Tax

Changes announced to flat rate motoring expenses

The Department of Public Expenditure and Reform have announced significant changes, from 1 April 2017, to flat rate motoring expenses and standard rates of subsistence allowances that apply to the Civil Service. The new arrangements will also impact the private sector, as the Civil Service rates provide the benchmark for Revenue approved flat rate allowances.

Revised Arrangements

Motoring expenses

  • the number of distance bands have increased from two to four;
  • a lower recoupment rate will apply for the first 1,500km;
  • an increased recoupment rate will apply from 1,501km to 5,500km, allowing for more beneficial recoupment rates for employees who do significant work related driving;
  • there are more beneficial rates for cars with lower engine sized and emissions;
  • mileage to date in 2017 will count towards aggregated mileage for the year; and
  • the revised motor travel rates are set out in Appendix 1 and are effective from 1 April 2017.

Subsistence expenses

  • the standard overnight rate of subsistence allowance has increased in line with changes to the Consumer Price Index, while both day rates remain unchanged;
  • a separate Vouched Accommodation (“VA”) rate may apply where employees are claiming an overnight allowance in Dublin;
  • the VA rate which may be claimed consists of the vouched costs of accommodation up to a limit of the standard overnight rate (€133.73) plus the appropriate day rate for employee meals; and
  • the revised standard rates of subsistence allowance are set out in Appendix 2 and are effective from 1 April 2017.
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