Revenue Note for Guidance

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Revenue Note for Guidance

CHAPTER 3

Expenses, allowances and provisions relating to the general benefits in kind charge

Overview

This Chapter provides a scheme of taxation for payments of expenses and benefits in kind provided to directors and employees. The broad effect of the Chapter is to treat as taxable remuneration the amount of the expense payments made or the value of the benefit received. The Chapter does not affect the deduction of genuine business expenses of employees under section 114. The Chapter applies to directors and employees of companies and other bodies engaged in trade or in holding investments or other property and also to employees of partnerships and sole traders. It also applies to the spouses, family, dependants, servants and guests of such directors and employees.

116 Interpretation (Chapter 3)

Summary

This section gives the meaning of certain terms and sets out the rules for the construction of certain references used in the Chapter.

Details

(1) “business premises”, “control”, “director” and “employment” are self-explanatory defined terms.

“employee” includes the holder of an office.

“premises” includes land.

(2) Anything provided by an employer for the spouse, civil partner, family, servants, dependants or guests of a director or employee is treated as a benefit provided for the director or employee.

(3)(a) While company directors are within the scope of the Chapter without qualification as to the amount of income derived from their office, an employee is within the Chapter’s scope only where for the year of assessment his/her remuneration from the employment, including expenses payments and benefits in kind, but before any deduction of allowable expenses, is in excess of €1,905.

(3)(b) Where a person has 2 or more employments under the same employer, emoluments are aggregated for the purposes of the €1,905 limit.

(4) Where there is a group of 2 or more bodies corporate one of which controls the rest, then, all directorships and employments within the group are treated as if they were held under the controlling body corporate.

Relevant Date: Finance Act 2021