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Mileage expenses : private sector

  • 13-12-2018 11:35am
    #1
    hinault
    Registered Users, Registered Users 2 Posts: 5,932 ✭✭✭


    A self employed person using their own car for work.
    They travel from their own place of work to different destinations for work.

    This work travel totals approximately 30,000 km annually, every year.
    (band 4) https://www.revenue.ie/en/employing-people/employee-expenses/travel-and-subsistence/civil-service-rates.aspx

    Their motor vehicle is 1900 cc engine capacity.

    According to the civil service mileage rates before April 2017 for their vehicle, a claimant could claim at €0.2846 per kilometre for 30,000 kms travelled.

    But after April 2017, the threshold rate drops from €0.2846 to €0.2585 for the same vehicle and for travelling the same annual distance

    This seems an unjust situation because for every kilometre travelled the worker in this instance is losing €0.03 threshold per kilometre travelled.


Comments

  • #2
    relax carry on
    Registered Users, Registered Users 2 Posts: 4,085 ✭✭✭relax carry on


    hinault wrote: »
    A self employed person using their own car for work.
    They travel from their own place of work to different destinations for work.

    This work travel totals approximately 30,000 km annually, every year.
    (band 4) https://www.revenue.ie/en/employing-people/employee-expenses/travel-and-subsistence/civil-service-rates.aspx

    Their motor vehicle is 1900 cc engine capacity.

    According to the civil service mileage rates before April 2017 for their vehicle, a claimant could claim at €0.2846 per kilometre for 30,000 kms travelled.

    But after April 2017, the threshold rate drops from €0.2846 to €0.2585 for the same vehicle and for travelling the same annual distance

    This seems an unjust situation because for every kilometre travelled the worker in this instance is losing €0.03 threshold per kilometre travelled.

    Self employed people do not claim civil service rates, these are for employees. Self employed claim actual expenses incurred on motor and travel wholly, exclusively and necessarily incurred in the course of their business.

    If you are talking about a company director they can opt for one of the below

    You can either:
    use the current schedule of Civil Service rates
    use other rates not higher than Civil Service rates
    repay the actual cost of the travel to your employee.

    Those are the rules we are all stuck with.


  • #3
    hinault
    Registered Users, Registered Users 2 Posts: 5,932 ✭✭✭hinault


    relax carry on wrote: »
    Self employed people do not claim civil service rates, these are for employees. Self employed claim actual expenses incurred on motor and travel wholly, exclusively and necessarily incurred in the course of their business.

    If you are talking about a company director they can opt for one of the below

    You can either:
    use the current schedule of Civil Service rates
    use other rates not higher than Civil Service rates
    repay the actual cost of the travel to your employee.

    Those are the rules we are all stuck with.

    The person gets paid "travelling" expense €100.00.

    Whether they have to travel 50 kms or 300 kms, the rate remains at €100.00.

    The actual expense incurred in travelling therefore varies depending on the distance travelled. It follows that shorter travel distances incur less expense relative to longer travel distances (less fuel, less wear and tear).

    In this work situation, it was agreed that using civil service rate measurement for 1500+cc engine vehicle, for travelling over 25,000 kms annually was reasonable.


  • #4
    rraido
    Registered Users Posts: 46 ✭rraido


    What the self employed person is doing is incorrect. They can claim the expenses for travelling e.g. cost of fuel/parking etc. they can claim the business part of car insurance and repairs in their accounts but should not be paying themselves “travelling” expenses. If they are audited by Revenue, there will be issues.
    hinault wrote: »
    The person gets paid "travelling" expense €100.00.

    Whether they have to travel 50 kms or 300 kms, the rate remains at €100.00.

    The actual expense incurred in travelling therefore varies depending on the distance travelled. It follows that shorter travel distances incur less expense relative to longer travel distances (less fuel, less wear and tear).

    In this work situation, it was agreed that using civil service rate measurement for 1500+cc engine vehicle, for travelling over 25,000 kms annually was reasonable.


  • #5
    relax carry on
    Registered Users, Registered Users 2 Posts: 4,085 ✭✭✭relax carry on


    hinault wrote: »
    The person gets paid "travelling" expense €100.00.

    Whether they have to travel 50 kms or 300 kms, the rate remains at €100.00.

    The actual expense incurred in travelling therefore varies depending on the distance travelled. It follows that shorter travel distances incur less expense relative to longer travel distances (less fuel, less wear and tear).

    In this work situation, it was agreed that using civil service rate measurement for 1500+cc engine vehicle, for travelling over 25,000 kms annually was reasonable.

    An employee getting paid a 100 euro traveling rate for 50km would be in excess of the civil service millage rate meaning the excess would be taxed as wages. Given the way you describe a 100 euro fee being paid regardless of distance sounds like round sum expenses which are always taxable as wages. Your employer's options are as outlined already regarding millage expenses. Are you adding in subsistence expenses into that 100 euro as well or is that 100 euro purely for covering millage?


  • #6
    Calahonda52
    Registered Users, Registered Users 2 Posts: 12,582 ✭✭✭✭Calahonda52


    Are the mileage bands per employment or per taxpayer:
    .
    eg: I am currently an employee with company A and claim mileage as per the revenue rates.
    .
    I will be starting an additional job next month where I will claim mileage as a director of my own company.
    .
    Can I start at zero for the company mileage?

    “I can’t pay my staff or mortgage with instagram likes”.



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  • #7
    Stratvs
    Registered Users, Registered Users 2 Posts: 958 ✭✭✭Stratvs


    Calahonda52 wrote: »
    Are the mileage bands per employment or per taxpayer:
    .
    eg: I am currently an employee with company A and claim mileage as per the revenue rates.
    .
    I will be starting an additional job next month where I will claim mileage as a director of my own company.
    .
    Can I start at zero for the company mileage?


    I've Googled to the ends of the interweb and back but can't find any Irish documentation on this where there are two ongoing employments both of which carry mileage claims. The normal rules would be per Revenue guide on this here :-

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

    I did find a UK source where 2 employments were mentioned but while there are lots of similarities in our tax systems one cannot obviously rely on that here.

    https://www.raffingers.co.uk/mileage-allowance-what-if-i-have-two-jobs/

    Where the employers are unconnected I would expect each to operate the scale as applicable to them only. They're not going to have nor should they be entitled (I would think) to any information in relation to expenses on another unconnected employment. In that situation I'd expect each to run as if it were the only one.

    If there is a connection between the employments then I'd consider an approach like the UK one in the link to be reasonable.


  • #8
    Calahonda52
    Registered Users, Registered Users 2 Posts: 12,582 ✭✭✭✭Calahonda52


    Stratvs
    Thanks for this piece of work.
    Much obliged.

    “I can’t pay my staff or mortgage with instagram likes”.



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