So you’ve setup your limited company and you keep hearing people saying ‘Are you claiming Subsistence’. Of course you nod but you really don’t know what the hell they’re talking about. So, if that’s the case you’ve come to the right place. Subsistence is basically ‘receipt free’ expenses that you can claim tax free from your company for journeys relating to work. Read more to learn how to master this to your best advantage.
What Will You Master In Subsistence Rates
- What is Subsistence
- FAQ’s about Subsistence Rates in Ireland
- What are the flat rates of Subsistence
What is Subsistence
So subsistence is basically expenses incurred during business journeys, but you can’t claim for trips like journeys to home and temporary place of work or the office, or temporary offices. Also travel between separate employments is taxable, jezz give us a break Mr Tax man.
Although employees working at a number of locations on a daily basis in the same employment can claim subsistence, don’t forget as a director you’re an employee too (if you’re registered as one).
Here is an example that will make sense “John is employed and owns a design studio and his duties involve working, firstly at the office (Location A), then the photography studio (Location B) and, lastly, at the sales office (Location C) on a daily basis. The reimbursement of expenses between office (Locations A) and photography studio (B); and Locations B & C may be made free of tax. However, any reimbursement of expenses of travel between his home and the office (location A) (the first location) and the photography studio (Location C) (the last location) and home is taxable.”. So leaving home to one of the daily offices and returning home from a daily office you can’t claim. Kapish!
FAQ’s about Subsistence Rates in Ireland
Here are some of the travel reasons you can claim for
- One off Job
- Work at a number of locations
- Post normal work hours (taxi home)
Here is how you can reimburse employees, we’ll explain them a bit later.
- Flat Rate Scheme
- Actual Expenses
- Round Sum (taxable as pay)
Employee make any claims towards expenses?
If yes (such as claim on motor expenses than are taxable for amount reimbursed)
Here are some of the travel times that revenue group your trips, never roundup, honestly!
- 5 – 10 hours
- 10+ hours
If over night, how many?
- 1-14 nights
- 14-28 nights
- 28+ nights
- [to a limited to 6 months in one location]
Here is how you work out what class you are. Revenue use classes to group people by salary.
- Do Earn under €69,659? If ‘No’ then Class A
- Do Earn under €69,659? If ‘Yes’ then Class B
What are the flat rates of Subsistence?
Schedule based on current Civil Service Subsistence Rates for absences within the State. Yes, yes you’re not a Civil Servant, but you can use their rates.
Table of Domestic Subsistence Rates effective from 5 March 2009
|Overnight AllowancesDay Allowances|
|Normal Rate||Reduced Rate||Detention Rate||10 hours or more||5-10 Hours|
|Class A *||€108.99||€100.48||€54.48||€33.61||€13.71|
|Class B **||€107.69||€92.11||€53.87||€33.61||€13.71|
Class A*: (As in how much you’re earning)
Full PRSI – €69,659
Modified PRSI – €66,179
Class B**: (As in how much you’re earning)
Full PRSI – €37,536
Modified PRSI – €35,660
Overnight Allowance (hotel bills)
Overnight Allowance (over 24 hours absence)
An overnight allowance covers a period of up to 24 hours from the time of departure, as well as any further period not exceeding 5 hours, which is necessarily spent overnight away from the normal place of work. Kapish!
Where an absence exceeds 24 hours, a day allowance at the appropriate rate may be paid only if the last period of 24 hours is exceeded by 5 or more hours.
Normal Rate: This is payable for absences up to 14 nights, Reduced Rate: This is payable for each of the next 14 nights, Detention Rates: This is payable for each of the next 28 nights, Absences Over 56 Nights: Employers should make application to the appropriate Revenue office with a view to agreeing the rate to be applied.
The period of subsistence at any one location is limited to six months. Any departure from this position e.g. for continuation of the subsistence period for a short duration, is considered on the circumstances of the individual case.
Continuous Absence (If your worried about this call an accountant)
Certain absences from a particular temporary location would not be regarded as breaking the continuity of stay for the purpose of reducing the subsistence allowance. These absences would include absences of not more than two nights due to a return on official business to the employee’s normal place of work, plus any nights of a weekend or public holidays or return visits home or annual leave. These absences would not, of course, qualify for subsistence allowance.
Where employees are working as team members and it is necessary for junior team members to stay in the same accommodation as senior team members who qualify for a higher rate of subsistence, such higher rate may also apply to the junior team members.
5 to 10 hours absence
over 10 hours absence
A day allowance applies to continuous absence of 5 hours or more, provided the absence is not at a place within 5 kilometres of the employee’s home or normal place of work. There are two categories of day allowance, namely, 5 to 10 hours absence and over 10 hours absence.