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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I recently had a charge benefit because my

Resolved Question:

I recently had a charge for 7k for Child benefit because my wage on my P60 for the last 3 years was over the 50k limit. I actually earned 51k a year and then take off pension, company car and medical insurance but because I lived away my company paid £1050 a month for living expenses which pushed me over the 60k mark. Should this be possible? Is the money the company has paid to live away an expense or is this a company tax fiddle that shows the amount added onto my P60?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. Was the £1,050 per month paid though the payroll? What was it spent on? Can you elaborate on your period of living away from home? How long was that for?
Customer: replied 1 year ago.

The £1050 was paid through payroll. I was working in Portsmouth for 3 years when I actually have a house and live in Chepstow so the company said to sign up to their TAP (temporary assignment plan) instead of staying in hotels during the week which costs them to much. So I spent the extra money on a flat in Southsea £495 a month and living expenses so TV, Council Tax, Internet, TV lIcense, Electric etc. ( There was always a little more than needed but not much).

Expert:  TonyTax replied 1 year ago.
Thanks.

Leave this with me while I draft my answer. It will take a while so please bear with me.
Expert:  TonyTax replied 1 year ago.
Hi again.

Can you tell me if you moved to Portemouth because

i) that was where the job was or

ii) you started out with this employer in Chepstow but were re-assigned to work at their Portsmouth base.

If the answer is ii), did you know at the outset that you would be there for longer than two years or was it indefinite?
Customer: replied 1 year ago.

I live in Chepstow and my companies base office is Bristol. I was assigned a project in Portsmouth at a clients site for what was originally going to be a year. This got extended and extended as time went on.

Expert:  TonyTax replied 1 year ago.
Thanks.
Expert:  TonyTax replied 1 year ago.

Hi.

Employment benefits are included in the calculation of adjusted net income for the purposes of the child benefit tax charge. You can deduct pension contributions. Take a look here for the calculation criteria.

If an employee is sent to work in a temporary workplace for up to two years, then it is possible for the employee to claim tax relief for the expenses incurred in travelling to that workplace or for accommodation costs. This type of claim is straightforward where the expense is incurred by the employer who obtains a dispensation from HMRC. As soon as it is know that the relocation will last longer than two years, then tax relief is no longer available.

As you will read here, it might have been possible to claim tax relief for the accommodation cost you incurred which would have the effect of reducing your income for the purposes of the child benefit tax charge. See the examples in EIM31838 here.

I suggest you make a claim for overpayment relief which you can read about here by writing to the tax office. I'm not saying that such a claim will work but it's a case of nothing ventured, nothing gained. You didn't say whether you completed tax returns for the last three years but that's where you should have claimed tax relief.

I hope this helps but let me know if you have any further questions.

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15835
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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