Written Answers. - Tax Allowances.
Trevor Sargent
Question:
82
Mr. Sargent
asked the
Minister for Finance
the cost to the Exchequer in terms of foregone revenue due to the tax-free status of mileage expenses granted in 2001 for engines up to 1138cc, 1138-1387cc and over 1387cc; and the total number of miles claimed in each category.
[25280/01]
I am informed by the Revenue Commissioners that the position in relation to the treatment of mileage expenses under the income tax system is as follows.
Where an employee uses his or her car in the course of his or her employment, he or she is entitled to claim a tax deduction under section 114 Taxes Consolidation Act, 1997 in respect of expenses that are "wholly, exclusively and necess arily incurred" in the performance of the duties of the employment. No relief is due for the cost of travelling to and from the place of employment.
Where the employer reimburses the employee for such expenses, these expenses are in strictness taxable in the hands of the employee under section 117 of Taxes Consolidation Act, 1997, subject to a claim for relief under section 114. In practice Revenue allow for the making of payments without deduction of tax where the employer uses rates of reimbursement which do not exceed the schedule of Civil Service mileage rates. The Revenue practice is based on the premise that the Civil Service mileage rates do no more than reimburse employees for tax allowable expenditure, without providing any personal gain to them.
There is, therefore, no revenue foregone by the Exchequer arising from treating these payments as expenses like any other.
I am informed by the Revenue Commissioners that, as income earners are not required to include mileage allowances in their tax returns, there is, therefore, no statistical basis on which they can provide an estimate relating to the amounts involved.
As regards the Deputy's inquiry about the number of miles claimed in relation to each category of engine size, this information, which relates not only to bodies in the Civil and Public Service but in the private sector as well, is not centrally compiled by the State. It could involve a disproportionate effort to collate this for the public sector.
Question No. 83 answered with Question No. 77.
