Tax credits and work expenses we're worse off

densol_2

Fizzylizzy wrote: »

Hi yes part of the expenses are redeployment commuter mileage but the whole lot is defo being applied pre deduction and taxed. Does he need to separate these if so how do we prove this as its all claimed and paid together on his pay at same rate ?

Yes they should definitely be separated. The redeployment taxable expenses are generally paid PAYE and the non taxable genuine expenses are usually paid by a direct payment after submission of a mileage claim. He needs to speak with employer to seperate the two - as like you say the wages are being artificially inflated. Plus then he can claim the additional 20p tax relief on the business miles from HMRC and that will further reduce the wages.

Employer appears to have made a complete mess of it by lumping it together - so mileage sheets, spread sheets and lots of calculations appear necessary

Fizzylizzy

densol wrote: »

Yes they should definitely be separated. The redeployment taxable expenses are generally paid PAYE and the non taxable genuine expenses are usually paid by a direct payment after submission of a mileage claim. He needs to speak with employer to seperate the two - as like you say the wages are being artificially inflated. Plus then he can claim the additional 20p tax relief on the business miles from HMRC and that will further reduce the wages.

Employer appears to have made a complete mess of it by lumping it together - so mileage sheets, spread sheets and lots of calculations appear necessary

So can he only claim tax relief for the non commuter expenses ? and also re tax credits are the commuter expenses disregarded or do they need to be taken into account when calculating our award for this year ?

Icequeen99

Fizzylizzy wrote: »

So can he only claim tax relief for the non commuter expenses ? and also re tax credits are the commuter expenses disregarded or do they need to be taken into account when calculating our award for this year ?

If the commuter expenses are taxable then they are probably income for tax credits - i have had a quick look at the legislation and can't immediately see a disregard for those. But the other mileage can be deducted.

IQ

densol_2

Fizzylizzy wrote: »

So can he only claim tax relief for the non commuter expenses ? and also re tax credits are the commuter expenses disregarded or do they need to be taken into account when calculating our award for this year ?

Correct

Commuter expenses are an income benefit and taxable - HMRC never reimburse commuter expenses and tax them. As they are taxable as an income they will increase the income for tax purposes.

Business mileage is tax free and available up to 45p for first 10k. Tax relief for the additional 20p can be claimed and will reduce the income as it's an allowable expense is my understanding.