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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 32086
Experience:  Over 5 years in practice
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I started work with my employer in September 1998 as a Junior

Customer Question

I started work with my employer in September 1998 as a Junior Project Engineer with a brief letter of employment setting out holiday entitlement (20 days + bank holidays), salary and terms of an interest free loan to pay for a rail season ticket.
Over the course of the term of my employment, I have received various promotions, salary increases and a single bonus payment. Our standard letter of employment to new starters varied throughout my career with the Company and increased standard holiday entitlement from 20 days to 20 days plus a further day per annum after 3 years service upto a maximum of 30 days, at some point this changed again to a total of 25 basic days. During my employment and at various stages I have disucssed with the MD holiday entitlement and been verbally told I can adopt the new procedure which I did and have been taking 30 days plus bank holdiays since 2011, increasing from 20 by 1 day per year from 2002.
During my earlier career I obtained a Company Car for 3 years, after this period choosing to purchase and utilise my own car, claiming expenses etc.
During my employment I have moved from Ingatestone, Essex to Marks Tey, Colchester and then subsequently in 2006 to Stowmarket, Suffolk (progressively further away from London).
When i initially joined the Company they had a single office located at Slough, and I believe my letter of employment stated I would be based at various UK site locations but I can check this. Subsequently they opened an office in Loughton Essex where i was based and used to drive to. Eventually they opened an office in Bishopsgate London as 98% of our work was within London. I used to drive to Loughton and then use the underground into London. It quickly became clear that travelling from Colchester directly to London on the train was quicker than driving, parking and then commuting. Eventually I stopped driving altogether and used the train only. The Company begain paying my travel costs in full.
Since at least 2005/2006 the Company has been paying my full travel expenses from home/office and home/site irrelevant of where I was living.
The Company has recently been investigated by HMRC who have apparently advised that the system of our travel expenses is incorrect and that the home/office is a benefit in kind and taxable. The Company has been fined and ordered to correct this issue.
For the past three/four years I have purchased an annual season (Gold Card) using my Company Credit card as the annual card is cheaper for the business, its approx £6,000.00 per annum.
Because of the tax issues now, they have been contacting staff and advising that things need to change and that people will receive an increase in salary equivalent to travel costs instead of us claiming our expenses, and therefore we will then pay tax on the amount. I was recently asked these questions, and advised the business that a Season Direct monthly ticket from home to the office (now at Old Street, London) is £667.00 per month. I put this in writing, and also explained that after 15 years of loyal service that I would rather get the equivalent of £1,113.00 per month as the new regime would leave me circa £3,000.00 out of pocket annually which is effectively a pay cut.
Yesterday I was called to see the MD who advised it wasnt negotiable, that i had been named personally by HMRC because of my 'excessive' travel costs, and that it wasnt the responsibility of the business to pay because I decided to live in Suffolk and that as far as he was concerned they should only pay the equivalent of the travel costs to Ingatestone where I lived when i was initially employed. He stated that a figure had been calculated for my travel costs of £2,700.00 per annum (£225 a month before tax), which would leave me paying travel costs of £667 less the £135 (£225 after tax) at £532.00 a month - simply I can't afford this and it makes my employment unviable?
Whilst I understand the tax reasons for the changes being made, and there is nothing contractual about the vast majority of the arrnagements I have with the Company I feel something is not being done correctly or fairly. Apparently I am the only one who has complained, I know its not the case. I also know that a colleague had his salary increased by the cost of his equivalent 'weekly' tickets costs - i.e. this puts more on his salary that the equivalent monthly cost would have done.
Is there a solution?
Submitted: 3 years ago.
Category: Law
Expert:  Sam replied 3 years ago.

As this is not a tax issue but an employment law issue, I have asked that this question be transferred to that category.


Customer: replied 3 years ago.
Relist: Inaccurate answer.
The question raised was about Employment Law, it has been received, and not answered by someone who could not answer the question.