Mileage allowance reducing universal credit.

Robbo682

I've recently started claiming UC for what would have been child tax credits under the old system after getting divorced.
I use my own vehicle for work paying for my own fuel tires etc. I am reimbursed through the government mileage allowance scheme. 45p per mile, I can only claim for business journeys essential for performing my duties. This is tax free and I recieve the full amount in my net salary. My payslip shows the separate amount for business miles. The problem comes when the DWP simply take the total net payment for the month and reduce my credit by 63p in the pound. I have asked if this is correct as it leaves me out of pocket but DWP won't answer that question. They say speak with my employer and the hmrc as they just take the feed direct from them.
Hmrc says check with your employer. My payroll dept are very polite and agree that it is reimbursement not income but effectively  just give me a blank expression and shrug.
Does anyone else have experience of this? 

pmlindyloo

Have you presented your payslips to UC to show how much the reinbursement is?
You may wish to copy and post this on your journal.  I

H3081 Employed earnings will not initially include certain amounts which HMRC treat as earnings and are known as benefits in kind
 These are
 1. certain expenses payments
2. cash vouchers and credit tokens
3. living accommodation provided to an employee or a member of their family or household
 4. cars, vans and related benefits
 5. employment-related loans
6. notional loans in respect of the acquisition of shares
 7. disposals of shares for more than the market value 8. employment-related benefits. H3082 – H3107 describe these amounts. 1 UC Regs, reg 55(2)(a); Income Tax (Earnings and Pensions) Act 2003, Part 3, Chapters 2 to 11 Taxable expenses

H3082 These are expenses paid by an employer to the employee in respect of expenses incurred by reason of the employment . For example, a mileage allowance paid to an employee who has used their own car for business. 1 Income Tax (Earnings and Pensions) Act 2003, s 70 

calcotti

I don’t know how this is supposed to work but UC should not be taking the mileage payments into account.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/893721/admh3.pdf

Amounts exempt from taxation and are excluded from being earnings for UC
H3108 Particular payments which are exempt from taxation do not fall to be treated as earnings for UC1. These are
1. mileage allowances and passenger payments

Suggest you refer them to their own guidance and provide a detailed breakdown of your payslips. You should ask for all previous payments which have taken the mileage payments into account to be recalculated. If needed they can provide you with a link so that you can upload copies of your payslips to your journal.

I don’t know how expense payments are meant to be reported - I can’t believe claimants are expected to provide a payslip breakdown to get this treated correctly. I would expect that expense payments have a separate place for reporting to HMRC and would also expect that UC would be able to see this. Possibly your employer is reporting them incorrectly (?)

Robbo682

Thank you, I have provided them with my payslip and copy of the mileage claim form for that month (incidentally they made me attend the job centre for this, no option to email the documents and I did ask them), the response in my journal 24 hours later was, "The RTI feed from HMRC is correct your credit payment will not be recalculated." 
I have challenged this, which is pending.  The above regulations are very helpful thank you.

calcotti

Robbo682 said:

Thank you, I have provided them with my payslip and copy of the mileage claim form for that month (incidentally they made me attend the job centre for this, no option to email the documents and I did ask them), the response in my journal 24 hours later was, "The RTI feed from HMRC is correct your credit payment will not be recalculated." 
I have challenged this, which is pending.  The above regulations are very helpful thank you.

If necessary formally request a Mandatory Reconsideration.

Icequeen1

Robbo682 said:

Thank you, I have provided them with my payslip and copy of the mileage claim form for that month (incidentally they made me attend the job centre for this, no option to email the documents and I did ask them), the response in my journal 24 hours later was, "The RTI feed from HMRC is correct your credit payment will not be recalculated." 
I have challenged this, which is pending.  The above regulations are very helpful thank you.

You might need to check with your employer - non-taxable expenses shouldn't be going through to DWP on the RTI feed. There is a box for them on the submission your employer sends, but they shouldn't then go across to DWP if they are in the correct place on the submission. Not only should they be disregarded, but even if you are not reimbursed, you can deduct mileage for UC. See for example https://www.litrg.org.uk/latest-news/news/180703-universal-credit-and-unreimbursed-expenses. 

huckster

Agree with @Icequeen1.  What some employers appear to do is report amounts which show as third party payments on the RTI feed.  These are then ignored, as the third party payments cover many different amounts which are paid via a payroll deduction. They appear to add amounts such a travel reimbursement into the third party amount data field and then pay the employee the amount owed.  Not sure why they do this.
It will be a case of your employers not reporting the information correctly and they need to find out how they should be reporting the information.
This does not fix the previous assessment period payments affected by this and the only way you can request a fix is submitting evidence as part of a Mandatory Reconsideration process.

Robbo682

Thanks you all for the answers I have a mandatory reconsideration pending so I'm not sure what the first two refusals to my question were all about.  I will update with the result when I know. I will also recontact my payroll dept to try and fix it going forward. 

DropZone1

A solution would be to declare yourself self-employed through Universal Credit and each month declare £nil earnings but expenses of whatever your mileage is. Although it will be at a flat rate of 45p a mile for the first 833 miles and then 25p for miles 834 and  beyond. 

I would honestly doubt the success of a Mandatory Reconsideration request not least because it may well be considered that the best solution to this is for your employer to update their records with HMRC, which would in theory cause an retrospective adjustment/recalculation of previous months entitlement. I cannot see them agreeing to recalculate past UC payments even if you supply evidence if doing so is going to lead to a discrepancy between what's being reported to HMRC.

Except for the very rare cases where it is not possible or not reasonable to ask for an employee to request their employers amend their earnings period declaration(s) to HMRC, I think the general principle now is 'RTI' (the system through which UC receive information on earnings) is gospel. I don't think they'd consider it unreasonable for you to rectify this through your employer

Icequeen1

DropZone1 said:

A solution would be to declare yourself self-employed through Universal Credit and each month declare £nil earnings but expenses of whatever your mileage is. Although it will be at a flat rate of 45p a mile for the first 833 miles and then 25p for miles 834 and  beyond. 

That wouldn't be a solution. The OP isn't self-employed. 

DropZone1

Icequeen1 said:

DropZone1 said:

A solution would be to declare yourself self-employed through Universal Credit and each month declare £nil earnings but expenses of whatever your mileage is. Although it will be at a flat rate of 45p a mile for the first 833 miles and then 25p for miles 834 and  beyond. 

That wouldn't be a solution. The OP isn't self-employed. 

It absolutely is a solution. There's no rule to state you have to be actively self-employed in order to be declared as self-employed. Many people on Universal Credit are declared self-employed and report £0 earnings every month. It would be a viable work around if he isn't successful in getting his employer to report the information directly to HMRC as there isn't a cat in snowball's chance UC will grant a Mandatory Recon as taking into account earnings as reported to HMRC isn't a 'decision' UC have made so from their perspective there's absolutely nothing to reconsider unless it becomes unreasonable to expect the claimant to resolve the issue through their employer, which I cannot see applies.

The options are;

1) to get employer to update HMRC records,
2) declare himself S/E to UC and declare £nil S/E income but declare mileage as expenses
3) Suck up the loss