Free Money From the Taxman

Discussion in 'Army Pay, Claims & JPA' started by vaeviso, Jan 10, 2007.

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  1. Chaps,

    Allow me to share with you a tip regarding tax relief on work-related travel that has just earned me a £2600 tax rebate and could have earned me a lot more had I known about it earlier.

    HM Revenue and Customs allow everyone (including the Armed Forces) to claim tax relief for work-related travel (and other expenses incurred due to work). However, they don't usually allow you to claim tax relief on travel from home to your place of work (what they call "ordinary commuting").

    However, if you get a posting of 24 months or less, HMR&C consider this to be a "temporary workplace" and allow you to claim relief at your highest income tax rate for travel from home to that temporary workplace (because it is no longer defined as "ordinary commuting"). Please note, it must be 24 months or less from the outset. It isn't a "temporary workplace" if your posting was 3 years for example and gets cut to 24 months or less.

    HM R&C allow relief at a rate of 40 p per mile for the first 10000 miles and 25p per mile for the remainder. You must subtract any allowance that work give you from those rates (RPOD, RILOR, GYH(D) or whatever). For example, I had a 1 year posting that involved a weekly commute of 400 miles so I did approx 18400 miles in that year. I got 15 p per mile RILOR. I claimed tax relief at 40-15=25 p per mile for the first 10000 miles and 25-15=10 p per mile on the remaining 8400 miles. Thus I claimed relief on (10000x.25) + (8400 x .1) =£3340 and got 40% of that back - £1336.

    You claim by filling in the amount you're claiming relief on (eg the £3340 from my example) in box 1.32 of the Employment Supplement of the Self-Assessment tax return. It helps if you show your working on the additional information page. You can do your SA return online and you get the money into your bank account within a matter of days. You can also claim back 5 years from the 31 Jan following the current assessment year, but you have to do that by letter to your tax office. It took a long time, but when the tax man eventually replied to my initial claim, he asked me if there was anything else I wanted to claim for! There was no quibbling and he accepted my calulations with no supporting evidence (they can of course ask for that later).

    I should point out that I'm not a tax advisor or an accountant so I suggest you get on the HM R&C website and read up on it for yourself. However, I know that I am £2600 better off simply for finding out about this (from a Crab would you believe!), then filling in a form and writing a letter. You know it makes sense!
  2. vaeviso,

    Top tip - many thanks. I was aware you could claim for work related travel when service transport (or rail warrant) was not available but was not aware of the example you just gave. Fabulous!

  3. Hi all,

    My first post here.

    Does anyone know if I would qualify for this?

    I got a posting order for 24 months but have put in a request for an extension, which I will probably get....

  4. I claim this as a contractor, but must admit I that I didnt know it could applie to 24mnth Tours. However if it is the same rule that allows it, then the cut off point is "when you know you will exceed the 2 year point". So therefore you would be able to claim it up until you you got confirmation that you were extended. Using my own example, my first contract was for a year (claimed no problems), this was extended by 6 months (carried on claiming), extended again by 6 months (the whole period was actually 2 years and 2 days. From the day I got my 2nd extension, I could no longer claim. So effectively I only managed to claim 18 months worth.)

    Be aware that they changed the rules now and you do need to keep a log of when you travelled, distances etc. You do not need to provide this unless asked, but you can be asked (I havent been asked yet)
  5. Once you know that the "temporary workplace" will be your place of work for more than 24 months then you receive lose the right to claim the HMRC mileage allowance for tax purposes. In any case after 2 years the "temporary workplace" ceases to be regarded as temporary and is deemed to be your normal place of employment. In your case, the right to claim the 25p/40p per mile would cease the moment your engagement was extended past the 24 month point.

    I'm not an accountant (nor, heaven forbid, from HMRC) but my job needs me to have a reasonable understanding of this. The HMRC Guidance is linked
  6. Fantastic post! The rest of your reading this should pass the word round quickly before the tax man decides 100,000 forces claimants is too much to bear.
  7. On the subject of getting a bit back, I originally posted this last August but no-one replied, it seems to work for a lot of people here and could be worth further investigation.

    Text of original post :

    OK, thought I'd throw this one into the pot and see what happens.

    Chatting to a friend last week, a RN Officer (sorry but some of them have mates). For the past 4 years he has succesfully claimed ALL of his mess bills and mess associated fees back from HM Govt based on the fact that he has no choice in attendance. This has included costs for "3 line whip" dinners, summer ball etc.

    This has amounted to approx £1500 per year!

    Am I missing a trick here? along with most of the Armed Forces? OR has he been very lucky to get away with it so far?

    Thoughts please as i have a lot of adding up to do and I want to know if it's worth it.
  8. Good point. Move fast before Grasping Gordon scents the money... It'll probably be some bollox excuse about not encouraging travel, for environmental saviour points.

    I have to fly home once every month or so from my perch here in the EU. If this works VV, you have my undying gratitude.
  9. Re: Mess bills, I just lifted this from the HMRC site, dunno if this might be what he was using.

    Employees of concerns not carrying on a trade
    Section 336 20.11 Employees of non-trading concerns such as the civil service and the armed forces are entitled to
    a deduction for entertainment expenses which are incurred wholly, exclusively and necessarily
    in the performance of their duties.
  10. How far is it to Shaiba at 40p/mile?