Home > General > Calls for an "anomaly" in Irish taxation to be dealt with in Budget

Calls for an "anomaly" in Irish taxation to be dealt with in Budget

Written by Robert McHugh, on 14th Aug 2018. Posted in General

article headline

Specialist contractors, Contracting PLUS, are calling for an anomaly in Irish taxation to be dealt with in the forthcoming Budget which they say currently makes it more advantageous for Ireland’s top engineering, project management and technology professionals to work abroad.
 
According to Jimmy Sheehan, Commercial Director at Contracting PLUS, travel and subsistence expenses for independent professionals (iPros) are not allowed for tax purposes, while an employee doing the same job is able to reclaim these costs tax free. 
 
iPros are often engaged by Ireland’s major multinationals. These iPros are often based beyond what would be deemed a normal commutable distance. When travel costs incurred on a major contract over the course of a 6 or 12 month project are added up, Contracting PLUS say not being allowed mileage and subsistence adds-up to a major disincentive to provide these services.
 
Contracting PLUS believe longer term consequences of the Revenue anomaly could mean an increase in the cost of investing in Ireland, increased cost in completing capital projects here, and damage to Ireland's associated international reputation, meaning Ireland becomes less competitive in attracting FDI in an ever more competitive global marketplace.

An employee is not allowed to claim travel expenses to and from work, and it is this basis that currently prohibits an iPro from claiming any mileage to his or her place of work. The average commute to and from work in Ireland is 15km, a 30km round trip. 

However, if an employee travels to a client premises, say 50km away, they can claim mileage of 35km; 50km less the distance to their ‘normal’ work place.  iPros cannot claim any mileage or subsistence, regardless of where they travel across the country and how long they stay away from home.
 
Speaking last week, Commercial Director atContracting PLUS, Jimmy Sheehan said, "They are being disadvantaged in relation to all other categories of worker.  An employee receives these expenses tax-free, public servants and public representatives receive these expenses tax-free. But bono fide expenses incurred by iPros in relation to travel and subsistence which are wholly and necessary for business purposes, are being disallowed."
 
He added, "A lot of Ireland’s foreign direct investment is attracted on the basis of our skilled, educated, English-speaking workforce, available to support the set-up of incoming multi-nationals with specialist skills. Therefore, professional contractors unwilling to take on roles in projects where they incur travel expenses will have larger consequences for Ireland Inc." 
 
The iPro solution the sector wants Minister Donohoe to put forward on October 9th next is based on the successful model used in the USA, Canada, Germany and the U.K., where there is the concept of the “Tax Home”.

This notion of a location where normal living expenses are incurred and, often, where your family is located allows specific well defined expenses to then be allowed on an actual cost basis, once the individual is required to be absent from this “Tax Home” for work purposes.

The professional contractors say they are hopeful of a fair hearing this Budget Day, as, with Ireland’s economic recovery, emphasis in recent years has been on giving more workers, especially the self-employed who support economic expansion - a fairer deal. 
 
Source: www.businessworld.ie

More articles from General

image Description

Choosing the Right Time and Attendance System for Your Business in Ireland

Read more
image Description

The Benefits of Choosing a Payroll Bureau in Ireland with Online Payroll Software

Read more
image Description

Tips for Building a Successful Travel Business in Ireland

Read more
image Description

How to Improve Your Business Writing: Simple Tips That Work

Read more
image Description

Leveraging Digital Platform Integration is the Key to Driving Competition Among Businesses

Read more