for submissions this Office in January 2023, this Office sought details of the then status of the review given Revenue's statement that the effective date of changes would be deferred until 1 January 2023. In response, Revenue said a further review is required, having regard to the passage of time since the 2018/19 review and to take account of some changes in work practices for certain employments arising from the COVID-19 pandemic, together with other relevant factors and considerations. It said it would defer the implementation of the findings of the 2018/2019 review to allow time to complete its further review of certain flat rate expense rates. It said that once this work is concluded a further update on the implementation of changes to the FRE regime will be made available and published on the Revenue website.
It is important to note that for section 29(1)(a) to apply, the deliberative process does not have to be ongoing, although the issue of whether the deliberative process is ongoing or at an end may be relevant when considering whether section 29(1)(b) applies. Having considered the submissions made and having carefully examined the records, I am satisfied that the withheld information at issue relates to Revenue's review of the FRE regime and that the review can reasonably be described as a deliberative process. I find that 29(1)(a) applies to the information withheld from the records at issue.
Section 29(1)(b)
As I have found section 29(1)(a) to apply to the information withheld from the records, I must go on to consider subsection (b). The public interest test at section 29(1)(b) is a stronger public interest test than the public interest test in many other sections of the FOI Act, which require that, on balance, the public interest would be better served by granting than by refusing to grant the request. The public interest test in section 29(1)(b) requires the FOI body to show that the granting of the request would be contrary to, or against, the public interest. Generally speaking, this requires a body to identify a specific harm to the public interest flowing from release.
The applicant said the flat rate expense regime is a concessionary arrangement of Revenue without a statutory basis. He said the information the subject of his request evidences Revenue's failure to apply the tax legislation consistently in relation to Section 114 of the Taxes Consolidation Act 1997 and he argued that the public interest is not served by allowing Revenue to hide its maladministration. He described the records sought as relating in large part to correspondence with representative bodies. He said Revenue has applied an inconsistent approach in its partial release and argued that it is not open to Revenue to cherry pick the details it discloses in an unequal, inconsistent, and perhaps misleading manner.
He applicant also said that Revenue does not set tax policy and that it is charged with administering the tax regime adopted by the Oireachtas. He argued that it is not appropriate for Revenue to claim that release of the information would in some way jeopardise the development of national tax policy. He said Revenue has not demonstrated any detrimental impact of publication. He said it is not sufficient to just suggest some vague detrimental impact. He said Revenue must explain who will be negatively impacted by release and how. He said Revenue has no statutory remit to negotiate the tax code with selected bodies representing groups of taxpayers. He argued that Revenue is seemingly usurping the powers of the Oireachtas in unilaterally giving these effective tax breaks to selected taxpayers only. He said there is a detrimental impact on taxpayers that do not enjoy the benefits of the flat rate expense regime. He argued that releasing the records would provide transparency for these taxpayers and show how representative bodies are chosen for this benefit.
Revenue said that the FRE page on its website is very straightforward and clearly sets out the FREs that each category of employee can claim for each year. It said there is no lack of transparency involved. It said the FRE regime is an administrative simplification process, rather than a -˜tax break'. It said all employees have a statutory right to claim a deduction under section 114 TCA 1997 for any valid expenses incurred wholly, exclusively and necessarily in the performance of the duties of their employment, to the extent which the expenses are not reimbursed from any source. It said claims are made on a vouched basis.
Revenue added that the purpose of the FRE regime is to simplify tax administration for both taxpayers and Revenue by making it easier for large groups of employees working in the same sector to avail of their entitlement to tax relief in respect of qualifying expenses incurred in the performance of their employment duties. It said the administration of the tax code is placed under the management of the Revenue Commissioners in accordance with section 849 TCA 1997. It said it does not choose which bodies to engage with, but rather those bodies approach Revenue. It said that in terms of the review in question, correspondence was sent to bodies who had previously contacted Revenue in relation to an FRE.
Revenue added that when the FRE review is concluded and final determinations have been made, its published list will be updated with the new rates of FREs. It said that those amounts may be different to both the current rate, as published, and the rates being discussed in the redacted records. It argued that publication of the amounts being discussed in the redacted records could lead to confusion by taxpayers who may believe that they are entitled to claim a higher or lower amount as a FRE (based on those letters which reflect an incomplete process) than they are entitled to based on Revenue's published position. It said its position remains that no decisions in relation to the review of FREs is final until all decisions are final and the updated list has been published for all employees to rely upon. It also said that releasing the records to the applicant would involve him becoming aware of some significant decisions that Revenue is considering involving changes to FRE's.
As I have outlined above, while there is nothing in the section 29 exemption itself which requires the deliberative process to be ongoing, the question of whether it is ongoing or not may be relevant to the issue of the public interest. This is not to say it automatically follows that it is contrary to the public interest to release some or all records relating to an ongoing deliberative process. Neither does it follow that it is contrary to the public interest to release records that comprise an incomplete view of the factors and issues under consideration. Each case must be determined on its own merits.
It seems to me that section 29 represents a clear acceptance of the fact that there will be occasions where disclosure of the details of an FOI body's deliberations - whether before or, in some cases, after a decision based on those deliberations has been made - would be against the public interest. In this case, I am satisfied that while the FRE review was initially undertaken in 2018/19, the deliberative process is ongoing. I accept Revenue's submission that a further review is required, having regard to the passage of time since the 2018/19 review and to take account of some changes in work practices for certain employments arising from the COVID-19 pandemic, together with other relevant factors and considerations.
I accept that it is important that tax payers and employers have certainty in terms of flat rate expenses allowance entitlements and that Revenue requires appropriate time and space to engage in a pre-decision deliberative process concerning the various expense entitlements without undue or unreasonable interference that might arise from the release of records. I am conscious of the fact that the release of records under FOI must be regarded, in effect, as release to the world at large, given that the Act places no constraints on the uses to which a record released under the Act may be put. Having considered the contents of the records, it seems to me that there is a real risk that their premature release could reasonably be expected to result in uncertainty for taxpayers in terms of the various FRE allowances currently available, before a final determination has been made by Revenue.
Having considered the matter carefully, it seems to me that disclosure of the records at this point in time would be contrary to the public interest. I find, therefore, that the second requirement of section 29(1), as set out at section 29(1)(b) of the FOI Act, has been met in this case.
Section 29(2)
Section 29(2) provides that section 29(1) does not apply if and in so far as the record contains any or all of the following:
a. matter such as rules, procedures, guidelines, interpretations and precedents used, or intended to be used, by an FOI body for the purpose of making decisions, determinations or recommendations;
b. factual information;
c. the reasons for the making of a decision by an FOI body;
d. a report of an investigation or analysis of the performance, efficiency or effectiveness of an FOI body in relation to the functions generally or a particular function of the body;
e. a report, study or analysis of a scientific or technical expert relating to the subject of his or her expertise or a report containing opinions or advice of such an expert and not being a report used or commissioned for the purposes of a decision of an FOI body made pursuant to any enactment or scheme.
While I have considered whether the records at issue contain any of the matter describes above, I have also had regard to the requirements of section 18 of the Act, which provides for the release of non-exempt material from an otherwise exempt record "if it is practicable to do so". Section 18(2) provides that section 18(1) does not apply if the resulting copy would be misleading. I am of the view that it would not be practicable to attempt to extract any relevant non-exempt matter from the records while at the same time ensuring that no exempt information is released and that the resultant records were not misleading. It seems to me that the release of such information in this particular case would, of itself, serve to undermine the protection afforded to the deliberative process by section 29(1).
In conclusion, therefore, I find that Revenue was justified in withholding, under section 29(1) of the Act, certain records, in whole or in part, relating to Revenue's review of flat rate expenses.
Decision
Having carried out a review under section 22(2) of the FOI Act, I hereby affirm Revenue's decision to refuse access to certain records, in whole or in part, relating to its review of flat rate expenses, under section 29(1) of the Act.
Right of Appeal
Section 24 of the FOI Act sets out detailed provisions for an appeal to the High Court by a party to a review, or any other person affected by the decision. In summary, such an appeal, normally on a point of law, must be initiated not later than four weeks after notice of the decision was given to the person bringing the appeal.
Stephen Rafferty
Senior Investigator