P11D & Expenses

booksurr

adam81 wrote: »

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?

the travel rules are , as mentioned, rather complex

you say in your first post

adam81 wrote: »

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.

so if your contract of employment states your home is your permanent place of employment then , as you know, travel elsewhere is a temporary workplace. BUT the rules re temp workplaces are, as mentioned, based on the "24 month rule" (including expectation of how long that pattern will be from the outset)

so it is very possible that you do in fact have 2 permanent places of employment, not home and a temporary place. As such your travel costs are ordinary commuting costs and any contribution towards them by your employer is indeed taxable, as it is the same as being paid extra salary

read the rule book for the details and come back if there is another angle you think you can challenge. Pay particular attention to 3.10 and 3.11 - definitions of regular attendance. Then look at section 3.36 onwards which deals with "home based" employees. I'd say at the moment your HR dept is probably cautious but right, it is taxable

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/517266/490.pdf

TheCyclingProgrammer

As I said though one weeks travel may still be into London but to another site rather than the Registered office.

For the purposes of the 24 month rule, its the overall location, not the site. Its open to interpretation and also has a lot to do with the journey and cost of travel but HMRC will consider two sites in London to be the same location if they are roughly in the same area and your overall journey (and cost) remains relatively unchanged.

My interpretation of this has always been it depends where you are coming from - if you leave in East London then a journey to Kensington might be significantly different to a journey to the City. On the other hand, if you live in Birmingham and get the train to London, the journey isn't significantly different (as the bulk of the travel is from Birmingham to London) and probably costs the same.

Pennywise

If you're so badly out of pocket because your employer wants you to travel to a different location, then surely it's a discussion you need to have with your employer, i.e. either they don't send you there or they pay you more to compensate for your tax.

SpeedSouth

Pennywise wrote: »

If you're so badly out of pocket because your employer wants you to travel to a different location, then surely it's a discussion you need to have with your employer, i.e. either they don't send you there or they pay you more to compensate for your tax.

Obviously yes this will happen, when it gets to that point. Keen to investigate exceptions first though as I don't imagine this will result in my favour.

SpeedSouth

TheCyclingProgrammer wrote: »

For the purposes of the 24 month rule, its the overall location, not the site. Its open to interpretation and also has a lot to do with the journey and cost of travel but HMRC will consider two sites in London to be the same location if they are roughly in the same area and your overall journey (and cost) remains relatively unchanged.

My interpretation of this has always been it depends where you are coming from - if you leave in East London then a journey to Kensington might be significantly different to a journey to the City. On the other hand, if you live in Birmingham and get the train to London, the journey isn't significantly different (as the bulk of the travel is from Birmingham to London) and probably costs the same.

So that does that then. I'm in the Midlands so the tube at the other end is likely not be counted

SpeedSouth

booksurr wrote: »

read the rule book for the details and come back if there is another angle you think you can challenge. Pay particular attention to 3.10 and 3.11 - definitions of regular attendance. Then look at section 3.36 onwards which deals with "home based" employees. I'd say at the moment your HR dept is probably cautious but right, it is taxable

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/517266/490.pdf

Yeah that doesn't make for nice reading. Most angles I thought I could approach from are barricaded there!

TheCyclingProgrammer

adam81 wrote: »

So that does that then. I'm in the Midlands so the tube at the other end is likely not be counted

Just my opinion, FWIW, not definitive advice. But if you are trying to determine what constitutes a significant change in journey you do need to look at the overall picture.

booksurr

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 no, it is your choice to stay working for that company and/or to work in the kind of industry which means they move you around a lot. I quit a job when my "base" was relocated and the 180 miles round trip per day I thus faced was then going to be my own commuting cost

2) to buy my travel, the money I use has already been taxed so how can it be subject to tax again? you seem confused. If the company pays your expenses then you are not buying your travel out of money you have already been taxed on. You are buying your travel out of money which is given to you over and above your normal salary - as a result it is a pay rise and is taxed accordingly

the rules are very clear
- if it is planned that you will be at the same place for more than 24 months then it is not a temporary workplace and all travel to it, even in day 1 is just ordinary commuting. If your company pays towards that it is simply extra salary you've been given and so is taxable.

if you feel that having 48% of your commuting cost paid for you by your company is not enough then change jobs because most people get 0% of their commuting costs paid for by their employer

the principle underlying the tax rules is fair anyway. You choose where to live and work, if, as with the other poster, you choose to live in the Midlands and work in London why should you get that travel cost tax free when those who live closer to London don't. If commuting was tax free then the further away you live the more tax efficient it would be, and that is of course nonsensical.