Tax on reimbursement

bitemarx

Hi
My employer reimbursed me for my relocation expenses. However, it looks like they have added the reimbursement amount to my total pay and taxed me on that amount rather than for my salary alone.
Can they do this?
Shouldn't they be taxing me on my salary (plus any supplements) alone?
Is it legally required that I pay tax on money that I have spent previously and is owed to me now??

Annother question that popped up in my head was....if I had requested the reimbursement to be made via cheque, would they still tax me on it?

Sorry about putting so many questions into one post but I was really upset this morning when I checked my bank account and realised that this seems to be the case!
Any help/guidance/opinions would be really appreciated!

Thank you, in advance.
M
:mad:



P.S. I haven't seen my payslip yet so Im not sure exactly what deductions have been made from my basic pay.

alwaysonthego_2

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Vader123

Up to about 11.5K the reimbursement should be tax free if they come under this list :

http://charterconsultation.hmrc.gov.uk/guidance/relocation.htm#e


Vader

pelirocco

They might have made a mistake , its probably best to check the facts first

PlutoinCapricorn

Reimbursement is not tax liable but remuneration is.

If you are out of pocket as a result of your work, then you should be reimbursed. This is normally done on production on receipts and completion of an expenses form for the accountants. You are normally paid separately from your salary, often in cash or via cheque. There is no tax because you have not earned anything, it is just to stop you losing anything.

Relocation is tricky however. If you are given an allowance it might be taxable. What were the actual terms: did you show them any receipts?

bitemarx

PlutoinCapricorn wrote: »

Reimbursement is not tax liable but remuneration is.

If you are out of pocket as a result of your work, then you should be reimbursed. This is normally done on production on receipts and completion of an expenses form for the accountants. You are normally paid separately from your salary, often in cash or via cheque. There is no tax because you have not earned anything, it is just to stop you losing anything.

Relocation is tricky however. If you are given an allowance it might be taxable. What were the actual terms: did you show them any receipts?

I submitted receipts, yes.
Im confused as to whether this comes under 'reimbursement' or 'remuneration'...my relocation claim is based on the fact that I ..uhm..relocated in order to work with my current employer. I have claimed back the expenses related to moving my belongings, furniture using a removals company.

DCodd

It could just be a simple mistake at the payroll dept, they may have paid you via payroll but did not set the payment up to be calculated post tax.

PlutoinCapricorn

I do remember a time when charity volunteers were given a cash allowance for lunches and travel, but this was changed as HMRC tightened up and the charity did not want to be suspected of paying below the minimum wage, and did not want the volunteers to be potentially liable for tax. So now it is receipts only.

A removal must have cost you considerably more than £5 for a sandwich and a drink!

I have a horrible feeling that as the move was in advance of the new job, the money is an allowance. But it is best to collect information and ask the company yourself, as there must be many other people who have been in this situation.

fengirl_2

Sorry, but PLuto is waffling. You need to look at the link in Vader's post, which is the correct response. If your removal expenses come within this, then you need to refer back to payroll who will clearly have made an error.