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Sam
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Category: Tax
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Hey All, this query should test you! I was transfered from

Customer Question

Hey All, this query should test you! I was transfered from the company plant in Ireland to a sister plant in the UK for a duration off 11 months. I continue to get paid from the irish plant in euros and pay all irish associated tax. The company in the UK gave me a pool car which I needed to get around over here, 6 months into this post they told me I needed to pay BIK on the car. I informed them that I was exempt as i met all the criteria in
http://www.revenue.ie/en/tax/it/leaflets/benefit-in-kind/private-use-cars.html#section10
• The employee travels abroad without the car
• The car is not available for use by the employee's family or household during the employee's period of absence outside the State
However the company is insisting that I must pay it and have started taking it out of my monthly pay plus they want thefirst 6 month BIK to be paid also. They have not given me a clarrification under what section of the tax they are justifing this?
I feel they are missing the point that I am not tax domiciles here in the UK
Anyone got any experiance in such a situation?
Many thanks,
Patrick
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.
Hi
Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer.
First the link you provide has no bearing on your situation as it merely relates to what adjustments would be needed if a company car is available for less than a full tax year, and any deductions your employer is making can only be as a result of HMRC instructing these deductions and they will make the adjustment when the company car ceases to be used by you.
So the charge being made is at this time taking into account the use of the car from when this transfer to the UK began (and you first took the car on) and making sure correct deductions are made from now until such time you no longer have use of the car.
Even if you were paid from the UK you would still have this charge arising from the UK perspective of Part 3 Chapters 2 to 11 Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003).
In Ireland section 6 of the Finance Act, 2003 and Sections 16 to 21 of the Social Welfare (Miscellaneous Provisions) Act, 2003)
The only point I will pick up on is the fact you mention its a pool car - so do other employees have use of this, or have you been using it exclusively,
and do you have private use of this vehicle OR is it returned back to the employment base - each evening.
Let me know if I can be of any further assistance
Thanks
Sam
Customer: replied 1 year ago.

Hi Sam,

I believe you also are missing the point that I am not tax domiciles here in the UK. The BIK I am being charged is going to the Irish goverment not the UK govenment. The Irish govenment is not requiring me to pay BIK at I am out of the state.I continue to get paid from the Irish plant in euros.

The car is not used for private use as I am here working. my residance is in Ireland.

Can you please investigate further.

Many thanks,

Patrick

Expert:  Sam replied 1 year ago.
Hi
I know you are paid by the UK company or domicile but you are resident!
However regardless of residence status you are employed by the Irish company who are affiliated with the UK company - so the Irish company take care of all aspects of your employment (which I did advise upon with my part of my response stating
Even if you were paid from the UK you would still have this charge arising from the UK perspective of Part 3 Chapters 2 to 11 Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003).
In Ireland section 6 of the Finance Act, 2003 and Sections 16 to 21 of the Social Welfare (Miscellaneous Provisions) Act, 2003)
But you then state the car is NOT used for private use, so please advise what happens with the car after the end of the working day. (And I also asked The only point I will pick up on is the fact you mention its a pool car - so do other employees have use of this, or have you been using it exclusively,
and do you have private use of this vehicle OR is it returned back to the employment base - each evening) So please expand on what your interpretation of no private use has -as this may not tie in with HMRCs interpretation.
Thanks
Sam
Customer: replied 1 year ago.

Hi Sam.

The car is used to get me to work daily and to get me to the airport when I fly back every weekend.Other employees can have use of the car if they need it.

You have referenced... In Ireland section 6 of the Finance Act, 2003 and Sections 16 to 21 of the Social Welfare (Miscellaneous Provisions) Act, 2003

Have you looked at section 10 ?

Company Car not available for full year

Adjustments will be necessary where a car is not available for the full year, e.g. where -



  • an employee receives a car after the start of the tax year, or

  • an employee gives up a car before the end of the tax year.


Equally an adjustment will be required where a car is for some other reason not available for private use for part of the tax year, for example, where an employee is working abroad for an extended period. In this case, a car provided to an employee will not be regarded as available for private use for that part of the year in which the employee is outside the State for the purpose of performing the duties of the office or employment, provided the following conditions are met:



  • The employee travels abroad without the car

  • The car is not available for use by the employee's family or household during the employee's period of absence outside the State


Where a car is not available for part of a year, the business kilometric thresholds and the percentage cash equivalents used should be calculated by reference to the following fraction of the normal thresholds and percentages (as listed in the Table in section Calculation of "cash equivalent"). The fraction is
(number of days in the tax year car is available for private use) / 365

This fraction may also be expressed as a percentage as follows:
(number of days in the tax year car is available for private use) x 100) / 365

The section that is revelant to me is



  • The employee travels abroad without the car

  • The car is not available for use by the employee's family or household during the employee's period of absence outside the State


Many thanks,

Patrick

Expert:  Sam replied 1 year ago.
Hi
Then you do have private use of the car as you use to to get to work daily and to the airport (this is deemed to be private use)
Yes I have seen section 10 and I advised that this was not relevant to you - as I stated
"First the link you provide has no bearing on your situation as it merely relates to what adjustments would be needed if a company car is available for less than a full tax year, and any deductions your employer is making can only be as a result of HMRC instructing these deductions and they will make the adjustment when the company car ceases to be used by you.
So the charge being made is at this time taking into account the use of the car from when this transfer to the UK began (and you first took the car on) and making sure correct deductions are made from now until such time you no longer have use of the car."
I am afraid the charge made on you IS correct - as stated in my original answer.
Thanks
Sam
Customer: replied 1 year ago.

Hi Sam,

I didnt mention this to you in the original mail and i dont think you are aware so my appolgies for not making this fact known to you.

I am only here working in the UK from the 3rd week of Jan 2015 to mid december of this year so less than 1 year which is why I feel section 10 is relavant to me.

Your thoughts please.

Many thanks,

Patrick

Expert:  Sam replied 1 year ago.
Hi
Thanks for your response
The availability of the car spans over 2 tax years (from Jan 2015 to 05/04/2015 and then from 06/04/2015 until this time in the UK ends.
Then its not so much that the car is unavailable for use fo less than a full tax year (although this does apply for both years) its when the car is not available (when said employment continues and the right to have a company car continues) due to sick leave. maternity leave, or due to the car not working etc - so you are misinterpreting the legislation and this DOES NOT apply to your situation.
I worked for HMRC for 26 years and am now a practicing accountant with my own business - and I promise you, if this legislation had ANY bearing to you - then I would advise so.
Therefore the charges for the company car ARE CORRECT and your employer is right.
Please advise if I can be of any furtehr assistance, and it would then be appreciated if you could rate the level of service I have provided (rather than it not being the answer you wanted) as this ensures that Just Answer credit me for my time
Thanks
Sam
Customer: replied 1 year ago.

Hi Sam,

I have been speakng with Irish Revenue and they do not agree with you that I should have to pay any BIK on the grounds all my mileage in the UK is business mileage. I only pay BIK on personal use of a company vehicle not on business mileage. I can only have one home at any one time and that is in Ireland. I was sent abroad on company business so no private mileage is being incurred it is all business related i.e. I did not go to the UK for personal reasons I went for work reasons at the request of my employer.

They are looking at getting me a ruling on this an I am expecting an update later this afternoon.

I am leaving this conversation open with you until then if that is okay.

Many thanks,

Patrick

Expert:  Sam replied 1 year ago.
Hi
You DO undertake private mileage - travel from where you stay to the place of work IS private mileage and so is the travel you make to the airport - the fact that you agreed to go to the UK at the request of your employer has no bearing.
See link here as to what constitutes private mileage from HMRC
https://www.gov.uk/tax-company-benefits/tax-on-company-cars
and what constitutes private mileage from the Irish tax regime
http://www.revenue.ie/en/tax/it/leaflets/it51.html
Whether this is scope to argue a temporary workplace remains to be seen, but other than the short period of time due to this relocation there is no indication that this applies. Do you go back to Ireland each weekend? Or work and live in the UK most of the time (during the period so far) Will you actually return to Ireland after this 11 month duration or might this be extended.
Perhaps you could explain what the reason for the transfer was and how your employer in Ireland approached you to consider
Do you stay in a hotel or are you in rented accommodation - please advise further and I would be more than happy to reconsider the matter
But your question argued a legislation that has no bearing on your situation and its on that basis I have responded.
Thanks
Sam
Customer: replied 1 year ago.

Hi Sam,

I travel home every weekend. I have rented accomadation paid by the company. The company in Ireland is part of a corporation. I was asked to travel to a sister plant to help impliment a project I had put in place in Ireland and then return to my job in Westport. I am in the UK on work not personal terms so private milage is not part of the car here in the UK. I am returning to my Job in Ireland in December.

We will pick this up on Monday ans getting the late flight home.

Regards,

Patrick

Expert:  Sam replied 1 year ago.
Hi
Thanks
Sam
Customer: replied 1 year ago.

Hi Sam,

Irish Revenue have come back saying I should not be charged BIK.

Please see below....

From: Revenue BMW Sligo PAYE [mailto***@******.***]
Sent: 29 July 2015 16:38
To: Doran, Patrick
Subject: FW: Employee Taxation query/PAYE/IC/AH (Ref:15650999)

Patrick,

I refer to our telephone conversation earlier. I realise now that the query submitted by your employer is different to your issue re BIK, see their e mail hereunder.

In relation to Benefit in Kind from 01/01/2004 it is up to the employer to determine if an actual benefit arises and if so there is a charge to PAYE/PRSI & USC here in Ireland, see link to the Employers Guide http://www.revenue.ie/en/tax/it/leaflets/benefit-in-kind/index.html. I note that the UK employer is processing the payroll from 6th April 2015 so I don’t know the procedure for BIK in the UK is.

As explained to you already there cannot be a charge if a there’s no benefit.

Regards

Mary Quinn

From: Navin-Mealey, Mona
Sent: 11 June 2015 11:02
To: '*****@******.***'
Cc: Costello, Angela; *****, *****
Subject: Employee Taxation query

Good morning

I am writing on behalf of an employee. I called your offices and they requested I put my query by email to yourselves.

Employer Name: MPS Westport Limited

Employer Number:(###) ###-####

Employee Name: Patrick Doran

Employee PPS number:(###) ###-####

Patrick is employed by Mps Westport Limited but in January 2015 he transferred to work for our sister site in the UK for a period of 6 months. He has continued to be paid by Westport during this time.

A decision has now been taken to extend his secondment period in the UK and as he will now go beyond the 183 days in the UK.

The UK have taken tax advice and they will now process his payroll (notionally) with effect from 6 April 2015 and pay UK tax on his behalf. Westport will continue to pay Patrick as normal and deduct all relevant taxes, USC, and NI here in Ireland.

The UK have been advised that they will require an E101 completed to allow them to NOT deduct National Insurance (both ER and EE).

Patrick will then need to complete a self assessment taxation form and claim back the excess taxation paid in the UK at the end of the Irish tax year.

Can you please advise the following:



  • In accordance with Irish taxation rules – is the above treatment correct?

  • I cannot locate an E101 form. Can you please advise if this is the correct form and where I may locate it?

  • Do we need to complete any additional documentation?

  • Are there tax credits that Patrick should be aware of that cover the UK tax payment?


If you require any further information in order to answer this query please do not hesitate to contact me. My contact details are set out below.

Kind regards

Mona

Mona Navin-Mealey

Finance Manager


















Phone:



+353 (0) 98 55836



Mobile:



+353 (0) 87 (###) ###-####/p>


Address:



Golf Road, Westport, Co. Mayo, Ireland



www.multipkg.com

Expert:  Sam replied 1 year ago.
Hi
Thanks for your response
But as already explained you DO have a benefit arising as your vehicle is sued for travel OTHER than for business
1) From place of stay to work
2) From work/place to stay to airport
This is NON business use.
You have already been advised
In relation to Benefit in Kind from 01/01/2004 it is up to the employer to determine if an actual benefit arises and if so there is a charge to PAYE/PRSI & USC here in Ireland, see link to the Employers Guide http://www.revenue.ie/en/tax/it/leaflets/benefit-in-kind/index.html. I note that the UK employer is processing the payroll from 6th April 2015 so I don’t know the procedure for BIK in the UK is.
As explained to you already there cannot be a charge if a there’s no benefit. (And I advise you there IS a benefit)
And to further support this you in fact with stay in the UK beyond 183 days and the UK is processing your payroll from 06/04/2015 (as per your employer querying directly with HMRC and as your Irish employer HAVE been charging you BIK, I can only assume then they have been advised it is correct to do so)
My answer still stands for the reasons given -
Thanks
Sam
Customer: replied 1 year ago.

HI Sam,

If the company are going to deduct the BIK then I can submit a Tax Return in Ireland next January for 2015 and on the Form there is a box titled 'Expression of Doubt'

This means there is no messing with the company however there is a cash flow inconvenience for me until then.

There is a Double Taxation Agreement between Ireland and UK and it essentially means I cannot be taxed twice so if you suffer any UK Tax NI again this should be reclaimable

My line of argument which the Tax Office agreed with is that all my mileage in the UK is business mileage. You only pay BIK on personal use of a company vehicle not on business mileage. I can only have one home at any one time and mine is in Ireland. I was sent abroad on company business so no private mileage is being incurred it is all business related i.e. I did not go to the UK for personal reasons you went for work reasons at the request of my employer.

Regards,

Patrick

Expert:  Sam replied 1 year ago.
Hi
I can only advise you the tax legislation, and I do not agree with your argument - but its you absolute right to challenge it with the tax office in Ireland.
YOU DO have personal use of the vehicle, travel to and from work in this instance IS NOT business mileage nor is the trip to and from the airport - I appreciate you relocated to UK as a temporary measure
I can only advise you on the UK tax position, which is where you are relocated to, from whom had provided the car, their report to your Irish employer, and their treatment of the car being made available.
I have advised why your link is not relevant and provided you with a links that are relevant, and agree your only option now is to challenge this with the Irish tax office, who you advise will still be responsible for your overall tax position due to residency.
I wish you luck with this
Thanks
Sam

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