Tax Flash – Changes to Reimbursement of Subsistence Expenses to Employees (including Directors)

The Revenue Commissioners have updated Leaflet IT54, which covers the reimbursement of subsistence expenses to employees (including directors). The update is to reflect recent changes to the Civil Service subsistence rates and distance requirements relating to the reimbursement of expenses . These rates can also be used by private sector employers in reimbursing employees using flat rates. The changes take effect from 1 July 2015, and it is imperative that employers update their controls and procedures around expense payments to incorporate these changes where applicable.

1. Rate changes

The updated rates are as follows:

Table of updated Domestic Subsistence Rates effective from 1 July 2015
Overnight Allowances Day Allowances
Normal Rate Reduced Rate Detention Rate 10 hours or more 5 hours but less than 10 hours
€125.00 €112.50 €62.50 €33.61 €14.01

 

Table of Domestic Subsistence Rates effective from 5 March 2009 to 30 June 2015
  Overnight Allowances Day Allowances
  Normal Rate Reduced Rate Detention Rate 10 hours or more 5 hours but less than 10 hours
Class A* €108.99 €100.48 €54.48 €33.61 €13.71
Class B* €107.69 €92.11 €53.87 €33.61 €13.71

* Class of Allowances, discontinued with effect from 1 July 2015 (the rates have been standardised for all employees per the first table above).

2. Distance Requirement changes

The revised distance requirements can be summarised are as follows;

1. Overnight allowance – an overnight allowance which covers a period of up to 24 hours from the time of departure, as well as any further period not exceeding 5 hours, will only be payable free of tax in respect of an absence which is necessarily spent overnight at least 100km away (previously 50km) from the employee’s home and normal place of work, and

2. Day allowance – a day allowance, which applies to a continuous absence of 5 hours or more, will only be payable free of tax where the absence is not at a place within 8 km (previously 5 km) of the employee’s home or normal place of work.

Useful links:

•http://bit.ly/1eXvQcS

• http://www.revenue.ie/en/practitioner/ebrief/2015/no-632015.html

Help:

• If you have any questions in relation to the reimbursement of expenses for travel and subsistence made to employees and directors, please phone or email your usual contact at Baker Tilly Ryan Glennon.

Press contact

For further information or commentary on the above, please contact Aoife Walsh, Marketing 01 496 5388 email aoife.walsh@bakertillyrg.ie