Asking employer to pay for travel costs?
Discussion
Hi all,
Just a hypothetical, food for thought type question. Not found the right combination of words on google yet to get me an answer!
The train between where I am and London is around £9000 per year.
If an employee was to request £10k less in salary with a clause in the contract that would allow for upto £10k in travel expenses to be claimed per year, would this be even legal / doable? Dropping £10k in salary (well into the 40% bracket) but not paying for travel would increase takehome by around £400 in this scenario (ignoring pension contributions), and it would save the employer money in pensions and NICs.
Thoughts? Chances are I've oversimplified this and there's a bunch of stuff I haven't considered.
Just a hypothetical, food for thought type question. Not found the right combination of words on google yet to get me an answer!
The train between where I am and London is around £9000 per year.
If an employee was to request £10k less in salary with a clause in the contract that would allow for upto £10k in travel expenses to be claimed per year, would this be even legal / doable? Dropping £10k in salary (well into the 40% bracket) but not paying for travel would increase takehome by around £400 in this scenario (ignoring pension contributions), and it would save the employer money in pensions and NICs.
Thoughts? Chances are I've oversimplified this and there's a bunch of stuff I haven't considered.
Edited by artois7 on Sunday 5th January 19:54
artois7 said:
Soft Top said:
Nope. Travel to and from the usual place of work is not a travel expense. It would be taxable so you pay the same either way. Sorry!
If your place of work is your house and you travel to the office a couple times a week, does that change?https://www.moorestephens.co.uk/MediaLibsAndFiles/...
Sir Bagalot said:
I knew of a close family member that once worked for a financial advisers.
They could claim £1K pcm on expenses no receipts needed. Everyone knew it was a tax dodge.
The fun really started when redundancies happened.
£1k pcm EVERY month?They could claim £1K pcm on expenses no receipts needed. Everyone knew it was a tax dodge.
The fun really started when redundancies happened.
The only way they could claim it without receipts would be if it was mileage and (back of a fag packet) they’d need to be doing 600+ miles a week every week to be able to claim that. It seems a stupid way of giving them £1k tax free, it would have been far easier to just give them the money in cash.
Countdown said:
Sir Bagalot said:
I knew of a close family member that once worked for a financial advisers.
They could claim £1K pcm on expenses no receipts needed. Everyone knew it was a tax dodge.
The fun really started when redundancies happened.
£1k pcm EVERY month?They could claim £1K pcm on expenses no receipts needed. Everyone knew it was a tax dodge.
The fun really started when redundancies happened.
The only way they could claim it without receipts would be if it was mileage and (back of a fag packet) they’d need to be doing 600+ miles a week every week to be able to claim that. It seems a stupid way of giving them £1k tax free, it would have been far easier to just give them the money in cash.
Marcellus said:
The £1,000 doesn't have to be just travel, could be drinks, food, newspapers, parking etc etc..................... I used to be able to claim £50 a day when I was working in London, I was expected to have a car with me for work, parking on meters it all soon racks up!!
Yes, and you would have had legitimate receipts. Imagine the hassle of having to create fake receipts, all for multiple different expenses, different suppliers, fake VAT numbers just in case HMRC turned up.Your average taxi driver/builder/odd job man isnt creating a bundle of fake receipts to avoid tax. They could, but they don’t need to, its easier to just get paid cash in hand.
Countdown said:
Yes, and you would have had legitimate receipts. Imagine the hassle of having to create fake receipts, all for multiple different expenses, different suppliers, fake VAT numbers just in case HMRC turned up.
Your average taxi driver/builder/odd job man isn't creating a bundle of fake receipts to avoid tax. They could, but they don’t need to, its easier to just get paid cash in hand.
Sorry should have been clearer, when I was working in London I only needed to provide receipts if I went over the £50 on a day!Your average taxi driver/builder/odd job man isn't creating a bundle of fake receipts to avoid tax. They could, but they don’t need to, its easier to just get paid cash in hand.
OP, HMRC appear to have recently tried to clamp down on the contracted 'place of work' for employees to prevent such tax dodging via travel expenses.
There are a number of criteria they have published to define a legitimate 'home worker' for whom occasional travel to a work site can be expensed. One of the key things that HMRC try to insist is that workers cannot merely 'choose' to have a home office as their regular place of work; there has to be a legitimate business reason for them to be located away from the employer's site (e.g. a region specific job role), otherwise their contractual place of work should be the employer's site and travel expenses cannot be claimed.
I recently went through a saga at work when my employer tried to change my place of work....
There are a number of criteria they have published to define a legitimate 'home worker' for whom occasional travel to a work site can be expensed. One of the key things that HMRC try to insist is that workers cannot merely 'choose' to have a home office as their regular place of work; there has to be a legitimate business reason for them to be located away from the employer's site (e.g. a region specific job role), otherwise their contractual place of work should be the employer's site and travel expenses cannot be claimed.
I recently went through a saga at work when my employer tried to change my place of work....
Marcellus said:
Countdown said:
Yes, and you would have had legitimate receipts. Imagine the hassle of having to create fake receipts, all for multiple different expenses, different suppliers, fake VAT numbers just in case HMRC turned up.
Your average taxi driver/builder/odd job man isn't creating a bundle of fake receipts to avoid tax. They could, but they don’t need to, its easier to just get paid cash in hand.
Sorry should have been clearer, when I was working in London I only needed to provide receipts if I went over the £50 on a day!Your average taxi driver/builder/odd job man isn't creating a bundle of fake receipts to avoid tax. They could, but they don’t need to, its easier to just get paid cash in hand.
The situation you're describing is the same as Sir Bagalot - paying an Employee up to £1k a month "no questions asked". maybe I'm missing something but I cant see how that complies with HMRC rules....
Countdown said:
Marcellus said:
Countdown said:
Yes, and you would have had legitimate receipts. Imagine the hassle of having to create fake receipts, all for multiple different expenses, different suppliers, fake VAT numbers just in case HMRC turned up.
Your average taxi driver/builder/odd job man isn't creating a bundle of fake receipts to avoid tax. They could, but they don’t need to, its easier to just get paid cash in hand.
Sorry should have been clearer, when I was working in London I only needed to provide receipts if I went over the £50 on a day!Your average taxi driver/builder/odd job man isn't creating a bundle of fake receipts to avoid tax. They could, but they don’t need to, its easier to just get paid cash in hand.
The situation you're describing is the same as Sir Bagalot - paying an Employee up to £1k a month "no questions asked". maybe I'm missing something but I cant see how that complies with HMRC rules....
Not sure how the Company would cover it off with HMRC or if the rules have changed.
artois7 said:
Hi all,
Just a hypothetical, food for thought type question. Not found the right combination of words on google yet to get me an answer!
The train between where I am and London is around £9000 per year.
If an employee was to request £10k less in salary with a clause in the contract that would allow for upto £10k in travel expenses to be claimed per year, would this be even legal / doable? Dropping £10k in salary (well into the 40% bracket) but not paying for travel would increase takehome by around £400 in this scenario (ignoring pension contributions), and it would save the employer money in pensions and NICs.
Thoughts? Chances are I've oversimplified this and there's a bunch of stuff I haven't considered.
The answer is no for a whole host of reasons. But the company could offer interest free loans for season tickets - it what I used to offer.Just a hypothetical, food for thought type question. Not found the right combination of words on google yet to get me an answer!
The train between where I am and London is around £9000 per year.
If an employee was to request £10k less in salary with a clause in the contract that would allow for upto £10k in travel expenses to be claimed per year, would this be even legal / doable? Dropping £10k in salary (well into the 40% bracket) but not paying for travel would increase takehome by around £400 in this scenario (ignoring pension contributions), and it would save the employer money in pensions and NICs.
Thoughts? Chances are I've oversimplified this and there's a bunch of stuff I haven't considered.
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