Mileage refers to the use of your private car or motorcycle for business purposes. Employers can provide reimbursement for allowable motoring expenses through flat-rate mileage allowances. However, it's crucial to note that you cannot claim mileage for your daily commute between your home and regular workplace; only business-related journeys away from your usual place of work are eligible.
Subsistence comes into play when you perform your job duties temporarily away from your usual workplace or while working abroad on an international assignment. These allowable subsistence expenses can be reimbursed to you tax-free. It's essential to emphasize that time spent at your regular workplace or during your commute doesn't count as a qualifying absence.
Identifying Your Normal Place of Work:
Contractors, take note! The Irish Revenue has released a crucial document called Tax Briefing 03/13, offering valuable insights into how they define your regular place of work. It's essential reading for contractors aiming to determine where their normal place of work stands.
Typically, there are two ways to receive reimbursement for your expenses:
Receipt Submission: You can present your employer with expense receipts (e.g., hotel bills), and they will reimburse you for these documented costs.
Kilometre and Hours/Nights Tracking: Alternatively, you can keep track of the kilometres travelled and hours or nights spent away. If your employer is satisfied with your documentation, they will reimburse you according to the appropriate mileage and subsistence rates.
Calculating Your Business Journey:
When starting a business journey directly from home to a temporary place of work or returning home directly, use the Revenue-approved rates for calculating business kilometres. Mileage rates are determined by the engine capacity of the vehicle used, while subsistence rates vary based on the number of hours spent away from your regular workplace.
Pre-Approved Mileage and Subsistence Rates:
For the most up-to-date information on mileage and subsistence rates, consult Revenue's official page: Link to Revenue's Mileage and Subsistence Rates https://www.revenue.ie/en/employing-people/employee-expenses/travel-and-subsistence/civil-service-rates.aspx
Covered Costs in Pre-Approved Subsistence Rates:
Overnight Subsistence Rate: This includes the cost of one night's accommodation and three meals.
Daily Subsistence Rate (Ten Hours or More): Covers the cost of two meals.
Daily Subsistence Rate (Five to Ten Hours): Includes the cost of one meal.
Maintaining Records of Your Claims:
To ensure smooth processing and compliance, it's vital to keep accurate records of each business trip. The following information should be included: Name and Address
Sole traders themselves cannot claim mileage and subsistence, but their employees can. Instead, sole traders can claim actual expenses incurred during business trips and should maintain receipts for motor expenses, accommodations, and other travel-related costs. When preparing income tax returns, it might be necessary to allocate a portion of motor expenses to represent private expenditure.
For Further Information:
For detailed insights into the rules governing mileage and subsistence claims, as well as the criteria for determining your normal place of work, refer to Revenue's resources:
Revenue's Leaflet IT51 and IT 54
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