The Revenue Commissioners and the civil service permit an employee to earn travel expenses tax free in a system that incentivises people with larger engines by paying them more. In fact, those who cycle or use public transport lose out substantially.
Expenses rates for the first 1,500 km travelled are 8c per Km for a cyclist, or 37.95c for a car less than 1200cc, 39.86 cent for larger cars, rising to 44.79 cent for cars with engines larger than 1.5L. (more details here: Revenue Reimbursement Rates)
A standard rate independent of the size of the car or the mode of transport used would be much fairer. With our national fuel consumption problem, our traffic congestion and our need to pay a subventions to public transport operators a system incentivised towards active travel would be even better for the country.
On a recent trip to my manager asked me to take, I travelled by train and bicycle to Ravensdale, Co. Louth. Had I taken my wife’s 1.8l hybrid 7 seater, I could have received €89. I took the train instead, and was simply reimbursed for the €30 train ticket, despite having to cycle a 28km round trip (the connecting bus left 1 minute before train arrived) and having to wait around an extra 2 hours. Fuel for the trip would account for about €15. As my family own the car tax and Insurance and maintenance would need to be paid in any event.
To be fair to those who might currently rely on expenses as part of their income, any changes should be budget neutral to the country (I.e. the revenue and the public service should not be reducing direct costs from any changes) at first, but savings to the economy could later be made as more people move to active transport, as pa of something that could be negotiated with trade unions.
If necessary, a system which incentivised travelling by public transport could be supported by receipts to prove that public transport was taken. However, given that present mileage rates exceed the cost of travelling by bus or train, at least when over about 5 miles each way, receipts might not be necessary. Currently, the people claiming less by travelling by bus or train must provide receipts, while those earning more by driving, do not.
The travel expenses regime also encourages people from the same workplace to drive separately to meetings. Paying a set rate, independent of the type of car used would incentivise people travelling together in the same car. It would be an issue for those travelling to share the cost of of fuel etc.
The Government (in 2016) have allocated a value of €14.03 per hour on time spent commuting. (DPER project appraisal guidance here). If it takes longer to cycle or take public transport, then it is appropriate to include this cost. Take my trip to Ravensdale mentioned above: adding €28 for the extra 2 hours taken to the €30 train cost works out at €60. We can calculate travel expenses based on average public transport
Even trips within the local incentivise using the car, and car parking is frequently reimbursed, even where we have major congestion and traffic problems. Changing the rate and allowing people to walk, cycle or take the bus would have huge benefits.
Some professions, such as public health nursing, require employees to make multiple calls, and travel expenses are an integral part of ensuring that those in a less densely populated rural area are not out of pocket compared to their city colleagues. However, a new expenses regime could help move these people towards electric bicycles, even if these have not been provided by their employers.
A suggested rate of of 30c per Km for all would be a starting point. This would need negotiation with trade Unions, but a clear methodology on how this was achieved would mean that people could be encouraged to do the right thing and ditch the big engine, and we would all be better off.