Revenue Tax Briefing

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Revenue Tax Briefing Issue 63, May 2006

Employees’ Travel Expenses

Reimbursement of expenses of travel to employees who are required to attend an emergency at their normal place of work outside of their normal working hours

General Principle

It is an established principle under tax law that, where an employer pays or reimburses the travel expenses for an employee to attend for duty at his/her normal place of work, the amount paid or reimbursed is to be treated as part of the employee’s remuneration and taxed accordingly. Journeys undertaken to return to work in emergency or ‘on call’ situations do not alter this principle.

Exception to general principle

There is, however, one exception to the general principle. Tax case law has found that a person with ‘specialist’ skills may be working from the time he/she receives notification to attend his/her normal place of work to deal with an emergency. The type of case to which the exception applies is one where a ‘specialist’, because of the grave consequences of the relevant situation, must give instruction or direction to those present at the relevant situation and also have a responsibility for the emergency whilst travelling to the normal place of work. It is not envisaged that many such cases arise in practice. The reimbursement by the employer of the expenses of travelling to and from the normal place of work in such cases may be made without deduction of tax.

Practice with effect from 1 January 2006

With effect from 1 January 2006, except for those to whom the previous paragraph may apply, where an employee is required to attend his/her normal place of work outside his/her normal working hours to deal with emergencies requiring his/her immediate attention, then the expenses of travelling (i.e. the cost of the provision of taxis or mileage expenses up to the appropriate civil service mileage rate) to and from his/her normal place of work may be paid without deduction of tax in respect of a maximum of 60 such emergencies per annum.

Emergency in this context is dependent on the nature of the industry but, in general, encompasses an unforeseen or sudden event:

  • That requires immediate or urgent attention; and
  • That would have serious consequences if left unattended until the individual commences her/his normal working hours.

An emergency does not include an event where staff are required to attend their normal place of work outside their normal working hours to, for example:

  • Replace a scheduled member of staff who fails to attend work, or
  • Assist with an increased volume of work; or
  • Attend for a non-emergency or other such routine event.

Whether a ‘call out’ is in respect of a genuine emergency is a question of fact having regard for relevant facts and circumstances supported by the records kept relating to the event.

Whilst it would be expected to be rare, if it is the case that, in a particular situation, the number of emergency ‘call outs’ is in excess of 60 per annum, the employer should contact the local Revenue office for guidance.