can I reduce my exposure to income tax on sales bonus/commission s

patri

Hi.
I currently work in a sales role and get paid a basic plus commissions

My employer in my job has asked if I want to be paid the commission element as a mileage claim

Are there any other benefits in doing this or anything I should be wary of.
Or any alternatives ?

zygurat789

the first 10,000 miles of BUSINESS mileage may be compensated at 45p per mile, thereafter at 25p per mile if you are using your own personal car and paying for ALL petrol and other expenses. These amounts are tax free.
This arrangement would be fraudulent

patri

Thanks for the advice.
I think my boss wants to reduce amount of NI he pays which is why he is pushing me towards this.

zygurat789

patri wrote: »

Thanks for the advice.
I think my boss wants to reduce amount of NI he pays which is why he is pushing me towards this.

He pays 13.8% on the commission but he has received a refund of £2,000 this year against his employers NI contributions.

TheCyclingProgrammer

patri wrote: »

Thanks for the advice.
I think my boss wants to reduce amount of NI he pays which is why he is pushing me towards this.

Think about this. He's asking you to fraudulently claim mileage when you haven't done any. Not only is he evading employers NI but you are potentially evading tax too. Don't touch the arrangement with a bargepole.

I don't know how much commission you're due but for every £1000 of commission you're due, you'd have to claim 2222 miles, up to the first 10000, then almost double that afterwards. You'd have to claim 12000 miles to get £5k of commission tax free. Its quite easy to prove you haven't done that kind of mileage!

Funkyfreddy

patri wrote: »

Hi.
I currently work in a sales role and get paid a basic plus commissions

My employer in my job has asked if I want to be paid the commission element as a mileage claim

Are there any other benefits in doing this or anything I should be wary of.
Or any alternatives ?

..and would you be able to provide HMRC with documentary evidence of any of this mileage should they request - Petrol Receipts, Mileage on MOT/Service documents etc ?

FF

patri

Thanks for the advice. Think its best to stay legit. And declare in full.

purdyoaten

patri wrote: »

Thanks for the advice. Think its best to stay legit. And declare in full.

Yes - and then claim the mileage also or, if your employer refuses to pay, claim the tax relief on the mileage at the rates previously advised. In a sales position that surely is worth it?