Dáil Éireann Debate, Tuesday - 13 February 2024
234. Deputy Willie O'Dea asked the Minister for Finance if he has given consideration to redefining 'normal place of work' in relation to business mileage for employees such as sales representatives who travel from their homes to business appointments, but their head office is based in another part of the country; and if he will make a statement on the matter. [6287/24]
View answerThe legislation governing the deductibility of expenses incurred in employment is contained in section 114 of the Taxes Consolidation Act 1997. To qualify for tax relief under this section, any travelling expenses must be necessarily incurred in the performance of the duties of the relevant employment. For all other expenses, they must be wholly, exclusively and necessarily incurred in the performance of the duties of the relevant employment.
Revenue have advised me that the provisions of section 114 are strictly applied, with a body of case law supporting the interpretation and application of this section. Under this section, the expense must be incurred in the actual performance of the duties of the office or employment or as a direct consequence of those duties and should not arise because of the personal circumstances or preference of the individual. Expenditure incurred by an employee or office holder which merely puts him or her in a position to exercise his or her employment or office would not be regarded as incurred in the performance of the duties of his or her office or employment. Accordingly, travel expenses between a person’s home and his or her normal place of work are not generally tax deductible expenses.
As set out in Revenue guidance, the general position is that the 'normal place of work' is where an employee works on a day-to-day basis, but an employee's home is not usually regarded as their normal place of work. An exception to this is where there is an 'objective requirement' that their duties be carried out at home because they cannot be carried out elsewhere. An employee's normal place of work is a question of fact that can only be considered based on the specific facts of each case.
The specific scenario referenced by the Deputy is a sales rep. Generally, a sales rep will hold what is referred to as a “travelling appointment”. A “travelling appointment” can occur where an employee is required to travel in the course of his or her job and generally involves multiple daily appointments with customers. Where an individual whose job can be categorised as a “travelling appointment” would not otherwise be regarded as having a normal place of work, for the purposes of calculating business mileage, his or her employer’s base will be regarded as his or her normal place of work.
On the other hand, a "business journey" is one in which an employee travels from one place of work to another place of work in the performance of the duties of his or her employment but will generally involve a temporary absence from the normal place of work.
Where an office holder or employee, in the performance of the duties of his or her office or employment, begins a business journey directly from home or returns directly to home, then the expenses of travel and subsistence that may be reimbursed without deduction of tax are the lesser of those incurred on the journey between –
Home to the temporary work location; or
The normal place of work (the office/employers base) and the temporary location.
Where an employee performs the duties of his or her employment at more than one location on a daily basis, the reimbursement of expenses of travel necessarily incurred in travelling between those separate locations may be made tax-free.
As already outlined, the expenses incurred in travelling between a person’s home and their normal place of work are expenses which are not necessarily incurred in the performance of the duties of an office or employment. It follows from this that travel between a person’s home and their normal place of work are not considered to be business journeys.
Further information regarding the “normal place of work” and “travelling appointments” can be found in paragraph 2.2 and 4.3, respectively, of Revenue's Tax and Duty Manual Part 05-01-06, which is available at: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-01-06.pdf.
