Travel and subsistence
This is a necessary part of doing business in Ireland. If Directors or employees use their personal cars or money in order to further the employers business goals then quite correctly this should be repaid. There is plenty of information on the revenue website about this. Look up IT54.
These IT54 guidelines are not enshrined in law, rather they are guidelines issued for the civil service that private business seek to adhere to. From experience if a revenue inspection isn’t showing a “yield” for Revenue, then they tend to pick on travel and subsistence. Essentially though, a thorough knowledge of this area is vital for any business that wants to make money.
It virtually supplements wages. It is tax free to employees and Directors and tax deductible to a business. No employer PRSI is payable on these payments either.
There are traps though
The home office:
It makes huge sense for many business owners to set up an office in, or adjacent to their homes. It aids childcare concerns. Cuts down on carbon emissions by not having to join the commuters on the highways. Yet for some reason, the tax man doesn’t see it this way, and does not allow mileage to start from a home office, but he does from a non home based office. Go figure that one out!
There are many apps out there, but most don’t seem to work easily in an Irish context.
The 100km made up rule
This is where the overnight allowance is not payable tax free if the Director or employee is within 100km of base. I asked a Revenue officer what happens if the employee was on Inishturk Island, 14 km offshore from Westport. The answer I received: “That’s different”.
There are more anomolies that what I have listed, but you get the idea.