HMRC rules for obtaining tax free lodge allowance

Pythagoras

Hi Everyone,

I am having some trouble getting my lodge allowance from my company and was wondering if anyone can help. Sorry for the long post, but I’ll try to explain as concisely as possible…

I started a new job a few months ago and I am working away from home, so I am entitled to a lodge allowance. As I have a mortgage on my own home I am also entitled to get the allowance tax free. The company asked me to fill in a P17a form (I think this is just an internal form). The form is to confirm that my home address is where I normally reside and needs to be signed by someone who:

• Is an MP, JP, police officer or professionally qualified person, or a person of similar standing.
• Has personal knowledge of me and knows that this is my normal place of residence
• Is not a family member or employee of the same company
• Is resident in the same area as my home address

So I completed the form and got it signed by a friend who I have known for 20 years and is a doctor. I then got a reply, saying that this was unacceptable because the ‘person on the declaration page should resident inthe same area (i.e. 10 miles) as the applicant’. – As though everyone knows that the definition of the same area is within 10 miles. My friend lives 17 miles away by road and 12.5 miles as the crow flies. I would say that 17 miles is reasonable,considering the very tight criteria on who can sign the form.


I questioned this definition, and was told that this was because of ‘HMRC rules’. Despite a few emails, I am struggling to get an answer as to what HMRC rules they are referring to. I am now in a position where I do not know anyone who fits all their criteria and I am owed about 2 months of lodge.

Does anyone know the actual HMRC requirements for obtaining a tax free lodge allowance? Or any suggestions as to how I could sort this out?

Thanks everyone

jimmo

Under normal tax rules you definitely wouldn’t qualify for tax relief in the circumstances you describe so I assume you are in the building / civil engineering industry.
If so, the rules are determined by employers organisations and the trade unions and HMRC simply accepts that payments correctly made under Working Rule Agreements are tax free.
http://www.hmrc.gov.uk/manuals/eimanual/EIM50605.htm
http://www.hmrc.gov.uk/manuals/eimanual/EIM71300.htm
As regards who can sign your P17a form (definitely not an HMRC form) I can only suggest you ask your employer to define what is “a professionally qualified person, or a person of similar standing.”
As a retired civil servant I can, and do, countersign Passport and Driving Licence applications but I am not sure that your employer would accept me even if I were your neighbour.
Anyway, as the rules are set within your industry, HMRC won’t be able to help you I’m afraid.