Claiming Tax-Free Expenses

A: Where you necessarily incur expenses of travel (and subsistence relating to that travel) in the performance of your work, the reimbursement of such expenses may, within certain limits, be made tax-free.

The reimbursement of expenses tax-free has been an area of great focus from the Revenue Commissioners, particularly for contractors. You need to ensure that you are applying the correct tax treatment to any expense payments made and that you are maintaining sufficient documentary evidence of these expenses should Revenue choose to review your records.

The main area of focus for Revenue is the issue of what is deemed home to work travel.

If an employee/director receives expense payments in respect of travelling to and from work, such expense payments are taxable and subject to PAYE.

In cases where a contractor is spending the vast majority of their week working for a single client and are required to attend the same site throughout the week, Revenue have stated that travel from a home office to this site should be regarded as home to work travel and therefore any expenses reimbursed in respect of this travel are taxable in their opinion.

Contractors should have their expense claims regularly checked by their accountant to ensure compliance with the guidelines.

 

Date published 2 Feb 2018

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.