Dáil Éireann Debate, Tuesday - 26 May 2026
484. Deputy Emer Currie asked the Tánaiste and Minister for Finance to consider making M50 toll payments tax deductible for commuters who rely on the motorway for their daily commute; and if he will make a statement on the matter. [40206/26]
View answerWhile I appreciate that some people use cars to travel to their principal place of employment, ultimately it is a matter for individuals to choose the transport option that works best for them, taking into account certain tax incentives which are available. For example, in order to encourage the uptake of more sustainable and environmentally friendly transport options, persons commuting to work can already avail of the Taxsaver scheme in respect of public transport; and the cycle to work scheme.
Section 118(5A) of the Taxes Consolidation Act 1997 (TCA) provides an exemption from benefit-in-kind (BIK) where an employer purchases a travel pass for an employee. This is commonly known as the Taxsaver scheme. Under section 118B TCA, an employer and employee may also enter into a Revenue-approved salary sacrifice arrangement under which the employee agrees to sacrifice part of his or her salary, in exchange for the benefit.
It is important to note that employers are not required to take part in the Taxsaver scheme. Where an individual's employer does not participate, any benefits that could arise under the scheme will not be available to any employees of that employer.
If an employer does participate in the scheme, they will also save money as employer’s PRSI is not payable on the cost of the relevant benefit(s) when they make the associated deduction from their employees' salary payments.
Furthermore, employees may also claim a tax deduction in respect of:
(a) the cost of travelling expenses necessarily incurred in the performance of the duties of their employment or office; and
(b) the cost of other expenses incurred wholly, exclusively and necessarily in the performance of the duties of their employment.
However, these deductions do not ordinarily include the cost of travelling to and from a principal place of work. It is a long-established principle of tax case law that the expenses incurred in travelling from home to work and work to home are expenses which are not necessarily incurred in the performance of the duties of an office or employment. The reimbursement to an office holder or employee of such expenses is therefore taxable and subject to PAYE deductions.
Finally, in line with best practice, and as with all proposals for the introduction of new tax measures or the amendment of existing tax reliefs, the proposal should be assessed in accordance with the Department of Finance Tax Expenditure Guidelines. The guidelines make clear the importance that any policy proposal which involves tax expenditures should only occur in limited circumstances where there are demonstrable market failures and where a tax-based incentive is more efficient than a direct expenditure intervention.
As the Deputy will appreciate, decisions regarding taxation measures are made in the context of the annual Budget and Finance Bill processes, at the appropriate time, and having regard to the sound management of the public finances.
