Subsistence

the 1nice1

If a self employed director paying Irish tax and Prsi undertakes business travel outside of the state (eg for a 4 day trip (3 x overnight) and (>10 hours on day 4) to a temp worksite
and the end client covers the cost of the accommodation only(hotel x 3 night)

What subsistence payments can be claimed by the director tax free from his/her company ?

Meals and any other expenses while away (eg breakfast pub dinner snacks and laundry etc) and travel must be covered by the director.

Can he/she still claim per day the

1- overnight rate (24hr)
2-Va rate
3- 10 hour Or
4- 5 to 10 hour

the 1nice1

Bump *

namenotavailablE

This might be relevant:

https://www.revenue.ie/en/employing-people/employee-expenses/travel-and-subsistence/civil-service-rates.aspx

Also, pages 3,5 and 6 of this 2017 Revenue manual (PDF) provide much the same information:

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-02-04.pdf

barneystinson

Firstly, the tax legislation actually provides that amounts reimbursed by an employer in respect of expenses are to be taxed as pay. The making of such payments tax-free is based solely on a Revenue concession and accordingly you need to be very sure you are within the terms of the concession.

The concession is set out in Statement of Practice SP-IT/2/07, and the most pertinent piece for your case is at page 4:

Reimbursement of expenses of travel and subsistence by way of ‘flat rate’ allowances:

"Provided the office holder or employee bears the cost of all expenses of travel necessarily incurred in the performance of the duties of his / her office or employment (and bears the cost of subsistence relating to such travel), Revenue will disregard for income tax purposes the reimbursement of expenses of travel and subsistence where such reimbursement is made by way of:
(i) a flat rate up to, but not exceeding, the prevailing Civil Service rates for travel and subsistence (see Appendix re such rates);or
(ii) a flat rate based on any other schedule of rates and related conditions of travel and subsistence which do no more than reimburse the office holder or employee for actual expenditure necessarily incurred.
Scale (i) may be applied without specific Revenue approval where a satisfactory recording and internal control system is in operation.
Revenue approval is required for scale (ii)."

The first thing is that the employee must bear the cost of the travel, and bear the cost of subsistence relating to that travel. Arguably, by the client covering the accommodation you are already outside of the concession, so you should tread carefully.

If you have a company credit card, you could perhaps use that to pay for food and other incidentals, so the company is simply covering your necessary subsistence expenses, or else you could probably justify a claim for day subsistence rates, but you certainly shouldn't claim any overnights.

KingPuck

Hi All. I would be obliged if someone clear up a few things on this I am not sure of.

1. Can an employee claim an overnight of €133 if they did not incur actual accommodation expense as they stayed with a relative?

2. Am I correct in saying an employee can claim an overnight or €133 if staying away within Ireland but not if staying abroad?

barneystinson

KingPuck wrote: »

Hi All. I would be obliged if someone clear up a few things on this I am not sure of.

1. Can an employee claim an overnight of €133 if they did not incur actual accommodation expense as they stayed with a relative?

2. Am I correct in saying an employee can claim an overnight or €133 if staying away within Ireland but not if staying abroad?

1. Yes. It's not the employers concern what arrangements the employee puts in place, so long as whatever expense is involved is borne by the employee.

2. There are published specified rates for various overseas locations.

KingPuck

Thank you Barney. My accountant told me that I could not claim overnights for trips abroad. My company pays for the accommodation and most of the expenses where they can be paid by company credit card.

barneystinson

KingPuck wrote: »

Thank you Barney. My accountant told me that I could not claim overnights for trips abroad. My company pays for the accommodation and most of the expenses where they can be paid by company credit card.

But if the company is paying for things by card, you don't have an expense to claim? Or are you talking about as an alternative to the company paying?

KingPuck

No the company is paying all the expense in most cases. I always thought though that there was an allowance given if working away. Call it an inconvenience payment for being away from home. I'm wrong obviously. Thank you for your help Barney.

wally1990

KingPuck wrote: »

No the company is paying all the expense in most cases. I always thought though that there was an allowance given if working away. Call it an inconvenience payment for being away from home. I'm wrong obviously. Thank you for your help Barney.

Unfortunately not , there is no such thing
Not being smart but that’s your wages
The expenses can be reimbursed on 1 of 2 methods
1- actual vouched expenses paid by company OR
2- claiming a flat rate tax deduction for expenses incurred based on the subsistence rates for the relevant country/city

You cannot have both so your accountant is referring to point 1 by advising the expenses are paid by the company and that’s it