A Guide to Irish Civil Service Mileage Rates
Recently, we published a handy guide outlining everything UK-based businesses need to know about HMRC’s business mileage claims. If you run your own business within Ireland, however, then you’re probably aware of the fact that Revenue has a separate set of rules and regulations regarding travel and subsistence.
In this article, we delve into Irish Civil Service mileage rates to uncover everything you need to know about claiming tax relief on the mileage rates and subsistence costs of your business.
Table of Contents
- What is Mileage?
- What are the Current Irish Civil Service Mileage and Subsistence Rates?
- Can Sole Traders Claim Mileage and Subsistence?
- How Should Employees Keep Track of Their Mileage and Subsistence Expenses?
- How Can an Expense Management App Automate the Process for You?
What is Mileage?
Mileage tariffs apply to all Irish businesses where workers are needed to travel for their role.
Employees who drive their own private vehicles for work reasons and pay all costs - including fuel, insurance, and other operating expenses - may claim a mileage allowance. No previous agreement with the Inspector of Taxes is necessary if the reimbursement is in compliance with Revenue regulations and at rates that don't exceed the Civil Service Mileage Rates.
It is critical to understand that employees are not eligible to claim mileage between their residence and the regular place of employment (and vice versa). Only mileage for business trips away from the employee’s “normal place of work” is permitted.
What is a “Normal Place of Work”?
You might be wondering what a “normal place of work” is within this context.
Typically, you will offer the amenities required for your workers to complete their jobs at the normal place of work. Keep in mind that this normal place of work might not be the same for all of your workers, based on their role.
Where your employee lives is not often considered as their “normal” place of employment. There is an exemption to this, however, and that includes if there is an “objective requirement” that their tasks be performed at home. In other words, their responsibilities must be fulfilled at home since they cannot be accomplished elsewhere. It is not an objective requirement if:
Your employee simply performs or chooses to perform their job from home
The activities conducted are incidental (i.e., minor or administrative)
What is Subsistence?
Subsistence costs are expenses incurred by staff while traveling as part of their job. This might entail going overseas on a company project or to meet with clients, for example.
Employees are entitled to reimbursement for expenditures incurred while away from their usual place of employment. Subsistence payments can be made in the following ways:
Using the existing Civil Service subsistence rate schedule
Reimbursing the actual cost of sustenance at no more than the present Civil Service rates
What are the Current Irish Civil Service Mileage and Subsistence Rates?
The Department of Public Expenditure and Reform has announced amendments to civil service rates that will take effect on September 1, 2022, including mileage and subsistence rates. One of these changes includes the introduction of a dedicated rate for electric vehicles.
Because these rates have been approved for use by the Revenue Commissioners, the adjustments affect the private sector as well.
The current mileage rates vary according to the type of vehicle (i.e., car or motorcycle), distance travelled, and engine capacity. Mileage claims for electric vehicle trips, however, should be recorded using the rates relevant to car engine capacity 1201cc-1500cc.
There have also been some notable changes to the Irish Civil Service subsistence rates. The standard overnight rate and daily subsistence rates have risen in accordance with changes to the Consumer Price Index (CPI). For overnight stays in Dublin, a separate Vouched Accommodation (VA) rate remains in effect.
You can see the full, updated Irish Civil Service mileage and subsistence rates on the Revenue website.
Can Sole Traders Claim Mileage and Subsistence?
Sole traders cannot claim mileage or subsistence, but their employees can. Instead, sole traders can claim the actual costs of business travel and should save receipts for vehicle costs, lodging, and other expenses incurred while travelling for work purposes.
When filing an income tax return, it may be essential to add back a percentage of vehicle costs to reflect private spending.
How Should Employees Keep Track of Their Mileage and Subsistence Expenses?
It's crucial that both employees and employers keep accurate records of every work trip. Otherwise, Revenue may request that these payments be subject to salary taxes. The necessary records include:
Address(es) travelled to
Date(s) of the work trip
Purpose of the journey (e.g., to represent the company at a trade show)
The trip's starting location, intended destination, and endpoint
Basis for reimbursement (such as receipt proof or mileage/subsistence rate)
How Can an Expense Management App Automate the Process for You?
It's a great idea to have an automated expense management system, like ExpenseIn, that can maintain detailed digital records of travel related expenses.
ExpenseIn not only allows employers to see all of their workers' travel data, but it also allows employees to effortlessly record their personal and business car mileage claims.
Employers that use the ExpenseIn expenses mobile app for business mileage claims can specify policies such as requiring postcodes. Using Google Maps, our technology can automatically compute the distance between postcodes. To account for things like traffic, you can also establish mileage distance limits, which require your staff to stay within a particular percentage of our calculated distance.
If an employee's claim does not comply with these guidelines, they will be alerted when they submit their expense claim. The system will then explain why the claim is invalid so that the employee will understands how to amend it. Because this procedure is automated, it eliminates the need to closely evaluate expense claims after they have been submitted.
With the ExpenseIn app, you can also enable limits and rates in-line with the Irish Civil Service Mileage Rates. When an employee has exceeded their mileage allowance, they will no longer be able to access certain rates.