Reclaiming Business Expenses - P87?

patonar

I recently relocated offices to work some 50 miles away from my previous office, and my employer pays a flat £500 per month relocation charge, to cover additional expenses in getting to work. This is taxed at the usual rates (i think mostly 20% but it pushes me into the 40% bracket so a portion of this is at 40%), and i also have my student loan taken out of it @ 9%.

I was chatting to someone at work today who reclaims the tax on this through his self assessment at the end of the year. Which i personally dont do (self assessment that is)... however a trawl of the internet seems to suggest that there are allowable expenses that the tax can be reclaimed upon.... And it would appear all i have to do is complete a P87 form .I am guessing Section 5 is what i need, as its just a lump sum for discretionary expenses related to the relocation.

Is it really that simple? Does anyone else have experience doing this?

00ec25

is this move intended to be a permanent relocation or is it only "temporary"?

it seems the £500 is to cover the additional travelling costs of getting to the new location rather than cover the costs of you relocating , ie moving. As such, its taxable status depends on the above

given your colleague is doing SELF assessment why do you think he is correct and that it is non taxable? It could just as easily be a flat rate contribution towards your (new) commuting costs and would potentially be taxable, which is why your company is.. err... taxing you on it

nomunnofun

Your employer has decided to pay you a 'flat £500 per month as you say without reference to the actual expenditure. This is a round sum allowance and is liable to both tax and National Insurance.

Furthermore, even if the amount paid was not round sum and reflected the actual expenditure incurred by you, travel from home to work is not classed as business expenditure and no claim would be appropriate.

Your employer has recognised the additional costs and, in effect, given you the equivalent of a pay rise of £6000 per annum and has taxed it appropriately. Sounds fair enough to me.