Travel allowance 22 September 2022 at 10:27AM in Benefits & tax credits 9 replies 311 views

kimsin

Hi, I currently work picking up, delivering & serving school meals. As I use my own car to pick up the school meals from a different school, I get £12.05 a day from my employer for diesel & the use of my own car, I'm paid for 7 miles i believe. My question is should this travel allowance be included in my total pay for universal credits? I know this may be that my employer needs to report it to hmrc differently, as thats where universal credits get their info from, but before I speak to my employer I need an answer first. I spoke to universal credits who said to ask hmrc, so I spoke to hmrc & they said to ask universal credits. My wages are usually around the £750 per month, but £250-£300 of that are the travel allowance. Should universal credit take into account the whole £700 or just my salary thats only £400? 

kimsin

I maybe should have said also that the allowance is separate on my wage slip, down as " school meals"

liz_bartun

It depends on whether or not the payment is taxable. It sounds like it should be, as £12.05 is more than 7 miles x 45p (the approved mileage rate HMRC allow you to be paid tax/ni free). You'd have to be travelling almost 27 miles between schools per day for it to possibly appear otherwise.

So it looks to me like the full £700 should be used for the wages deduction calculation.

What figure are UC using?

kimsin

Thank you for replying. I think i actually get £12.15 a day, 7 miles @ 45p & £9 a day for something else? The use of my car maybe? I shall have to check with payroll. The whole lot goes through as taxable pay, though I don't earn enough in a year to pay tax. UC use the total ammount for their calculations. 

NedS

kimsin said:

Thank you for replying. I think i actually get £12.15 a day, 7 miles @ 45p & £9 a day for something else? The use of my car maybe? I shall have to check with payroll. The whole lot goes through as taxable pay, though I don't earn enough in a year to pay tax. UC use the total ammount for their calculations. 

If the employer is putting it through as taxable income, then it will count as income for UC.

liz_bartun

kimsin said:

Thank you for replying. I think i actually get £12.15 a day, 7 miles @ 45p & £9 a day for something else? The use of my car maybe? I shall have to check with payroll. The whole lot goes through as taxable pay, though I don't earn enough in a year to pay tax. UC use the total ammount for their calculations. 

If you do drive 7 miles between schools each day then that £3.15 per day should really be put on a separate line on your payslip so it can go through as non-taxable. But there could be a reason payroll think it should be taxable; you'll have to ask them, or it might be written in your contract.

tifo

kimsin said:

My wages are usually around the £750 per month, but £250-£300 of that are the travel allowance. Should universal credit take into account the whole £700 or just my salary thats only £400? 

You could put £750 wages and £300 expenses, leaving £400 income. But you'd need to check with your employer or HMRC.

calcotti

tifo said:

kimsin said:

My wages are usually around the £750 per month, but £250-£300 of that are the travel allowance. Should universal credit take into account the whole £700 or just my salary thats only £400? 

You could put £750 wages and £300 expenses, leaving £400 income. But you'd need to check with your employer or HMRC.

OP doesn't 'put' anything. As they are employed UC will use the information reported to them through RTI by HMRC.

sheramber

As you get a cah sum it looks like it comes under this

Round sum allowances

If you provide a set amount of cash for employees regardless of how they spend it, this is known as a ‘round sum allowance’.

This counts as earnings, so you’ll need to:

• add the full amount of the round sum allowance to the employee’s other earnings when deducting and paying Pay As You Earn (PAYE) tax through payroll
• add the amount of the round sum allowance - minus any specific business expenses covered by it - to the employee’s other earnings when deducting and paying Class 1 National Insurance through payroll

https://www.gov.uk/expenses-and-benefits-cash-sum-payments/round-sum-allowances

tifo

calcotti said:

OP doesn't 'put' anything. As they are employed UC will use the information reported to them through RTI by HMRC.

Ah yes, i missed that ....