P11D & Expenses

SpeedSouth

Hi,

Does anyone know the answer to this?

I'm in FT employment with home as my place of work. However I commute to the office/site once a week by train and then stay in hotel for 1-3 nights a week.

All my expenses are covered, food/hotels/travel etc...
In my previous job I had a similar arrangement but it was always to a different site rather than the office.

However HR mentioned at work that potentially these expenses will be seen as a taxable benefit if it is a continued arrangement (which it will be).

Below is the reply I received from them. Assuming my expenses are circa £15k a year how much tax would I see on this if I had all this applied to my P11D. Is it simply my tax rate on £15k? So at HRT I'd see an extra tax bill each year of £6k?

HR Email....
"HMRC would argue that this office is also your place of work because you come here quite often. They would argue that potentially all your hotel accommodation, meals and travel are therefore benefits in kind and taxable.

This does not kick in immediately, but could be relevant if the arrangement continued over a period of time.

We have not treated these costs as a P11D expense to date, but this is something that is rising up my very long to-do list, as I do think we need to resolve this soon.
"

Caz3121

24 months is the key here....if you already know that this pattern of work will continue (over 40% of your time in the office) then you should not be receiving tax free expenses
some information here http://www.companybug.com/travel-expenses-what-is-the-24-month-rule/

skaboy607

Hi Adam,

I am in a similar situation; full time employment and do project work so am based at one site most of the with occasional travel to others. My permanent place of work is registered as the company hq.

I have enjoyed my expenses being paid in full for the last 2 years but now am subject to this rule of the hmrc. It seems there is no way to escape it.

I have a number of issues with this:

1) it is the companies decision for me be at this location so why should I foot the bill
2) to buy my travel, the money I use has already been taxed so how can it be subject to tax again?
3) on my first month of having expenses taxed I received only 48% of my expense claim which seems very low given my tax bracket of 40%

I'm interested to know how the tax is calculated also.

Thanks

agrinnall

skaboy607 wrote: »

3) on my first month of having expenses taxed I received only 48% of my expense claim which seems very low given my tax bracket of 40%

40% tax + 12% employee NI = 52%

100% - 52% = 48% net pay.

unforeseen

skaboy607 wrote: »

Hi Adam,

I am in a similar situation; full time employment and do project work so am based at one site most of the with occasional travel to others. My permanent place of work is registered as the company hq.

I have enjoyed my expenses being paid in full for the last 2 years but now am subject to this rule of the hmrc. It seems there is no way to escape it.

I have a number of issues with this:

1) it is the companies decision for me be at this location so why should I foot the bill
2) to buy my travel, the money I use has already been taxed so how can it be subject to tax again?
3) on my first month of having expenses taxed I received only 48% of my expense claim which seems very low given my tax bracket of 40%

I'm interested to know how the tax is calculated also.

Thanks

To add to your woes, if you were aware beforehand that this would exceed the 2 year limit then you should not have claimed any expenses from that point onward.

It's not a case of being able to claim up to the 2 year point but claiming up to the point you were aware it would 3xceed the 2 year point. If you knew at the start it would be 2+ yrs then you should never have claimed in the first place

skaboy607

Thankfully I wasn't aware - it has been 3 projects at the same site campus. I was only meant to be there for the first.

Just cannot see how the HMRC get's away with that but nevermind - i'll add it my list of frustrations that I will never be able to resolve

agrinnall

skaboy607 wrote: »

Just cannot see how the HMRC get's away with that but nevermind - i'll add it my list of frustrations that I will never be able to resolve

It's not HMRC to blame (if there is any blame), it's the politicians who have made the rules, HMRC are simply implementing them. Take it up with your MP if you think it's unfair, although you probably shouldn't expect a huge amount of sympathy.

TheCyclingProgrammer

skaboy607 wrote: »

Thankfully I wasn't aware - it has been 3 projects at the same site campus. I was only meant to be there for the first.

Just cannot see how the HMRC get's away with that but nevermind - i'll add it my list of frustrations that I will never be able to resolve

HMRC's POV is that once you are working at (or expect to be working at) the same location for more than 24 months (and you spend more than 40% of your time there) then it is no longer considered a temporary workplace.

There are additional rules for travelling to multiple locations, travel expenses rules aren't the most straightforward.

skaboy607

I Understand HMRC point of view.

Perhaps I don't understand why there is need for HMRC to make the statement or even have a view on it.

If a business chooses to pay travel allowances for their employees, then why should it be seen as a benefit, be it permanent or temporary.

There are many other avenues where hmrc/government tax citizens and for the most part it is generally accepted without question. This on seems a step too far to me personally, especially as they are taxing the same money twice.

Just my simple view on the matter.

agrinnall

skaboy607 wrote: »

Just my simple view on the matter.

As I've already said, take it up with your MP if you don't agree with it.

SpeedSouth

Right so this all sounds like it could add up to a vast sum of money...

If I end up only being paid 48% of my expenses suddenly the wage becomes less appealing.

The 40% rule is the only thing that could be the difference here. That implies I need to work more than 2 days of every week in the office. So if I do a strict 2 days I'm not subject to this?

As I said though one weeks travel may still be into London but to another site rather than the Registered office. Reading the above means potentially I'm not working more than 40% of my time from any one place?