On April 1st,
those jokers in Revenue the revenue changed the 20-year-old rules surrounding how public service mileage rates are calculated. Basically, they are increasing rates for people doing a higher mileage and reducing the rate per mile for people only doing a small amount of mileage. For the first time, they will also take into account what the engine size of your car is, giving more beneficial rates for lower engine sizes.
Of course, as the private sector uses these rates as reference for paying mileage to employees it will also effect everybody in the private sector.
It got me thinking; what expenses are legitimate and what are not? Our government have been consistently reducing what is and what is not allowable over recent years, so here are some things that you can still claim, and some things that you cannot.
You cannot claim for – Entertaining clients
This is something people find incredible. “What do you mean I can’t claim for the cost of the Michelin star restaurant and the €700 bottle of wine”. Nope revenue will not subsidise your night out.
You can claim for – Business Development
If you decide to have a meeting with a client to discuss the business they have with you and potential business in the future and use that meeting as an opportunity to get to know them better, that’s fine. You can even have the meeting in a Michelin starred restaurant. But be reasonable. I know a client who went to a nice restaurant for a meeting and a meal with 6 clients to discuss a project he was working on and give an informal presentation. He got the restaurant to separate the food and wine bill and only charged the food bill as expenses.
You can claim for - staff entertainment
If for example you have a Christmas party and you invite all staff to it then it is a legitimate expense. If your husband or wife is director in the business and you have a meal with them on a Saturday night, it is not.
You cannot claim – mileage for driving to or from work.
Getting to work and from work is not something you can claim mileage for, unless you are on a train where the annual taxsaver ticket kicks in.
You can claim for – driving during the course of your work day
If you must leave the office for work purposes during the day you can claim mileage at civil service rates.
You can claim for - time away from the office
If you are out of the office for more than 5 hours in a day (and you are still in Ireland) you can claim and allowance of €14.01 for between 5 and 10 hours away.
If you end up on an overnight then you can claim €125. This is regardless of where you stay, so if you get a cheap B&B you could pocket the difference.
You cannot claim for – the match in the Stade De France (well you might be able to!)
When you travel abroad you have two options. One; you can keep all the receipts for taxi’s, meals, hotel etc. and claim all legitimate expenses that way. Or two; you can claim the declared overnight rate for where you are staying. Paris has one of the highest overnight rates at €292, I just checked trivago and found some nice hotels in the city centre around €110, you are perfectly entitled to claim the €292 and use the difference to pay for your match tickets.
You cannot claim for – work uniforms
This is one that often causes controversy. You cannot claim for the cost of your uniform. In fact there was a test case in the courts where a barrister tried to claim the cost of their wig, which obviously has very little other use than in court, and revenue won the case.
You can claim – flat rate expenses
As revenue won’t allow you claim for a uniform, they instead will allow certain occupations claim a set amount each year as an allowance (not a credit) for the purposes of carrying out your occupation where specialised clothes or personal equipment is required. For example; a nurse who must provide and launder their own uniform will get an allowance of €733 per year, if that nurse has their uniform supplied and laundered the allowance drops to €258. Journalists get an allowance of €381 per year.
It is important to realise this is an allowance and not a credit.
You cannot claim for – Health insurance
Well technically you get tax relief on the premiums but it is deducted at source at a rate of 20%. This means the premium you pay to the health insurers cannot be claimed “again”.
You can claim for – medical expenses
This is probably the one expense we see most ignored by clients. If you incur medical expenses that are not reimbursed elsewhere (for example by your health insurer), then you can get 20% of the cost back. These expenses include GP visits, consultant costs (including maternity), prescription medicines and many more medical expenses.
You cannot claim for – other stuff
There are some things that you once were able to claim for that you can no longer claim for. These include things like mortgage interest relief on new mortgages taken out and tax relief on things like water, sewage and refuse charges you paid for at home.
Giving out about paying tax and not claiming all your entitlements is a bit like giving out about a government when you never bothered going to vote because it was raining. Most people who go to the bother of filling out a tax return get a refund. You should too.