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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13917
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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My company asked me to relocate to Aberdeen and pay my monthly

Resolved Question:

My company asked me to relocate to Aberdeen and pay my monthly rent, my P11D now has £24000 as benfit in kind due to the high rental in Aberdeen. Anyway around this taxable benefit ?
Submitted: 3 years ago.
Category: Tax
Expert:  Sam replied 3 years ago.
Hi

Thanks for your question, I am Sam and I am one of the UK tax experts here on Just Answer.

I am afraid not, as whilst the costs to move (such as the moving costs for removal men etc) is a benefit that can be exempted from tax, the actual day to day living expenses - remains liable to tax.
On the plus side you just pay your highest rate x £24,000 rather then are out of pocket for the whole of the £24,000

I have added a link as to the full extent of what qualifies and exempt from tax and National Insurance for your information
http://www.hmrc.gov.uk/payerti/exb/a-z/r/relocation.htm#1

But the rent itself is liable I am sorry to say.

Please do feel free to ask any follow up questions

Thanks

Sam
Customer: replied 3 years ago.

Thanks Sam,


My company will reimburse but my thinkng is that HMRC then get a "double dip"


My company will have to pay me a lump sum which is of course taxable at 45%, which then leaves me with the overall amount required based on the £24k @45% = £10.8k so that I pay them in JANUARY after my self assessment is submitted .. so government gets the same amount twice ?

Expert:  Sam replied 3 years ago.
Hi Robert


Thanks for your response

If the amount paid as a lump sum is paid through your wages and subject to tax and National Insurance, then it should NOT also be reported on a p11d - its either/or depending on how the costs were covered,

But as the money was paid to you, to use as you saw fit then it is just paid through the salary and NOT reported on the P11d,.

If your employer had paid the landlord directly - then it would be reported on a P11d so HMRC could tax it - but it is wrong that it is taxed twice and you need to address this issue with your employer, if that is the case.

If this is NOT what you meant, then please expand further


Thanks

Sam
Customer: replied 3 years ago.

Hi Sam,


Sorry, I wasn't too clear..


Company pays directly to landlord but I get taxed on benefit via P11D.


Company then has to pay me a gross amount which will net at £10.8k which I owe to HMRC to clear my tax bill.


So HMRC gets the extra tax on the gross amount through my salary and then the payment from me for the unpaid tax.


 


I guess to fix then company would be better paying me a monthly sum to cover the rental and I pay direct to landlord, therefore no BIK on P11D .?

Expert:  Sam replied 3 years ago.
Hi Robert

Thanks for your response

I see - then the P11d completion is correct, and the because the company pay the tax bill you are then charged tax on that too - this is correct.

No - you are better off leaving things as they are
If you paid the rents yourself (and your employer paid you through your salary) then you would be £10,800 out of pocket for the tax due on the rents paid.


But this way you are charged £10,800 by HMRC - the employer then pays this bill for you (so you are no better of worse off) and then you are taxed on the £10,800 x 45% = £4860 which you pay
So £24,000 worth of rent costs you £4860 a year !

Much better !

Do feel free to ask any further questions, but if you could rate the level of service I have provided, it would be appreciated, as this ensures that I am credited for my time.

Thanks

Sam



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