Various tax questions. Subsistence, fuel

Antony_Lynch

I work as a travelling electrician for a company who have sites all over the U.K. I have a company van but sometimes have to put diesel in it to get myself home and back on a weekend and from my `digs` to the site every day. At the moment I`m based at South Mimms (A1/M25 junction) but live in Middlesbrough and fuel costs come to about £60 a week.I get subsistence of £197.19 for 7 days (£28.17/day) which I have to use to get 4 nights lodging, £28 a night doesn`t get you much these days! I know about the 40 pence/mile allowance but it`s not my own car I`m using.

fengirl_2

Where does your contract of employment state you are based?

Antony_Lynch

It says I`m reqired to work anywhere in the U.K.

withabix

Why do you have to put fuel in yourself?

Antony_Lynch

Because it doesn`t move without diesel???? I`m not sure what you mean. I don`t have a fuel card and the various depots around the country have an electronic key fob to activate the pumps. No key fob =no diesel. If I have to use my own van for the job then I get fuel but generally they give me one of their cherry pickers.

jimmo

I thought withabix’s question was a good one but perhaps those of us who claim to know a bit about tax talk our own, different language.
When you refer to South Mimms are you referring to the Service Station on the M25 or does your employer have a depot nearby.
If your work is generally inside the M25 then it is a fair bet, at this stage, that your journey from home to South Mimms is normal commuting, not allowable for tax purposes.
If your employer is paying you subsistence of £197.19 per week then it’s not for 7 days. It’s for 4 nights plus 1 daytime. Even then it’s not exactly luxury living.
However, if you are actually based at South Mimms the subsistence payments are taxable. Your digs are within your normal area of work.
I just get the feeling that your employer has things better organised than you might think and that your base of employment is in Middlesbrough. Then your journey to South Mimms is travelling from your base of employment and the costs of the journey and the subsistence are tax deductible.
If I have understood what you have said then whilst your employer is happy for you to fill up with diesel at any of its depots if you actually fill up at a petrol station then that is your choice and your employer will not reimburse you.
If your employer has sites all over the UK, then at any given time, how far are you away from a free diesel pump?
Just as an example, if you are based in South Mimms but your employer’s nearest depot is in Heathrow then that’s a fair journey but it is manageable. Even if you have to make the journey in your own time you could do it on a Thursday evening so that the tank is pretty full on Friday when you head home.
Please think about that. If you are paying out for diesel when you do not need to than the taxman is not going to subsidise your folly.

Antony_Lynch

I don`t have a normal place of work. I live in Middlesbrough and at the moment I`m working from a depot at South mimms but on Friday I could be told that I`m at Manchester next week. Therefore, no permanent place of work. They don`t have a `free` pump anywhere, it`s all by key fob, it`s down to the individual depot manager wether he`ll allow you fuel or not. My subs are based on 7 days i.e. £28 a day and are not taxed. I don`t get more for working 7 days and I lose 3 days worth for having a day off.

withabix

I'm assuming that you do street lighting as you youe a cherry picker?

Your employer should be putting ALL the fuel in this vehicle, or reimbursing you by means of expenses for the fuel you put in it yourself, as you are working away from home and it is a specialist vehicle required for carrying out your job.

If you fuel it, you are subsidising your employer's business and in effect he is therefore charging you a fee to work for him.

The subsistence is being paid in accordance with the current HMRC rules, which may go part of the way to (providing your employer with an excuse for) explaining why your employer isn't paying you for the fuel used to get from your home to your place of work. You are being paid a full week's subsistence yet only spending 4 nights away from home. If I remember correctly, you should only get 7 nights if you spend 5 nights away from home. You should also be getting taxed on part of this (1 night/2nights?) - I haven't been on subsistence for a year or so, hence I can't remember the HMRC rules.

In short:

1) Subsistence probably OK or possibly a bit too high in terms of number of nights paid (7 for 4).
2) It's your employer's van - he should be putting all the fuel in except possibly for periodic travel home.

jimmo

I’m really struggling here with my taxman’s concept of what goes on and the reality you face.
I tend to agree with Withabix that your employer should provide all the fuel or reimburse you for what you buy.
I really think you should tackle that with your employer. If your employer is nationwide then I find it easy to imagine that if you approach a local manager for a tank full of diesel he is going to see that as money spent from his budget but not giving him any recompense. I can imagine a lot saying no for sound local reasons. But that is not good enough for you. Local managers can‘t sort this out, they need direction.
From a taxman’s point of view if your employer has arranged your employment circumstances such that you are based in Middlesbrough then your employer really should pay the full costs of your travel to South Mimms.
I imagine that they are well aware of the “2 year rule” and make sure that you get an occasional posting elsewhere.
As regards subsistence I think that there is an industry standard and there are tax rules.
From the taxman’s point of view if you leave Middlesbrough on a Monday morning and come back on Friday afternoon you have been away for 4 nights and are entitled to claim for those 4 nights.
If your industry standard lets you claim for 7 nights @ £28 per night then so be it. I don’t understand but accept it as a fact.
If your employer has a dispensation from the taxman to pay you £28 per night I’m afraid that the taxman doesn’t appreciate that you are being paid for nights when you are not away.
On the other hand, I really find it difficult to see how you could actually manage on £28 per night anywhere near London.
Essentially, you are entitled to tax relief on the cost of overnight accommodation, including breakfast plus the additional cost of other meals above what it would have cost you at home.
As I see it now there is a very real difference between what your employer provides for you and your real costs. I can’t help but see that your employer is not actually playing the game exactly within the tax rules and you are losing out.
However, anything you do in the way of claiming tax relief will endanger your employer to a PAYE audit.