Tax charged on relocation expenses

[rfisher]

MODS - Please leave in finance as this is a tax question. Ta.

Relocated for work a while back.

The house purchase was delayed due to my partner's job transfer to our new location taking much longer than anticipated (employers delay, not ours).

This meant that I commuted for a period of around 2 years after being appointed to my new post.

Agreement was reached with the employer that I could claim relocation expenses beyond the 18 months that's usually allowed as the delay in relocating was not our fault.

I've now been taxed at 40% on the claim.

Do I stand any chance whatsoever of being able to persuade the tax people not to charge me for these expenses?

One for Eric perhasps.

[Eric Mc]

There used to be a general exemption from a tax charge if the Relocation Costs did not exceed £8,000. As ever, the details as to WHAT expenses can be included in the £8,000 allowable amount can be quite complicated.

[rfisher]

That is still the case but there is an 18 month time limit when the claim can be made from the time of appointment, after which tax is payable.

Just wondered if ther is any flexibility in that rule for unforseen or exceptional cercumstances.

Also, who makes that decision - the employer's payroll office or the local tax office?

[LC23]

The expenses must be incurred or benefit provided either in the tax year of the change of circumstances (starting the new job in your case) or the following tax year. Anything outside this does not qualify. The employer could try writing to HMRC to explain any extenuating circumstances but I doubt they would have any joy. They could pay the tax on your behalf but they would have to gross this up (also taking into account your employee NIC on the gross up).