Public Sector Tax event: responses from Revenue

Nov 20, 2017

Revenue has provided us with written responses to questions raised by attendees at the public sector tax event held by Chartered Accountants Ireland.  The responses cover the tax treatment of travel and subsistence payments, scenarios where ‘exceptional circumstances’ apply to allow overnight tax free payments, PSWT on bank fees and benefit in kind treatment of salary overpayments and commercial jeeps. 

The questions and responses we received from Revenue are reproduced below verbatim for your information.

Q. How should public sector bodies tax travel and subsistence payments to ‘office holders’ on certain boards?

Revenue Response:

A business journey is one which an employee travels from one place of work to another place of work in the performance of the duties of his or her employment but will generally involve a temporary absence from the normal place of work.  Journeys between an employee’s home and place of work (and vice versa) are not business journeys and any reimbursement of subsistence expenses relating to such journeys is taxable.

A retired individual that is employed for a specific board/committee will not have a pre-existing normal place of work.  In such circumstances, the normal place of work would be where the board/committee meets or carries out the interviews.  Accordingly, the expenses of travel attributable to the journey undertaken in attending the board/committee meetings cannot be made tax free.  The rationale for this is that the journey is not in relation to a temporary absence from their normal place of work.  In addition, payments in relation to subsistence should not be made tax free, for the same reasons.

Where the board/committee member is not retired, the normal place of work of the board/committee would still be determined having regard only for the work of the relevant board/committee and without regard for the board/committee member’s other occupation.  Accordingly, the expenses of travel attributable to the journey undertaken in attending the board/committee would be taxable in these circumstances also.

Q. Can you clarify where ‘exceptional circumstances’ could apply to allow an overnight payment where someone is over 50km from their place of work not being taxable?

Revenue Response:

An overnight payment may be allowed without deduction of tax when the employee is between 50 and 100 km from their place of work or home in exceptional circumstances only.

‘Exceptional circumstances’ includes:

  • extreme weather conditions which would raise health and safety concerns,
  • ·operational needs arise such as a situation where the meeting that the officer is attending does not finish until 8pm and they could not be expected to return home, and
  • situations where an officer is spending more than one day away at a location between 50 and 100 km from their place of work or home but it would cost less or significantly reduce the loss of official time if the officer does not return to their place of work or home.


The employer must also be satisfied there was an operational need for the employee to travel to the location. See the appendix to Revenue’s manual on the Tax treatment of the reimbursement of Expenses of Travel and Subsistence to Office Holders and Employees (link here) for further detail on the Civil Service rates for travel and subsistence.

Q. Are all bank fees subject to PSWT?

Revenue Response:

All fees, commissions and charges in respect of banking transactions are ’relevant payments’ for the purposes of the withholding tax scheme.  Thus, PSWT should be deducted from any payment made by an accountable person for banking transactions irrespective of how the charge is levied with one exception.  That exception being, the charge imposed by a bank for the ordinary servicing of a customer’s account, which is debited directly to the customer’s account. This charge is not regarded as a ‘relevant payment’ and as such would not be subject to withholding tax. 

The issue of PSWT being deducted from payments to Elavon and Realex was examined in 2011.   Based on the information provided it was determined that the payments to Elavon, a merchant acquirer, were subject to PSWT while payments to Realex, a payment gateway, would be outside the scope of PSWT.

Q. BIK on overpayments.  If an employee was overpaid and that overpayment; (1.) wasn’t recouped on hardship grounds or (2.) recouped on a long – say 2-year – payment deduction arrangement, would Revenue take a view that there’s an interest free loan and it’s BIKable, or it’s BIKable as it wasn’t recouped?

Revenue Response:

  • Where the amount is not recouped, the employer has incurred an expense in providing an additional benefit to an employee (being the overpaid salary).  As such, the BIK provisions would apply to the amount not recouped.
  • Where the amount is recouped over 2 years, this could be considered an interest free loan for BIK purposes.

Q. BIK on commercial jeeps – can the BIK provisions on vans be applied in that situation (instead of the BIK on cars)?

Revenue Response:

The BIK provisions for vans can only be applied to vehicles which:

  • are designed or constructed solely or mainly for the carriage of goods or other burden,
  • have a roofed area or areas to the rear of the driver’s seat,
  • have no side windows or seating fitted in that roofed area or areas, and
  • have a gross vehicle weight not exceeding 3,500 kilograms.


Commercial jeeps do not generally meet these criteria.  As such the BIK provisions for vans are unlikely to apply to these vehicles, but they may apply to certain commercial jeeps where the above criteria are met.

Q. General query regarding contractors and travel and subsistence from home and home offices, etc.

Revenue Response:

See tax briefings 3 (link here) and 4 (link here) of 2013 for further detail of Revenue’s position in respect of travel and subsistence expenditure from home and home offices for contractors. If you have a more specific query in respect of travel and subsistence from home and home offices, please submit a query to Revenue’s Technical Service (RTS) via MyEnquiries in myAccount or ROS.