The payment of Travel and Subsistence allowances to employees

This can be done either on a vouched (receipts) basis or by applying agreed rates of allowance in accordance with Revenue’s guidelines. Some detail with regard to same and the various rates of tax-free travel and subsistence payments which can be paid to employees is contained within our article.

We have noted below a number of key practical areas, which should be borne in mind by Employers when considering the payment of travel and subsistence allowances:

  • The importance of retention of documentation and records to support any payments is again paramount. This applies equally to a vouched or flat rate system of reimbursement being applied. The level of documentation required includes all details pertaining to the business journey, its duration, purpose etc. We would typically advise that receipts are retained and employee business travel is supported by way of formal travel expense claims or other similar documentation.
  • Establishing the ‘normal place of work’ is important in order to determine the level of tax-free expenses which can be paid to employees. In many cases (e.g. office based employees), the normal place of work might be apparent, however the issue is open to further review/interpretation in cases such as travelling appointments or site-based workers. Professional advice should be sought if there is any doubt.
  • Specific rates and rules apply to cases where employees are required to travel to a location outside of Ireland. The rates can vary in application from one country to the next, and hence it is always advisable to consult in advance prior to agreeing flat rate to be paid to employees in respect of overseas travel.
  • Company Directors, including resident and non-resident non-executive directors, are entitled to reimbursement in cases of travel to attend board meetings, subject to satisfying certain conditions.

Return to: Tax Issue - Summer 2018

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Mairead O'Grady

Taxation Partner

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