Is Excess Travel Taxable?

loola511

I work for a government organisation and my department recently went through a restructure. A lot of people were made reduntant, but I managed to keep my job as long as I moved to another office 40 miles from the old office. I started the job on 1st Novemeber having been told I would receive a refund of my travel costs. I travel by train and have to buy my tickets out of my own money (even though they do have the facilities to buy then for me, but this is the policy), then put a claim in for the reimbursement. I have just been paid my first lot of reimbursements (9 day returns at £12) only to find out I've paid tax and NI on this reimbursement. A colleague in the same situation phoned up about it and was told it was policy. Surely this can't be right as I've already been taxed on this out of my salary, and it then leaves me out of pocket? In this months case £37 out of pocket, but will be a lot more next month when then reimburse my claim for a £223.50 monthly ticket.

jfdi

Yes. (making message longer.)

chrismac1

Yes it's taxable as it does not seem to be part of a relocation package, for example where you move house. However, a less stingy employer would offer to pay the extra tax and NI for you so you were no worse off than before. This was the policy of my old employer and could amount to quite a bit if you were a US domicile person working in the UK for say 3 years, the company picked up the tab for any extra UK taxes arising.

FOREVER21

Just a thought could you talk to your line manager and see if he/she would let you claim your excess on a T and S claim form in our Department these are paid this way , and then paid by giro ---no tax or ni:)

TM1976

Yes it's taxable. Unless your employer paid your travelling costs to your previous place of work then you should be better off as they now meet the cost of your daily commute.

mjm3346

FOREVER21 wrote: »

Just a thought could you talk to your line manager and see if he/she would let you claim your excess on a T and S claim form in our Department these are paid this way , and then paid by giro ---no tax or ni:)

You are required to inform HMRC if it is not paid through payroll. Could be considered gross misconduct by claimant and line manager if it came to light.

mjm3346

TM1976 wrote: »

Yes it's taxable. Unless your employer paid your travelling costs to your previous place of work then you should be better off as they now meet the cost of your daily commute.

No, they only meet the excess cost over travel to the old place of work so you are always out of pocket by the amount of the deductions.

TM1976

mjm3346 wrote: »

No, they only meet the excess cost over travel to the old place of work so you are always out of pocket by the amount of the deductions.

Not what is says in the detail of the post - the employer has refunded the whole of the train fare. Furthermore the OP is claiming for a season ticket next month, which can be used for private or business travel.

I can see the commute is inconvenient but I think this is actually quite a good deal as far as what the employer pays for. None of this answers the question though - it's definately a taxable benefit, unless the posting to the othe office is only on a temporary basis.

jimmo

FOREVER21 wrote: »

Just a thought could you talk to your line manager and see if he/she would let you claim your excess on a T and S claim form in our Department these are paid this way , and then paid by giro ---no tax or ni:)

Are you sure you are talking about the same thing?
The way I read this is that the OP has had a change of his permanent place of employment and so, with effect from the date of transfer, his journey from home to the new place of employment is normal commuting and there is no tax relief available for that.
Going back a few years the whole of the Civil Service had a single travelling and subsistence system and Excess Fares Allowances were payable for 3 years following the transfer. After that the transferee was on his own.
However the payments were (are) taxable.
More or less at the same time that Departments, Agencies and other Government bodies were given the autonomy to bring in their own travelling and subsistence schemes the then Inland Revenue started subjecting Government bodies to PAYE audit in the same way that all other employers are.
If you are, even with your manager's approval, claiming Excess Fares Allowance on a standard T & S form there is a very real chance that this will be picked up on a PAYE audit. If that happens your employing department will face a bill for the tax which it has failed to deduct, interest and penalties.
Whilst it may be nothing to do directly with HMRC there is a very real danger that your employer department, having been forced to stump up by HMRC will look at your own and your line manager's behaviour under Conduct and Discipline.
I would bet that whilst your line manager may countersign your fraudulent T & S claims you have nothing in writing from him or her which would get you off the hook if the doo-dah hits the fan.

mjm3346

TM1976 wrote: »

Not what is says in the detail of the post - the employer has refunded the whole of the train fare. Furthermore the OP is claiming for a season ticket next month, which can be used for private or business travel.

I can see the commute is inconvenient but I think this is actually quite a good deal as far as what the employer pays for. None of this answers the question though - it's definately a taxable benefit, unless the posting to the othe office is only on a temporary basis.

The "rules" only permit payment of the fares to the new location less the fares (if any) to the original location. I assume he did not need to get a train to the old location so gets it in full to the new one otherwise he has another surprise coming at some point.

TM1976

mjm3346 wrote: »

The "rules" only permit payment of the fares to the new location less the fares (if any) to the original location.

OK, but the OP hasn't posted their employee handbook on here so I can only comment on the post - which gives the impression that the employer has met the full cost of the train fare.