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bigduckontax, Accountant
Category: Tax
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I am a PAYE employee working away from home on a Home Office

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I am a PAYE employee working away from home on a Home Office Investigation. Due to the nature of the Investigation certain geographic restrictions for recruitment to the role were in place. this resulted in many of us working away from our home areas, Monday through Friday. Initially we were put up in hotels and provided with breakfast and an evening meal. No compensation for travel was paid. When realising the P11d issues, and implications which may have resulted in staff leaving their positions. It was arranged that we could source our own hotels, pay for them ourselves and claim reimbursement which was taxed at source. Also it was arranged we could claim up to £16 per evening meal and we would be paid £0.40 per mile round trip from home address to the location of the office being used. As far as I am aware no special dispensation was put in place.
Using a Tax Accountant Tax Returns were completed on our behalf for the last two years. That accountant would enter the total expenses claimed (hotel accommodation, evening meals and mileage) in box 17 of the Self assessment form, and did not include them in Total Earnings for the year. HMRC accepted the Tax Returns and raised no issues.
The expenses were claimed against receipts (except mileage which was calculated on AA/RAC Route Planner) weekly and reimbursed minus tax. The total reimbursed, less tax at source for me for 2014-2015 was £14500-00.
Due to unrelated issues with that Accountant, I employed the services of another Accountant, who adopts a different position as regard the expenses and insists they are to be classed as part of the total earnings.
This changes the whole situation and could result in an underpayment of a substantial amount. This is made worse as being a retired Police Officer I am in receipt of a pension.
My Pension for 2014 was £20200 and my salary (not including expenses total) was £40085.
It is necessary for me to stay in a hotel as the Office I work from is 160 miles from my home address. Otherwise I could not hold the position, bearing in mind at the time of recruitment certain geographic restrictions for employment were in place.
Is there any way that my situation could be looked upon more favourably by HMRC, as if not I will have to seriously consider resigning my position. There are many others in a similar position.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Let us get rid of the easy bit, the motor mileage. This is not taxable and you should demand the tax improperly deducted from the paying party. Furthermore this was at 40p per mile. The permitted reimbursement for this is 45p per mile so the additional 5p per mile may be claimed on your tax return as an expense in business. Remember that if your mileage exceeds 10000 miles in the year then the rate drops to 25p per mile. I also suggest that you employ an accountant with a greater knowledge of taxation than is currently being displayed. Taxation of travel and subsistence; I never heard such balderdash and piffle! As a PAYE employee you can only have one place of business and the travel and subsistence incurred in getting to any other place where your work takes you is not taxable by your employer unless the amounts paid exceed the following limits: 'Breakfast rate - £5 One meal (5 hour) rate = £5 Two meal (10 hour) rate * £10 Late evening meal rate - £15' These rates are extracted from the HMRC guidance on the subject contained in EIM05231. This advice furthermore that there is no limitation to reimbursement of accommodation costs. Such reimbursements are not subject to tax deductions and again the payer should be requested to refund the tax improperly deducted. Should they refuse then take out a summons in the Small Claims Court for recovery. Just about everything regarding travel and subsistence has been incorrectly processed through your tax returns. Someone will have to seek an adjustment to past returns to correct the position. I do hope that I have been able to shed some light on your position and indeed your colleagues also.
Customer: replied 2 years ago.
Hi Kieth thank you for your prompt reply, sorry to be a pain but these points are massively important to myself and colleagues.
The mileage we claim is travel from home address to one place of work and return at the end of the week.
The hotel accommodation allows us to live near to our place of work and the subsistence is a meal allowance.
An argument has been that all are a benefit in kind. We do pay tax at source on the reimbursement which we are happy to do but feel that such reimbursed expenses should not be classed as part of our total earnings. Do you know any HMRC reference we can quote to substantiate this.
Thank you
With respect this is not a benefit in kind, I never heard such rubbish as your employer is currently peddling. There is no strength to your employer's argument. Travel and subsistence can never be classed as part of your remuneration. There is no requirement to quote any HMRC guidance in this matter. It is normal tax and has been so for more years than I care to recall, at leash half a century when I first started work. EIM05231 makes the whole process clear. Please be so kind as to rate me before you leave the Just Answer site.
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Customer: replied 2 years ago.
Thank you very much indeed
Delighted to have been of assistance.
Thank you for your support.