I occasionally incur some expenses (normally travel) related to my work. This is a pretty straightforward process. e.g. if I pay £10 in petrol I put in my expenses claim I then take home £10 extra in my next pay packet.
Having reviewed my last three payslips my case worker has just sent me a letter demanding I make a payment of £50 within the next 14 days to cover my extra income over the past three months.
I have informed them that this 'extra' money is not extra money at all but merely a reimbursement of money I have already paid out. I can't get my head round the fact that if I incur work-related expenses I will be left out of pocket if I try to claim them back. Am I right?
I think, though I'm not sure, there are certain tax rules on what is classed and recorded as expenses - do you have to fill in an HMRC form declaring them as expenses or are they just treated as salary? If not, they may not class them as expenses (even though they are to you).
thanks - i'm on PAYE so I just fill in a form and the accounts dept do the rest I suppose. I get a letter at the end of each year spelling out my mileage and amount paid. For last year it was about £200 so it's not like I do that much and aside from that it clearly states on my payslip MILEAGE. I've been in my IVA for three years and this is the first time it's been brought up.
I think that's what I meant - I'm no expert (clearly!) so I'm sure someone who can help will come along in a bit - but it does sound odd that if you're having to spend out that money on work, then you have to give it up. Does it come out of your allowance? I guess if it doesn't, that might be where the issue lies.
Is car fuel one of your allowed expenditures? Assuming it is, then your IP may be taking the view that this has already been allowed for in your reasonable outgoings, and that any reimbursement from your employer is treated as extra income.
However, at the end of each financial Year, I believe you should get a P11D form from your employer, which will clearly itemise what you have received in mileage 'benefit'. HMRC's mileage allowance is 45p per business mile up to the first 10,000 miles, and 25p per mile thereafter.
If your employer has reimbursed you at less than the going rate, then you may be entitled to a tax refund (tax relief on your out-of-pocket expenses up to the going mileage rate). Conversely, if the benefit paid by your employer exceeds that amount, then you will be taxed on any profit over 45p/25p per mile.
Hope that makes sense.
If your employer is just adding £10 here and there to your pay, but not issuing a P11D, then even if it is itemised as 'mileage', this may be treated by HMRC and your IP merely as extra income.
My opinions are just that: Based on my experience and being a self-employed IVA customer.
Not right - if the reimbursement is for expenses incurred then the money is for you. Can you print off your expenses claim forms? Then you can send them to your IP to show how much is yours!
thanks for your replies - sorry should have made it clearer. Yes, I just get 45p a mile. I don't do an awful lot of business mileage. A couple of times in the past three years I have claimed for train fares and a couple of times for refreshments. I tend only to claim once every three months - partly because I don't have much to claim and partly because I'm a little bit lazy! As I say, last year the total amount was about £200. The expenses forms are just filled in by hand and passed over the accounts team - I don't have an electronic copy of them or photocopies.
I do a fair amount of mileage anyway as my round trip to/from work is 46miles a day and a live in a semi-rural area - I was grilled quite heavily on my last annual review because I asked for my monthly fuel allowance to go up by £10 (which I thought was a conservative estimate anyway)
Both my wife and I regularly have business expenses reimbursed through our pay. Our IP advised to deduct them from our take home pay before seeing if we owed anything extra to the iva.
Scoobydooby: Sounds like your IVA case worker is being quite harsh, over a relatively small amount of money. HMRC's rate is supposed to cover not just fuel, but wear 'n' tear etc.
I think you should stick to your guns and argue that this business mileage is over and above your routine expenditure, and that you are reimbursed at the approriate rate by your employer. You are not making a profit, and on that basis, your IVA payment should stay as it is.
Might be worth escalating this to your IP.
My opinions are just that: Based on my experience and being a self-employed IVA customer.
Your caseworker seems to have a problem reading a wage slip! If it says mileage it is an expense and not income and should be ignored. If your caseworker does not understand this demand to speak to the IP who hopefully does understand the difference between salary and expenses...
