Muddle over use of truck and car use.

oldwiring

This is a serious thread; not a troll

A relative has full use of a double cab high spec truck with the employer paying for all fuel used, business and personal. For a short period a year or so back, when the truck was totalled whilst avoiding a Mway pile-up, a land rover was used under similar term to the truck.

Due to mistakes by the employer, maybe aided by HMRC systems a little, the relative's tax been over deducted by over £2K.

The employer has admitted its errors, but is reluctant to make the refund through tax channels, (probably to avoid questions, an audit and penalties). Instead, it has suggested paying the grossed up money value of the tax wrongly suffered.

Superficially that would seem to solve the problem, at least from the relative's POV, provided it had no adverse effect on other family benefits, his income fluctuating in and out of the 40% band.

Yet, somehow, I feel uneasy about the suggestion and told him so.
Could accepting the offer come back and bite him? Could HMRC or other interested parties (e.g. employer's creditors) hold him complicit in the irregular solution? ISTM that would likely be a disaster for him and family were that complicity successfully laid on him.

Knowledgeable opinions and advice, please!:)

CLAPTON

not really enough information about the truck and car and what the 2k tax was for

if he has access to a vehicle for personal use then tax is payable; is this the 2k ?



otherwise, if the employer is going to increase his salary by a certain amount in a one off bonus which will be taxed and NIed in the normal way then that would seem ok.
no idea about his benefits


however, if he has access to the truck and car for personal use then he should be taxed as appropriate

oldwiring

As I said hw usually had access to the truck, but whilst a new one was being sourced used the Land Rover ( that was about 4 months, all of which was properly dealt with, as far as I know. The problem has arisen since, when, he having only the truck, the employer has treated him wrongly as having use of both. The tax over deductions relate purely to that... a land rover where his use has ceased some time ago.

The details I gave are probably less important than the legailty/advisability of the employer's suggested way of settlement, and his being party to the same.

chrismac1

In principle I see no difference to this and "box standard" expat. deals at multinationals. What happens there is that part of the contract is to equalise tax to the rate of your home country. A former employer used to have lots of US nationals over here for up to 3 years. They had extra tax to pay because UK tax is higher, they were given this grossed up as a pay uplift in addition to the uplift for coming to work in a country like the UK, missing out on Martin Luther King day, massive meals and so forth.