Mileage and subsistence on a long term contract

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tadpole

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I am an IT contractor working through my own limited company. The company is registered in Cork, where I am renting a house. I have got an 18 months contract in Dublin. I come to the capital on Monday mornings and go back to Cork on Friday evenings to spend the weekend at home.

The question I have is whether I can claim mileage/travel expenses for the Monday trips to and Friday trips from Dublin + pay myself a per-diem for Mon-Fri based on the civil service subsistence rates as outlined in IT54?

Thank you.
 
Revenue issue the following leaflets :-

Motoring expenses
[broken link removed]
Subsistence expenses
[broken link removed]

Hope these are of help
 
Graham_07 said:
Revenue issue the following leaflets :-

Motoring expenses
[broken link removed]
Subsistence expenses
[broken link removed]

Hope these are of help
Click to expand...
Thank you for the links, Graham. I have seen these leaflets already and they do not really answer my questions. These guidelines mostly deal with reimbursement of the expenses incurred by an employee on an occasional travel on business. My case is different, so I am hoping to get an advise from someone who has similar experience, or/and understands the legislation well.

Thanks anyway, I appreciate any comments and suggestions!
 
Hi there,

IT Contractor also. I was claiming mileage to and from work. Was great as it was working out about 5k a year in expenses!!. But then I had to pay it all back as I found out I was in the wrong!!.

In a nutshell......

You can't claim mileage to and from your "normal" place of work. So if you work in the same building everyday for 18 months this is your normal place of work. If you are required to travel to a customer site from your office, this can be deemed as a business expense.

You can rack up a few Bull-s miles in your expenses form, but dont go crazy with it or theres a chance you could get audited. Just say you had to deliver a server or do a callout here and there. And remember that revenue keep the records for 7 years so they can back date it if your caught...

I also head from my accountant that revenue are paying particular attention to IT contractors lately due to the large amount or expenses being claimed..
Think some lads are buy 42" LCD's and putting them down as "office equipment" deadly.....

Hope this helps.
 
If you have a company and it is registered in cork where you live then that is your normal place of work ,regardless of whether you ever work at that location

The only think with long term travelling is that while you can always claims actual expenses incurred ,hotels etc the standard civil service rates are only supposed to apply for a certain period,6 months
Unless you have breaks from that location ,after which you can resume claiming the full rates
 
capall said:
If you have a company and it is registered in cork where you live then that is your normal place of work ,regardless of whether you ever work at that location
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What's your source for this, capall? The [broken link removed] refers to 'place of work', not 'place of registration of company'.
 
BOC_ARDEE said:
IT Contractor also. I was claiming mileage to and from work. Was great as it was working out about 5k a year in expenses!!. But then I had to pay it all back as I found out I was in the wrong!!
Click to expand...
Hi BOC_ARDEE,

Thanks for sharing your experience with us! Could you outline it in a bit more detail please? Were you claiming mileage to and from work on daily basis or were you travelling to the place where you were contracting weekly as I am doing? When did you have to pay it all back? Were you actually audited? Did Revenue provided you with a document explaining why you could not claim the mileage?


I actually spoke with Revenue a couple of months ago, explained my situation in detail and asked whether I could claim the mileage from Cork to Dublin and back on weekly basis + pay myself per-diem within the civil service rates as outline in IT51. The reason why I do not consider my current client's office to be a "normal place of work" is that the nature of my IT consultancy work takes me to different places - this particular contract is in Dublin, but my next one can be in Cork or London, or South Africa, or somewhere else. I was just lucky to secure an 18 months contract this time.

The tax officer who I was talking to said that he did not see anything particularly wrong with what I was going to do and that I should not have any difficulty explaining this to a Revenue auditor if it ever comes to an audit. However he could not grant me a formal approval as they do not have guidelines on how long one could be away from his/her "base" before it is no longer considered to be a "normal place of work". I asked him to put this in writing and he sent me a letter, which vaguely said that as long as I am within the limits set out in IT51 and IT54 I should be legal.

Basically, as I understand it after talking to a number of IT contractors and a couple of accountants, this is a grey area and Revenue would not give any formal advice in such cases. So all we can do, is to stay within reason and claim actual expenses incurred solely in the course of conducting the business or pay a reasonable per-diem to cover such expenses. This does not guarantee that we won't have a problem in case of an audit, but as long as one does not over-do it (e.g. start claiming day-to-day travel to the office as mileage or put 50" TV as a business expense) he/she should be fine. The important point is to be sure that you are in the right yourself, so you can present your case if asked to.
 
When you are contracting through a limited company ,your registered office is your place of work. Revenue will not argue with you on this.

There is nothing untoward about this,if you are an IT contractor without work,you will be spending weeks in your registered office trawling for work. If you were an IT contractor and your registered office is not regarded as your place of work,then it would not be financially viable for you take work that involved being away from home as you would not be allowed claim actual expenses or the civil service rates.

Now obviously if you live in Dublin and set up a company registered in cork and work through that,then you would not expect to get expenses as if you were travelling from cork,but this would be because you are not actually incurring any expenses

IT 51 is pretty ok to interpret,IT 54 is trickier in terms of how long you can claim the full rates for and what constitutes a break from one location
But in these cases revenue are usually reasonable once you are genuinely travelling .
 
capall said:
When you are contracting through a limited company ,your registered office is your place of work. Revenue will not argue with you on this.
Click to expand...
Any source for this?
capall said:
But in these cases revenue are usually reasonable once you are genuinely travelling .
Click to expand...
Claiming for travel to/from your daily place of work on a long term contract does not seem like genuine travel to me.
 
Claiming for travel to/from your daily place of work on a long term contract does not seem like genuine travel to me

Why not ?

That is the nature of contract work,most IT contractors would love to have work in their home town or to be able to work from home but this is not always an option
 
capall said:
When you are contracting through a limited company ,your registered office is your place of work.
Click to expand...

This is totally incorrect. I run an accountancy practice and some of our technology contractor clients use our address as their registered office address. There is no way they could convince Revenue that this is their "normal place of work"
 
From IT54, definition of "normal place of work" (boldfacing & underlining done by me ) Note business premises, not registered office as Ubiquitous also said.​

Normal place of work
“Normal place of work” is the place where the employee
normally performs the duties of the office or employment. In
most cases, this should not give rise to difficulty.
The employer’s business premises will be regarded as the
normal place of work for the employee where:​


Travel is an integral part of the job involving daily
appointments with customers
or
​
​

​

The duties of the employment are performed at the
various premises of the employer’s customers but
substantive duties are also performed at the employer’s
business premises.
The employee’s home would not be regarded as the normal
place of work unless there is an objective requirement that the
duties of the office or employment must be performed at
home. It is not sufficient for an employee merely to carry out
some of the duties at home.
Usually, the employer will provide the facilities necessary for
the work to be performed at the business premises. Even
where the employee has to do some work at home or to keep
some equipment at home, the place where he/she resides is a
matter of personal choice and it would not be regarded as a
place of work.
Day allowances do not apply to employees who do not have a
fixed place of work.​

​
 
I think you are missing the point here .

For an IT contractor who is a proprietary director their own limited company is their employer not whoever they are currently consulting or contracting with

Do you guys seriously make a living giving tax advice ?
 
capall said:
Claiming for travel to/from your daily place of work on a long term contract does not seem like genuine travel to me

Why not ?
Click to expand...
Well, because it is your daily place of work. The spirit of the Revenue approach is clearly to allow expenses for legitimate travel above and beyond that of a typical employee. Travel to/from your daily place of work in a long-term contract is certainly against the spirit of the regulations.
capall said:
That is the nature of contract work,most IT contractors would love to have work in their home town or to be able to work from home but this is not always an option
Click to expand...
Just as most employees would love to have work in their home town or work from home, but this is not always an option. Why should contractors get special treatment for their travel expenses.
 
As Capal said, as a contrator, the employer is not the client but the Limited company.
So the clients business premises would not be regarded as the normal place of work. Most IT contractors limited company's premises would be the home of the contractor.

AS for why contractor should be allowed to claim travel expenses while the employee cannot.... well it's comparing two different siutations and is not an either or answer.
 
You guys are missing the point here...because of the length of the contract, Revenue will deem the whole self-employed scenario as a sham to enable the payment of civil service mileage rates as a form of tax-free payment. The contractor is in effect a de facto employee based in one location and cannot claim travel expenses.
 
This not a self employed situation

To do what you say revenue would have to use anti avoidance legislation to look through the legal company of the IT contractor and declare it a sham

This is something they have never done and are never likely to try and do as it would be quite a legal minefield
Also it is not something which is of concern to the revenue as an area of abuse.
 
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