really boring tax question … living allowance.

I work away quite often for 1day – 7 weeks at a time.

during such time i receive a per diem for food and expenses – this is itemised on my wage slip as “living allowance” and it is subject to tax and NI – ive checked the wage slip math it is being taxed at full rate.

its a flat rate 50 dollars

Payrolls line is the companies done its part and that i should the tax relief via https://www.gov.uk/government/publications/income-tax-tax-relief-for-expenses-of-employment-p87

Is it simply a case of filling in the general expenses section with the end of year value for living allowance ? seems a bit simple – not like HMRC at all … and more so is this a legitimate claim ?

We get ours paid gross and no tax is paid on it.

We don’t get $50 though, more like £15. Not sure what the HMRC limit is, but I’d guess you should be able to claim the tax back on it.

On the P87 you claim for the total cost of the work related expenses less what you have been reimbursed. IN your case the net amount you receive is what is deducted from the total cost

yeah in which case its not happening .

Im not sure they will accept a post it note in russian in turkmen manat as proof of what i spent.

after several years of arguing the toss with HRMC over work related expenses and them repeatedly trying to tax me on an extra £10k/yr of what they see as ‘income’, I’m now on self-assessment.

I now put exactly the same numbers into the online portal and its acccepted without question.

Ours is a net allowance, they pay the tax necessary to get you the agreed amount after tax.

My previous company used to per £30 a day per diem and it was claimed/paid through expenses so not taxed or NI’d. They had agreed an exemption for this with HMRC so no receipts were needed.

used to be the case with us bensales

thats why im miffed at the fact im left with near 20 quid to eat and the junior engineer has nearer 30

Its there for the same purpose , its not a wage suppliment It costs a fair chunk of change to eat 3 meals when you never have kitchen facilities

Jambo , are you saying that when you went self assessment they accepted your living allowance/expenses claim ?

I do a few trips a year and it amounts to 5-600 quid a year in tax paid.

thats why im miffed at the fact im left with near 20 quid to eat and the junior engineer has nearer 30

Can you not switch to just expensing everything with receipts? Then you could get everything reimbursed fully apart from lunch.

Jambo , are you saying that when you went self assessment they accepted your living allowance/expenses claim ?

not living allowance it was actuals + some entertaining on a mix of Corporate CC and cash reimbursements, but they seemed to struggle with that despite my P11D being filled out correctly and on time. generally amounts to 10K a year depending on how much I travel.

been plugging exact same numbers off my P11D & P60 into self-assessment for the last couple of years and been accepted without question.

“Can you not switch to just expensing everything with receipts? “

I do this where possible…. some regions – ususally the sodding expensive ones dont allow it …. you try eating 3 meals a day in perth, australia or Port harcourt, nigeria on 50 dollars a day without cooking facilities.

the figures i quote above are taking into account where i can do full expenses.

sounds like i need to phone the HMRC and get it from the horses mouth. dont want to blindly put the p87 in and get a full scale investigation lauched – even as PAYE they never seem to end well 😀

you try eating 3 meals a day in perth, australia or Port harcourt, nigeria on 50 dollars a day without cooking facilities

Just take a few kilos of this stuff in your luggage. Yum

As craigxxl advises:
On the P87 you claim for the total cost of the work related expenses less what you have been reimbursed.
In your case the net amount you receive is what is deducted from the total cost.

But instead of the actual cost of your “work related expenses”, I suggest you use the Revenue’s own Worldwide Subsistence Rates. That’ll be relatively quick and easy, you just need the number of days spent in each country.

HMRC really don’t want to wade through a heap of scruffy post-it notes.

Can you not switch to just expensing everything with receipts?

Try getting a receipt from a street vendor in Lagos / Port Harcourt / Accra, they’re completely illiterate (but cook fine).

Esme, not come across benchmark rates for outside UK before so will keep that for future reference. Cheers.

Id seen them but also read guidance that i couldnt claim the relief on the difference between the 2 🙁

Okay, I presume you are referring to this guidance?
“it will limit the deductions to the amounts that an employer is prepared to pay.”

So use the gross allowance in place of actual expenditure, then deduct the net amount received, and claim the difference.

How long have you worked in this job? Because you can also claim for earlier years.

cheers esme , no that is not the guidance i was referring too.

I feel like bernard black doing his tax return in blackbooks haha.

Ive worked here for 7 years …first 2 years were tax free per diem – of the same ammount then out of the blue i got taxed on it .. chunts.

So it’s worth initially claiming for 2014/15, and if that’s agreed, then submit claims for all the earlier years.

on it like a car bonnet.

So if i take my gross year to date , and gross year to date – minus the living allowance and put them into one of them new/old salary calcs for 14/15 – the difference in the tax payments would be my “claim” – the number certainly looks right.

showing/proving exactly when i was away isnt an issue. I keep all my old time sheets.

Good link.

tbh as a Contractor I’ve always put per diem’s through since I did a contract with Central Govt and found that they used them for staff even though my Accountants were advising us not to as HMRC don’t like them. #doublestandards

I since found that the NHS use an equivalent system.

Although looking at the rates on the link (for equivalent European countries) I think we need to up our per diems (for the UK) 🙂

they are not playing.

“no further action is required under the circumstances”