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New Mileage and Subsistence rates from April 1st 2017

Revenue have issued new mileage and subsistence rates effective from April 1st 2017. In light of this we also separately provide an update on Revenues view of the tax treatment of the reimbursement of Expenses and Travel and Subsistence to Employees.

Our mileage and subsistence workbook has also been updated with the new rates. We will be emailing this out separately but please contact us if you need a copy.

Details on mileage provided first. See subsistence below

New Rates per Km

Engine Size 0-1200cc 1200-1500cc 1500cc and over
Band KM Range Cents per KM Cents per KM Cents per KM
1 0 to 1,500 37.95 39.86 44.79
2 1,501 to 5,500 70.00 73.21 83.53
3 5,501 to 25,000 27.55 29.03 32.21
4 Over 25,000 21.36 22.23 25.85

This is the first time there has been a fundamental review of the formula used to calculate these rates since 2005. The new rates have been introduced under the terms of the Haddington Road Agreement.

The revised system takes account of both overhead and running costs of using a vehicle for business purposes. The overhead costs formula takes account of the following:

  • A replacement rate that assumes that a car is replaced every four years
  • Insurance costs based on a 35 year old civil servant, driving a Volkswagen Golf with a two year no claims bonus
  • Car costs calculated with reference to the top 10 best-selling cars
  • Car tax costs based on the C02 emissions of the top 10 best-selling cars
  • Servicing and repair costs based on the figures given in the AA Cost of Motoring report each year
  • Fuel costs

The new formula also provides a methodology that can be easily updated with new data (such as changing fuel, vehicle and insurance costs). The new rates also take into account the need to encourage the use of more environmentally efficient vehicles and methods of travel, in keeping with policies to reduce carbon emissions.

There are now four distance bands now instead of two, each providing a different rate per kilometre based on the apportionment of the overhead costs of running a car. It’s intended to maximise benefit to those who undertake significant mileage, of more than 1500km, each year.

Subsistence Rates

The ‘five hour’ rate of €14.01 and ‘ten hour’ rate of €33.61 remain unchanged.  

A new overnight rate of €133.73 will apply from 1st April, in recognition of the increasing costs of overnight accommodation.

Due to the exceptionally high cost of hotel accommodation in Dublin, especially at peak periods, a new vouched rate applies, up to a maximum of  €167.34 (the new overnight rate plus the 10-hour rate), for which a hotel receipt must be provided.

See further details at http://www.revenue.ie/en/tax/it/leaflets/it54.html

Subsistence allowance for travelling abroad has also been revised. The revised rates are available to view http://circulars.gov.ie/pdf/circular/per/2017/07.pdf

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Joe Cunnane Practice Owner TRA Professional Services       Qualifications:  FCA Chartered Accountant & AITI Chartered Tax Advisor Joe has over 20 years experience working in both private practice and industry ... Read More »