25 September 2015
The Department of Finance (DOF) has recently conducted a consultation in relation to the tax treatment of travel and subsistence expenses for employees and office holders, including company directors.
This review of the law and practice in relation to (a) the granting of tax deductions in respect of expenses of travel incurred by employees and office holders, and (b) the circumstances under which expenses of travel may be reimbursed free of tax by an employer to an employee or office holder, is of significance to all employees and company officers but in particular non-executive directors who may incur travel expenses to fulfil their role.
According to the consultation paper, the areas which have in recent times given rise to differing views on the tax treatment of expenses of travel include:
The issue is of concern to directors in particular as expenses of travel incurred on journeys from home to work, work to home and between separate employments do not qualify for a tax deduction.
Specific instances where a tax deduction would not be granted include the travel expenses incurred (i) by a non-executive director on the return journey from home to attend a board meeting, (ii) by an external examiner travelling to a third level institution, and (iii) by a director (generally of a small company) on the return journey from home to a workplace.
The consultation is now closed but the DOF and the Office of the Revenue Commissioners have indicated that they intend to coordinate their response to the consultation, if an examination of the relevant legislative provisions is necessary.