Relocation Allowance Paid From Gross Salary

bring_2

Hi,

I recently received my relocation allowance of £4166. This was added onto my month 1 gross salary and I was therefore taxed using my tax code (547L to cover medical) through PAYE. My salary is £50,000.

I would assume that by paying me the relocation bulk in my pay packet on top of my normal gross salary I would have paid 40% tax on the full amount of the relocation, therefore have covered any tax I owe to HMRC?

From a P11D point of view should it be detailed at all or should it be detailed with an explanation that tax was paid at 40% via PAYE through my tax code?

I'm assuming my tax code will not be reduced at all as a result?

I also received some other payments for relocation through the 3rd party my employer used to manage things. This covered the removal and travel expenses however I believe these costs are non taxable as they are excluded. I would therefore assume these shouldnt be on the P11D at all.

Is this correct?

Thanks in advance

Mikeyorks

bring wrote: »

Is this correct?

Depends on the criteria used for the £4166. The first £8k is tax free provided a number of conditions are met. If it's been paid and taxed - it would appear the conditions aren't met :

http://www.hmrc.gov.uk/guidance/relocation.htm

bring_2

Hi,

Thanks for the reply. My deal was that I would be paid 1 month's gross salary plus a relocation company would pay me seperately for removal and costs to/from the new location (ie hotels and restaurants).

Should they have processed the bulk payment through PAYE at my top tax band? I'm told it was the correct method because the bulk was not specific to the tax exemptions detailed by HMRC, it was just a lump payment for relocation. As a result it would be taxable at my higher tax band level.

Sound right to you?

Mikeyorks

bring wrote: »

Sound right to you?

Yes - exactly right if the £4166 doesn't fit into the (£8k) exemption.