Is anybody clued up on tax matters?

Discussion in 'Finance, Property, Law' started by BigGSheff, Aug 16, 2012.

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  1. Apologies if this has been covered before, I'm posting from my phone and tried search but nothing came up.

    I'm looking for some help to do with salary sacrifice schemes for travel and subsistence?

    As always, any help appreciated.
  2. If it is travel to and from your normal place of work then in the UK you cannot claim it against income tax and you also cannot pay for it out of gross salary before tax (which i assume is what you mean by salary sacrifice). If the travel and subsistence is while away form work eg visiting clients, then the usual method is to pay up front then submit the receipts to employer who then reimburses in full (up to any agreed limits, eg a per day food allowance). An alternative is for employer to pay you an extra yearly sum, which is to be used for all your business travel expenses. All the above is how my private sector employer does things. I don't have a clue about armed forces, but would certainly hope your travel and subsistence is provided free of charge when moving between bases, going on operations etc.

    Have to say I'm appalled that serving members have to pay UK tax when posted abroad, but that's a separate matter.
  3. Should have made it clear, this is for a civvy job. My apologies.

    It appears that the company I work for are telling us we can make claims, through a scheme set up by the company, for thing that we can't actually claim anything for. Such as travel to and from main place of work as you say.
  4. My (non-tax professional) advice would be to tread carefully as HMRC are keen to stamp out as much avoidance as possible. Your company will save on its salary bill, reimbures you what it claims is a business expense and so save a bit of corporation tax, but a sharp-eyed HMRC auditor may decide it's a benefit to employees and so stick you with the tax on that benefit.
  5. I'm getting more and more sceptical about this. It seems that the company are encouraging participation in the scheme as it will benefit them, no surprise there.

    FORMER_FYRDMAN LE Book Reviewer

    I'm not a tax specialist by any means but I run my own company and I guarantee that if you try claiming travel to and from your normal place of work, HMRC will climb into you.

    I'd check everything you're being told very carefully - they don't sound clued up and it's you the Revenue will pursue - probably because your company has become their special project and they are checking the records of everyone who worked there.

    If the company is doing the sort of thing you say, I would check your employment status as I could only see that sort of scheme working if you were considered to be self-employed, in which case you will run into disguised employment issues and these carry some very expensive liabilities.

    From the little you've said, it sounds as though your employer is trying to boost your earnings at no cost to the company and great caution is in order. Dombo 63 is absolutely right and anything which differs from what he describes should be viewed with suspicion.
  7. BiscuitsAB

    BiscuitsAB LE Moderator

  8. Pretty much the same issues apply: The case was about employee taxation/contracts of employment/PAYE not about the agency itself.

    Lots of outfits are still trying to sell employers salary sacrifice schemes and properly done they work, but in the Reed Employment case held the arrangement they had put in place were bollox.

    So current view is that they still work but need to get decent advice and the follow it to the letter in contractual and procedural terms, bearing in mind you will be trusting the HR Department not to **** it up.
  9. BiscuitsAB

    BiscuitsAB LE Moderator

    I took from the article that the problem was that there is no employer/employee relationship between reed and its temp staff and that is what hmrc got them on in the end.
  10. You the know the old adage:

    If it sounds too good to be true, it probably is ;-)
  11. I'm a chartered tax adviser. If you are in a permanent job, you cannot claim for travel between home and work. You could only claim mileage for business travel, such as visiting clients etc - the revenue allow up to 45p per mile for the first 10,000 miles in a tax year, and thereafter 25p per mile.
    If, however, you are in a temporary job, or working from a temporary workplace (you are contracted there for less than 2 years), then you should be able to claim mileage costs for travelling between home and work.
    Hope that helps!
    • Like Like x 1
  12. I complete self assessment and ever wary of ****ing up I use the HMRC helpline a lot. They've always been very helpful and without them I would have missed items out and probably have paid more tax than needed.

    If you're legally trying to avoid tax the financial advisor is the best route. Mine has me in various schemes that avoid tax on the interest from my compensation.
  13. I'm in one. It works. I was a Schedule E based Tax Inspector in a previous life for what it is worth. Who do you work for? I would say it was perfectly legit

    You still get your travel expenses but you also save some NI and so does you employer. It also saves you fannying about with Mile Allowance Relief claims to HMRC if your employer pays a mileage allowance that is less than the allowable HMRC rate
  14. Don't forget Mileage Allowance Relief if the employer pays less than the allowed rates