Changes to Subsistence Allowances & Flat Rate Motoring Expenses

Paying tax- Crowe Ireland

Subsistence Allowances

The Department of Public Expenditure and Reform has recently announced significant changes to the standard rate of subsistence allowance in Ireland.

Following a review of the rates, the standard overnight rates have increased by 7%, while the day rates remain unchanged. A separate Vouched Accommodation Rate may also apply for Dublin, reflecting the difficulties in sourcing suitable accommodation in the capital.

Flat Rate Motoring Expenses

Changes have also been announced to the structure and rates of the scheme for reimbursement of business mileage. This is of particular importance to employers in the private sector who reimburse their employees based on the Civil Service rates.

Some of the key changes include:

  • An increase in the number of distance banks, allowing a more nuanced scale that will focus on employees who do significant work related mileage
  • A lower reimbursement rate for the first 1,500km
  • An increase in the rate for those doing between 1,501km to 5,500km per annum
  • More beneficial compensation rates for cars with lower engine sizes and emissions

The revised rates are based on a methodology that reflects changes in commuter behaviour, technology, road ownership and car ownership conditions.

The new rates apply from 1st April 2017, and the Departmental Circulars can be downloaded from the following links: Subsistence Allowances, Motor Travel Expenses

For any additional information or help contact our tax team.