Tax and Pension on Travel

I work as an extern examiner for an institute of technology. This works involves attending the institute once a year. I get paid an honorarium for the work and subsistence for the trip to the institute.

I pay pension levy, PAYE, Income Levy and PRSI on the honorarium and the subsistence.

Is there any way to claim back some of the tax and levy on the subsistence part of the payment as it seems unfair.

For example if I was to travel by train to the institute, I would only achieve 45% of the cost of the train fare after deductions.

Any ideas.

No PAYE employee is entitled to to tax free subsistence payments for their travel to work from home (and vice versa).

I work in a PAYE job 40 miles from where I live, and I don't get paid ANY subsistence (taxed or otherwise) to travel to and from my job - so I'd say you're a whole lot better off than I am, or 99% of the PAYE workforce!

I'd say you'd be better off to travel by car and get paid the mileage, if that's an option - it'd still be taxed, but I presume they'd use the civil service mileage rate. Even after deductions it should still more than cover the cost of petrol.

I supose to explain that I live near where I work normally. These jouurneys would only be a couple of times a year.

If I can cover the petrol by getting 45% of the civil service rate, does that not infer that civil servants are profiting by over double the ammount of their expenses.

There are more costs to running a car than just the petrol. Other costs would include insurance, tyres, devaluation due to mileage and all the other points that justify the civil service mileage.

The issue is if I have a contract of employment and the extern work is considered employment.



If I give a similar example. Say a civil servant sits on an interview for a colleague in another part of the country. They need to travel to the interview, however a contract of employment would not apply as it would be a once off occurance.

Would the expenses to travel to sit on an interview panel be taxed in the same manner.

I am also paying pension contributions to a pension I will never get for this work.

Just curious.

If you are travelling to the other IOT from your employer's premises you should be able to get the travel payments free of tax & levies so long as the rate paid does not exceed the civil service rates and you are being paid for actual distance travel and overnight stay if applicable.

The Revenue Commissioners have a booklet on this issue:
[broken link removed]

I would suggest that you print it off, have a read of it(highlighting the key sections) and give it to your payroll department.

Thanks.

The key requirements are:-

The conditions under which the reimbursement to office holders and employees of the expenses of travel and subsistence may be made without deduction of tax are as follows -
(a) firstly, the office holder or employee must be temporarily away from his/her normal place of work in the performance of the duties of his/her office or employment;
(b) secondly, the travel expenses must be necessarily incurred in the performance of the duties of the office or employment; and
(c) thirdly, arising from a long accepted position supported by tax case law, the expenses of subsistence must attach to travelling necessarily incurred in the performance of the duties of the office or employment.

The issue is probably around the interpretation of point (a). I would consider my normal place of work as my main job. The institute would probably counter that the normal place of work is their institute and therefore should be taxed. This is the crux of the matter. The Institute is considering me as an employee, I get a P60, the fees that I get are taxed and also as mentioned above the expenses.

I would be getting the civil service rate and the travel would actually be incurred.

Many thanks

I think that a very important point is the decision as to whether the subsistence payment constitutes 'remuneration' or 'expense reimbursement'.

The Institute seems to be treating it as remuneration which to my mind is an incorrect treatment- I'd agree that the honorarium should be treated as remuneration with PAYE/ levies applied [although you could argue the toss as to whether you are an employee (with tax and levies) or a consultant (you'd have to sort out your own tax but wouldn't be liable to the PS levies) when acting as moderator] but I would feel that it's an illogical treatment to apply to the subsistence. I would definitely take the point up with the Finance Office in the Institute in which you act as moderator, as I suspect that it's a clerical error which needs rectification. Under the current treatment, as you point out, you're effectively receiving c.50% of the subsistence after deductions.

deadlyduck said:

I think that a very important point is the decision as to whether the subsistence payment constitutes 'remuneration' or 'expense reimbursement'.

The Institute seems to be treating it as remuneration which to my mind is an incorrect treatment- I'd agree that the honorarium should be treated as remuneration with PAYE/ levies applied [although you could argue the toss as to whether you are an employee (with tax and levies) or a consultant (you'd have to sort out your own tax but wouldn't be liable to the PS levies) when acting as moderator] but I would feel that it's an illogical treatment to apply to the subsistence. I would definitely take the point up with the Finance Office in the Institute in which you act as moderator, as I suspect that it's a clerical error which needs rectification. Under the current treatment, as you point out, you're effectively receiving c.50% of the subsistence after deductions.

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Reimbursing someone for the cost of getting to/from their normal place of work isn't subsistence, it's additional pay. I think the crux of this is, as the OP said, where is the normal place of work.

Maybe I'm misunderstanding the OP, but I'm basing my posts on the belief that the OP is employed by two Institutes; one is the "Normal" employer, and is ALSO employed by another Institute as an external examiner / moderator. So there are two separate employments, 2 P60's etc... Therefore the OP has two "Normal" places of work, one for each employment.

Leaving aside the issue of whether or not the OP is in fact an employee or self employed (as the original question asked presupposes that they are an employee); the "normal" place of work for the second employment (as external examiner), is the Institute in question. As with any other employment, the employer is not entitled to reimburse the employee tax free for the journey to/from their normal place of work.

So, I don't agree that there's any clerical error, seems to me that they're bang on in their treatment. But if the OP wants, they could ask the Finance Office to check with Revenue, or the OP can ask Revenue themself.

The other interesting point is that the institute in question has 2 locations and I am an extern examiner in both locations and I pay tax on the subsistance to both locations.

I have effectively 3 places of work. My normal job, where I work all the year, and 2 seperate places of work in the one institute.

An interesting point is that the extern (and the external panel member in the case of an interview) is meant to be independant. However how can this independance be achieved if the extern is effectively an employee working in their normal place of work.

It is no big deal one way or another but it is inefficient because if I need to spend 2 days at the institute, the normal way would be to travel by train and get an overnight. In this case I would be down almost 60% of the cost due to tax and levies so the only option would be to drive to the institute on two days claiming mileage.

There appear to be 2 differing opinions from the thread one that I am entitled to the expenses tax free and one that I am not.

I would imagine the institute would have looked into the matter and got advice before deducting the tax.

Is there any mechanism to appeal this outside the institute i.e. by revenue to get a refund of the tax.

It is not that it particularly matters as I am doing the work because I enjoy it and I want to feed back to the educational system, you would not do it (workload and responsibility) for the money (particularly with the outlay and tax) but I think it is an interesting question.

I have emailed the local revenue office for clarrification and if I get a response I will post it here for information.

Reimbursing someone for the cost of getting to/from their normal place of work isn't subsistence, it's additional pay.

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That's definitely the case where you are referring to reimbursement for the cost of going to work from home.
However, if the OP is travelling from one normal place of work to a second normal place of work [analogous to a travelling sales rep], I think it introduces a different factor. My reading of this second scenario is that the travel expenses are payable tax free, but I'd agree that the best route is to resolve it by checking directly with the local Revenue office.

I'd also suggest seeking clarification as to whether the OP is in fact an employee or a consultant when performing this activity.

deadlyduck said:

That's definitely the case where you are referring to reimbursement for the cost of going to work from home.
However, if the OP is travelling from one normal place of work to a second normal place of work [analogous to a travelling sales rep], I think it introduces a different factor. My reading of this second scenario is that the travel expenses are payable tax free, but I'd agree that the best route is to resolve it by checking directly with the local Revenue office.

I'd also suggest seeking clarification as to whether the OP is in fact an employee or a consultant when performing this activity.

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I don't think the OP's situation can be validly compared to that of a travelling sales rep, but even if it were, it wouldn't mean a different treatment would apply to the subsistence; even a sales rep has a normal place of work (the base office, wherever it is), and they can be paid tax-free for all of their repping travel to/from this base. But even in the case of a sales rep, if they live 100 miles from the office, they still wouldn't be allowed their travel between home and the office.

The issue here is that the OP is being paid subsistence to cover the costs of travel from home, to whichever of the campuses of the Institute the duties are being performed at.

I presume the place of work is defined by the IT as one of the two campuses, so some amount of tax free subsistence could be paid for additional travel between the two locations (or on the additional distance from home to the further of the two), but not on the travel that gets the OP from home to the place of work.

But ultimately I agree completely that the only way to resolve it is to get the position confirmed by Revenue (and please let us know the outcome!)

Fetac external examiners are treated as self-employed for both tax and contract purposes and can receive tax-free mileage & subsistence on top of their (quite modest) pay rates.

Revenue emailed back to say that they would refund the tax on the expenses if I submitted the payslips with my tax return.

Just to update this.

I sent the paperwork into the tax office.

They have emailed me back to say I have to pay tax on the expenses.