Per Diem

poshpet

Hi

I am new to tax and don't really understand much about it. Could some explain to me if my daily per diem is taxable. I get paid £35 per day that I am abroad to pay for my meals, it is currently payed monthly with my wages and it is taxed with my wages, should I be paying tax on it? The company that i previously worked for i was payed £35 per day like I am now but this was payed seperately from my wages and was not taxed, can someone please explain why am i now paying tax when i wasn't at my previous company. Thanks

Hoddie_2

It would seem that your previous employer had a dispensation granted by HMRC to reimburse your subsistence costs gross, whereas your current employer does not. If this is the case then you may be able to claim tax relief on actual expenses incurred using form P87.

Tax relief for subsistence depends on a variety of things, your trade for one (lorry drivers have very specific rules for example), and whether you're at a temporary workplace or not.

poshpet

Thanks for that. How would my company go about a dispensation granted by HMRC? I am an engineer and i travel to a customer site for 1 - 2 weeks at at time (as I did at my previous company)

dzug

Double check that it IS being taxed. It can be paid with your wages without being added into the taxable income figure.

poshpet

it is being taxed 100% sure, I'm having arguments with the MD about it as im sure that it shouldnt be taxed.