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  • FIRST POST
    • madmaxp45
    • By madmaxp45 11th Oct 17, 5:02 PM
    • 6Posts
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    madmaxp45
    Taxed on Expenses?
    • #1
    • 11th Oct 17, 5:02 PM
    Taxed on Expenses? 11th Oct 17 at 5:02 PM
    Hi,

    I am having an issue with claiming back some tax.

    During the tax year 2015-2016 - I was working abroad for my previous employer. I was sent away for around 5 months in total during the year.

    Out of these 5 times at the end of the month when my salary was due the £400 expenses i was given to take abroad was also included in my salary which meant my salary on my payslip stated £2000 for each of the 5 months.

    Now i have tried to claim this back as i think i should not have been taxed on expenses. I have called up HMRC and they advised i need to get my previous employer to amend what was salary and what was expenses for the tax year 2015-2016.
    I emailed them and this is the response i got...

    as your query relates to a tax year which ended 18 months ago and before I joined the Company, I cannot comment on how your expenses were treated at that time

    given that you are no longer an employee, Iím afraid I canít make any amendments to your pay

    I can suggest is that you speak to HMRC. If they agree that you have paid excess tax then they can probably issue you with a new tax code to take this into account.

    Now HMRC are saying that they can amend it and should and if they dont seek help from CAB?

    Any ideas?

    Also my previous employer were not happy when i left and have been quite bitter as i could ascertain this in the email that was sent.
Page 1
    • 00ec25
    • By 00ec25 11th Oct 17, 5:23 PM
    • 5,577 Posts
    • 4,979 Thanks
    00ec25
    • #2
    • 11th Oct 17, 5:23 PM
    • #2
    • 11th Oct 17, 5:23 PM
    if you were given a round sum allowance of £400 then that was quite correctly treated as additional taxable income since that is what it was, extra money in your pay packet

    what did you actually spend, can you prove it, and were you paid again for those expenses - those are the real questions you need to answer. At the moment you have £400 of extra income and no accounting for legitimate business expenses which offset that income.

    what did your ex employer require you to do to show how you spent the money?

    if you have receipts to the value of £400 or more then you can claim those expenses against your income and so "recover" the tax you have been charged on the round sum allowance. Your ex employer really should have made that clear to you at the time, if the £400 was treated as an "advance" against expenses then you must have had to account for how you spent that and your ex employer should then have reversed the advance in a subsequent payrun on the basis you then had submitted receipts to the value of the advance (or if not then either you refunded unspent money to the ex employer or the ex employer reimbursed you for expenses over the £400 they had already given you)

    you cannot have £4000 through pay and think it is tax free/refundable if you did not spend it on actual business expenses
    Last edited by 00ec25; 11-10-2017 at 5:32 PM.
    • Nearlyold
    • By Nearlyold 11th Oct 17, 5:26 PM
    • 985 Posts
    • 817 Thanks
    Nearlyold
    • #3
    • 11th Oct 17, 5:26 PM
    • #3
    • 11th Oct 17, 5:26 PM
    Was the £400 meant as additional salary to offset any extra inconvenience/incidental costs in working abroad? Or was it reimbursement for expenses you paid out such as travel hotel accommodation food etc. for which you had to provide receipts to your employer?
    Last edited by Nearlyold; 11-10-2017 at 5:29 PM.
    • madmaxp45
    • By madmaxp45 11th Oct 17, 5:29 PM
    • 6 Posts
    • 0 Thanks
    madmaxp45
    • #4
    • 11th Oct 17, 5:29 PM
    • #4
    • 11th Oct 17, 5:29 PM
    the sum of £400 was given to us, and all accounted for in receipts (employer kept records) and we were asked to submit a spreadsheet with a breakdown of our expenses. if we spent under the £400 it was deducted from our paycheck in the next month. if we spent over the £400 it was added onto our next paycheck.
    • madmaxp45
    • By madmaxp45 11th Oct 17, 5:30 PM
    • 6 Posts
    • 0 Thanks
    madmaxp45
    • #5
    • 11th Oct 17, 5:30 PM
    • #5
    • 11th Oct 17, 5:30 PM
    £400 covered costs such as food, travel,fuel,hotel costs (when hotel had not been paid in advance)
    • madmaxp45
    • By madmaxp45 11th Oct 17, 5:33 PM
    • 6 Posts
    • 0 Thanks
    madmaxp45
    • #6
    • 11th Oct 17, 5:33 PM
    • #6
    • 11th Oct 17, 5:33 PM
    i guess they treated it like a reimbursement as i did not pay with my own money but it was company money. if i was under £400 budget i gave them back any money left over.
    • 00ec25
    • By 00ec25 11th Oct 17, 5:33 PM
    • 5,577 Posts
    • 4,979 Thanks
    00ec25
    • #7
    • 11th Oct 17, 5:33 PM
    • #7
    • 11th Oct 17, 5:33 PM
    the sum of £400 was given to us, and all accounted for in receipts (employer kept records) and we were asked to submit a spreadsheet with a breakdown of our expenses. if we spent under the £400 it was deducted from our paycheck in the next month. if we spent over the £400 it was added onto our next paycheck.
    Originally posted by madmaxp45
    then your payslip should have shown a "reversal" up to the value of the £400 originally given to reflect the value of the expenses you submitted

    if it did then you have no claim to a tax refund now as you would have got it as part of the subsequent payrun
    Last edited by 00ec25; 11-10-2017 at 5:36 PM.
    • madmaxp45
    • By madmaxp45 11th Oct 17, 5:37 PM
    • 6 Posts
    • 0 Thanks
    madmaxp45
    • #8
    • 11th Oct 17, 5:37 PM
    • #8
    • 11th Oct 17, 5:37 PM
    no it was an entire lump sum £2000 which made it look like for the tax man to see that i earned £2000 as salary when in fact £400 was gone on expenses and submitted with receipts
    • 00ec25
    • By 00ec25 11th Oct 17, 6:45 PM
    • 5,577 Posts
    • 4,979 Thanks
    00ec25
    • #9
    • 11th Oct 17, 6:45 PM
    • #9
    • 11th Oct 17, 6:45 PM
    no it was an entire lump sum £2000 which made it look like for the tax man to see that i earned £2000 as salary when in fact £400 was gone on expenses and submitted with receipts
    Originally posted by madmaxp45
    then without those receipts you have no evidence to support your claim that you spent £400 on legitimate business expenses whose payment "in advance" has been taxed via payroll and this potentially due a tax refund of £80 (if you were a basic rate taxpayer)

    This may be the MSE site, but there comes a time when you should question: is it worth the hassle for only a few £???
    • madmaxp45
    • By madmaxp45 11th Oct 17, 6:48 PM
    • 6 Posts
    • 0 Thanks
    madmaxp45
    thats what i thought thing is its £400 on 5 different occasions. so we are talking £400 tax refund.
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