HMRC don't know, per diem dodgy dealings?

futurecut

Hi,

I searched but couldn't find anything on this that makes sense; maybe someone can help?

My understanding of a per diem allowance was that it's a way for a company to give you an allowance for subsistence while on company business upon which you claim tax relief. Or something like that.

But this is what my 'company' are doing:

For every 5/10 hour period spent away from the office they pay an allowance of £5/£10 respectively. I have to fill in time-sheets expressly for this purpose.

Then on my wage slip they make 'an adjustment' proportional to the number of per diem allowance hours totalled. The thing is that the adjustment is negative so leads to a deduction. I never see this allowance, i just see a deduction, so the more i work, the more they deduct.

It seems to me they are using a mechanism designed to benefit the employee but are benefiting at our expense?

I called HMRC. I thought to do this they must have a pre-arrangement but the guy i spoke to had never heard of this. I hope it's not dodgy but i've no idea!

What's going on here? Pls help!

Rolb

Mikeyorks

'Per Diem' isn't a phrase you'll find in UK use (it simply means 'per day') .. it's more an import from the US despite it's Latin origins? So I'm not surprised HMRC were little help. More generally referred to as a 'subsistence allowance' ......... in particular the 5/10 hour bands you quote.

Bit unclear from your post just what you are getting? Is the £5 / £10 paid outside salary ........ then a deduction made for tax within salary?

Whatever ....... you'll find the £5 / £10 is the benchmark figure set out by HMRC for tax free allowances for subsistence purposes :-

http://www.hmrc.gov.uk/briefs/income-tax/brief2409.htm

........... but I think you'll need to firm up on your understanding of just what the payslip is showing before you challenge it? A quick word with your payroll people? It may simply be (as some pension contributions) the negative on the payslip is simply ensuring the subsistence allowance isn't taxed.