Finian McGrath (Dublin North Central, Independent)
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Question 543: To ask the Minister for Finance the tax relief and travel expenses situation for a person (details supplied) in Dublin 9. [1583/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am advised by the Revenue Commissioners that the taxpayer in question is in receipt of round sum travel expenses from her employer based on logged expenses over a three month period. The law provides that a deduction can be claimed for travel expenses only if they are incurred wholly, exclusively and necessarily in performing the duties of the employment. Payments by an employer which are no more than a reimbursement of allowable expenses actually incurred by an employee in performing the duties of the employment may be paid tax free. This can be done by the employer paying an allowance which does not exceed the equivalent Civil Service allowance as set out in Revenue Leaflet IT51. (This leaflet can be viewed on Revenue's website at www.revenue.ie/leaflet/it51.htm.) However, in the case in question the round sum allowance paid by the employer is not in accordance with Leaflet IT51 and is therefore taxable. The employer has been instructed by Revenue that PAYE/PRSI deductions must be made from these round sum expenses with effect from 1 January 2007. This does not preclude the taxpayer from subsequently claiming a tax deduction in respect of vouched expenses wholly, exclusively and necessarily incurred in the duties of her employment.