Revenue recently published an updated guide in relation to the tax treatment of the reimbursement of expenses of travel and subsistence to office holders and employees. The changes took effect on 1^st April 2017 and will be in place for a minimum duration of 3 years.

The key changes include:

• An increase in the number of distance bands from two to four
• A reduction in the allowable rate for the first 1,500km
• An increase in the allowable rate for vehicles with lower engine capacity
• An increase in the overnight rate for domestic subsistence
• The introduction of a vouched accommodation rate for Dublin

Records to support claims which include the name and address of the employee, date & reason for the journey, the starting point, destination and finishing point of the journey, are to be retained for a period of 6 years after the end of the tax year to which the records refer.

There has been no change to the definition of the normal place of work which continues to be the place where the individual normally performs the duties of his/her office or employment. The office holder’s or employee’s home would not be regarded as the normal place of work unless there is an objective requirement that the duties must be performed at home.  It is not sufficient for an office holder or an employee to carry out, or opt to carry out, some of their duties at home, for home to be considered as the normal place of work.

The long established principle of tax law that expenses incurred in travelling from home to work and work to home are expenses which are not necessarily incurred in the performance of the duties of an office or employment remains, hence the reimbursement to an office holder or employee of such expenses is taxable and subject to PAYE deductions, allbeit with some exceptions which are referenced in detail in Revenue’s document.

In recognition of difficulties in sourcing suitable accommodation in Dublin within the standard domestic subsistence rate (€133.73), the document introduced a separate Vouched Accommodation rate (“VA”) where employees are claiming an overnight allowance in Dublin. The VA rate consisting of the vouched cost of accommodation up to the standard overnight rate of €133.73 plus the appropriate day rate for the employee’s means may be claimed effective from 1^st April 2017. 

Whilst there has been no changes in how Revenue deal with items such as on call allowances, expenses incurred in callouts, costs incurred in attending normal place of work outside normal working hours, payment of taxi fares, individuals holding multiple directorships, site based expenses (country money), or eating on site allowances, it is recommended that all business owners and managers would review the document so as to ensure that the requirements provided for are being complied with. Quintas would be more than happy to assist you in this regard.

http://circulars.gov.ie/pdf/circular/per/2017/05.pdf 

http://circulars.gov.ie/pdf/circular/per/2017/06.pdf

If you have any queries on any of the above don't hesitate to contact us on 021 4641400 or email info@quintas.ie