Travelling expense to collect rent etc.

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There are motor mileage rates posted on revenue.ie in line with civil service rates for "individuals who are not obliged to travel in the normal course of their duties, but who occasionally use their car for business purposes" @ 38.40 cent per mile.

I have to travel a 66 mile roundtrip to a rental property to collect rent (tenant does not have a bank account) and for various repairs. Is it okay to claim this as a travel expense?
 
I don't think you can claim this expense, I tried it before and it wasn't allowed.
 
I disagree - All expenses related to managing a rental property are allowed!
 
For what it's worth [broken link removed] states:
What expenses can be claimed?

Broadly speaking, in calculating your rental expenses you can deduct expenses so long as they-


  • ...
  • Management, i.e., actual cost of collection of rents, advertising, etc.
  • ...
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It's not totally clear from this brief summary if this includes motoring/travel expenses to collect the rent. If in doubt get independent, professional advice. Why not have your tenants lodge the rent to your account directly and save yourself the time, hassle and cost in the first place?
 
i thing mileage rates only apply to limited companies. sole traders (such as part-time landlords) can only deduct actual expenses such as petrol, % of ins/servicing/depreciation etc,
 
Gosh, I'm really shocked - what a dreadful service if you can't trust what they're telling you over the phone! I would prefer if they said they didn't know or would have to check and could I call back!
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Indeed. What is the point in ringing them at all? Anyone can guess the answer.

Why not get rid of all these people who answer the phones in revenue? It would make things less confusing, and might even save the tax payer some hard earned money.
 
"Why not have your tenants lodge the rent to your account directly and save yourself the time, hassle and cost in the first place?"

They are from Poland and don't have a bank account. They tried to open one and were unsuccessful. They are really nice people, but their English is not so good - perhaps they just didn't understand what the bank's requirements were? If they asked me to help with the bank, I would, but I don't want to offer in case they think I'm being nosey!

Anyway, it gives me an opportunity to check the state of the house on a monthly basis so I'd prefer to carry on collecting the rent myself.

I finally got through to revenue today, after a lot of trying, and spoke to a very helpful person who confirmed that you can in fact claim the 38.40 cent Civil Service Rate per mile for rent collection or other visits to property such as to allow workmen access for repairs etc.

The details in AAM's property investment FAQ's are, whilst very helpful, not up to date - they show 20% over 5 years depreciation for furniture etc. when the actual rate is now 12.5% over 8 years - perhaps someone would like to update and maybe add travelling expenses to the list?

Revenue's IT70 'Guide to Rental Income' is helpful, but also a bit vague.

Thanks for your comments!
 
Your tenants don't need a bank account to lodge money into your account if the call into the local bank themselves.
 
Unregistered said:
They are from Poland and don't have a bank account. They tried to open one and were unsuccessful...
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Fair enough. I was just curious and mentioned it in case you hadn't thought of it.

I finally got through to revenue today, after a lot of trying, and spoke to a very helpful person who confirmed that you can in fact claim the 38.40 cent Civil Service Rate per mile for rent collection or other visits to property such as to allow workmen access for repairs etc.
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As ever you have to be careful here since (a) Revenue have been known to give out incorrect information in the past (I know this from experience) and (b) they offer no guarantees about the information provided. If it is incorrect and you act on it but end up owing tax then they will not take the fact that they gave the information out in the first place as a valid excuse. This may not sound fair or logical but that's just the way it is. If in doubt get independent, professional advice/verification.

The details in AAM's property investment FAQ's are, whilst very helpful, not up to date - they show 20% over 5 years depreciation for furniture etc. when the actual rate is now 12.5% over 8 years - perhaps someone would like to update and maybe add travelling expenses to the list?
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Can you point me to where these depreciation rules are laid out and I will see about updating the FAQ? Thanks.

Revenue's IT70 'Guide to Rental Income' is helpful, but also a bit vague.
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Well it is only a brief overview/summary. Anybody in the rental property business would really want to make themselves familiar with more detailed information that just that summary (e.g. the relevant tax legislation) and/or get independent, professional advice on the tax and accounting matters involved.
 
The idea initially was to set up a standing order for automatic payment each month, but they had difficulty opening an account.

There are 2 couples sharing the house and they all work full-time, 6 days a week and are unable to get to the bank during they day - so they've said it's not an option for them to call in to their local branch to make lodgements.
 
Unregistered said:
"I finally got through to revenue today, after a lot of trying, and spoke to a very helpful person who confirmed that you can in fact claim the 38.40 cent Civil Service Rate per mile for rent collection or other visits to property such as to allow workmen access for repairs etc.
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I very much doubt if this is correct, on two counts.

The tax code specifically excludes self-employed people (including landlords) from availing of the tax-free civil service motor and subsistence rates for employees.

One of the Revenue Tax Briefings some years ago addressed this issue and stated clearly that motor expenses were not an allowable expense for rental income. This has not been officially withdrawn or contradicted in the meantime.
 
That's amazing Ubiquitous, the person I spoke to seemed well informed and helpful and I explained in detail exactly what the situation was and where I lived in relation to the property etc.

I think I'll have to get some further professional advice on this.

Clubman, the link to the rental income FAQ is at
(sorry, new to this and don't know how to link properly)
and states

WHAT EXPENSES CAN I CLAIM?

In calculating your taxable profit, you will be allowed deduct any expense incurred wholly, exclusively and necessarily in the letting of the property:
interest paid
depreciation of furniture and equipment ( 20% each year for 5 years)
insurance
maintenance
payments to a letting agency
refuse charges
maintenance
legal fees in drawing up leases
 
Unregistered said:
That's amazing Ubiquitous, the person I spoke to seemed well informed and helpful and I explained in detail exactly what the situation was and where I lived in relation to the property etc.
Click to expand...

Years ago a helpful and seemingly well informed Revenue official told me in no uncertain terms that the October 31st pension contribution deadline only applied to self employed individuals and not also to PAYE employees who were contributing to a personal pension plan. They were wrong.

Clubman, the link to the rental income FAQ is at
(sorry, new to this and don't know how to link properly)
and states
Click to expand...

Sorry - I meant could you post a link to the Revenue information about depreciation that differs from the existing information in the AAM FAQ please so that I could verify it before updating the AAM FAQ?

Update: it's OK - I found [broken link removed] and have updated the FAQ.
 
Gosh, I'm really shocked - what a dreadful service if you can't trust what they're telling you over the phone! I would prefer if they said they didn't know or would have to check and could I call back!

The information on the revenue website is in the IT70 leaflet and reads:-

"What expenses can be claimed for Wear and Tear?
If a premises is let for residential purposes and it is furnished, a claim can be made for a wear and tear allowance based on the cost of the furniture and fittings. It will be necessary to retain an itemised list of expenditure incurred each year.

With effect from 4 December 2002 the allowance is 12.5% per year over 8 years.


For the period between 1 December 2001 and 3 December 2002 the allowance was 20% per year over 5 years. Transitional provisions apply allowing the rate of 20% per year over 5 years if the item was acquired
under a written contract before 4 December 2002 and the expenditure was incurred before 31 January 2003.


Prior to 1 January 2001 the allowance was 15% per year for the first 6 years and 10% in the 7th year."

The web address at the top stays on revenue.ie so I can't post a link, but if you put IT70 in the search box and click on 'What expenses can be claimed?' you'll see the details.

What a valuable site AAM is and I'm glad I found out about it in the Indo!!
 
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