It’s not a popular part of modern business life, but there may come a time when an employee makes a travel expenses claim. A business trip may seem like a luxury, but it does bring with it unexpected difficulties.
For instance, can your staff member claim for meals, overnight hotel stays, or a taxi trip? This guide explains your legal standing once your staff member returns to your office with a bundle of receipts.
Defining work travel expenses (Ireland)
Employee travel expenses aren’t easily defined, but there are a number of examples to turn to. These can help make the process a bit easier.
- Daily commute: So long as your workplace isn’t “permanent”, then this expense is down to the employee to pay (so claiming travel to work reimbursement isn’t an option).
- Business-related trip: This may be to visit a customer or a client away from your normal place of work. It’s an expense your business will have to fund.
Remember that whether or not your staff member can explain travel expenses depends on your industry. The place where they work is a permanent workplace if they attend regularly. A temporary workplace is where staff are only around for a small amount of their time.
Claiming travel expenses for work
Okay, so if your employee is off on a business trip, what can they claim? Here’s a list of a few common expenses—or “subsistence” as the term goes. Remember that, as you’re funding these for your staff member, there are certain tax and reporting duties to follow:
- Accommodation
- Meals
- Parking fees
- Vehicle hire
- Toll charges on motorways (and congestion)
- Any business-related calls
Subsistence allowance (Ireland) depends on what you’re willing to provide an employee on their trip. But you must pay back the employee for any of the above costs. But there are exceptions to remember.
You can only cover so many things, after all. And non-essentials are the responsibility of the employee to cover. It’s advisable that you draw up a travel expenses policy to explain what you will, and won’t, pay for during trips. In that, you can also set a travel allowance for employees they can refer to whenever they need to head off on a trip.
Mileage allowance (Ireland)
You should also be aware of mileage expenses, which you pay to staff members based on the amount of miles they have driven. Employee mileage allowance varies year by year—and country by country—but in Ireland it falls into various bands.
Self-employment advice
Finally, what about self-employed travel expenses? You’ll need to register for self-assessment. It’s where you calculate income tax and what you owe for each tax year.
If you’re, for instance, a freelancer then you can make tax deductions for some expenses as you’re essentially a business owner—this will reduce the amount of tax liability you face.
The following are examples of reductions to your taxable annual income:
- Insurance costs: If you’re paying for premiums, then these are allowable expenses.
- Travel expenses: Vehicle expenses such as fuel, repairs, and insurance cover are available for tax relief.
- Rent: Funding your operational costs will take up a lot of your overhead. But the likes of rent, water rates, electricity, and heating are claimable as expenses.
- Marketing fees: If you’re promoting your services, then the good news is this option is also tax-deductible.
Need more help?
If you require further assistance with travel expenses, you can call us today on 0818 923 923.
