Reply to: Update from my MSC

[tim123]

To be honest Tim I think you are complicating what is actually one of the simpler Tax Rules.

The IR online fact sheet says that if I use my private car for business then I can claim up to 10,000 miles a year at 40p a mile and only require to log the journey.

Full Stop - nothing more or less complicated. Why do you have a hang-up about this? I don't work for Giant. I am not an Employee of Giant. I think you're confused.

I have a hang up with your suggestion that Giant are doing something illegal by refusing to pay you these expenses as a tax free amount.

If these expenses are genuinely available to you as tax free payments then you can claim them through your tax return if Giant don't pay them to you.

OTOH, if these payments are not genuinely available as a tax free payment and Giant pay them to you anyway, it is your responsibility to declare them on your tax return.

It is not Giant who decide whether these payments should be tax free or not, it is you. But if the tax man disagrees, it is you who has to argue the case.

And you may not think that you are an employee of Giant, but ITYF that employment law says otherwise.

tim

[expat]

To be honest Tim I think you are complicating what is actually one of the simpler Tax Rules.

The IR online fact sheet says that if I use my private car for business then I can claim up to 10,000 miles a year at 40p a mile and only require to log the journey.

Full Stop - nothing more or less complicated. Why do you have a hang-up about this? I don't work for Giant. I am not an Employee of Giant. I think you're confused.

Then HMRC will allow you to claim that much against tax. What Giant may feel like paying you is nothing to do with that. That much is clear, I trust.

[malvolio]

What - and so my contract which was independently audited by an external company specialising in this are wrong instead of you!? Obviously you know it all - and as you say it's my problem not yours anyway. Is this what happens to people when your've exceeded your 24 months temporary status - you become obtuse and bitter. Hope I never get like that.

You may be too late...

Anyway, from April CB is right, if you are with an MSC the definition of a place of work changes so you would be just driving to work. Until then, you are right, it's a legitimate claim

As for Giant's rules, they are up to Giant and need not have any basis in reality. As you will discover if you get your own Ltd...

[Cowboy Bob]

What - and so my contract which was independently audited by an external company specialising in this are wrong instead of you!?

So why not ask them, instead of coming on here and acting like a knob?

[rawly]

OK, you're right, I'm wrong. It's your expenses that are going to come under investigation not mine...

What - and so my contract which was independently audited by an external company specialising in this are wrong instead of you!? Obviously you know it all - and as you say it's my problem not yours anyway. Is this what happens to people when your've exceeded your 24 months temporary status - you become obtuse and bitter. Hope I never get like that.

[Cowboy Bob]

Why are back to this issue again? Get over it! I am working within current legislation (till April anyway) which has deemed this as valid based on my current contractual status. This ISN'T the issue! Stay focussed on the issue.

OK, you're right, I'm wrong. It's your expenses that are going to come under investigation not mine...

[rawly]

Problem is you're not. Using your car to get to work and using your car for business are two completely different things.

Why are back to this issue again? Get over it! I am working within current legislation (till April anyway) which has deemed this as valid based on my current contractual status. This ISN'T the issue! Stay focussed on the issue.

[Cowboy Bob]

The IR online fact sheet says that if I use my private car for business

Problem is you're not. Using your car to get to work and using your car for business are two completely different things.

[rawly]

To be honest Tim I think you are complicating what is actually one of the simpler Tax Rules.

The IR online fact sheet says that if I use my private car for business then I can claim up to 10,000 miles a year at 40p a mile and only require to log the journey.

Full Stop - nothing more or less complicated. Why do you have a hang-up about this? I don't work for Giant. I am not an Employee of Giant. I think you're confused.

[tim123]

2) As to my car mileage. 40p at 32 miles is £12.80 a day - Giant have now stopped me claiming this as I don't fall within their 100 miles per £10 criteria. The problem is HMRC statute states I am fully entitled to claim the 40p - BUT this is NOT a Petrol rate - it is petrol/maintenance/wear and tear. You can't VAT bill something like that. This is why IR regualations clearly state I am only obliged to log my mileage in a log book. Giant have overidden this and in theory this could be deemed unlawful.

Utter tosh! What your employer (Giant) will let you claim for mileage is entirely up to them, they have no legal obligations to pay anything at all here.

The rules are simply ones that affect your tax liability for the amount that they do chose to pay. If they pay you the scale charge, there is no liability for income tax on that payment (provided that the mileage is genuinely claimable).

If they pay you more than this amount (which historically some employers do) or if you have more than one employer and they don't apportion the higher initial rate between them correctly, there is a liability to income tax that should be declared on your tax return.

OTOH if your employer pays you less than the scale charge, you are entitled to claim for the full amount on your tax form and claim a refund directly from HMIT.

tim

[Cowboy Bob]

Who said I haven't!

Fair enough, but you'll be amazed by the amount of people who haven't been keeping receipts...

[rawly]

You still need all the receipts though, under both the new policy and going back as long as you've been doing it...

Who said I haven't! I just said posting 60 of them to Giant every week will cost me more postage that the £30 I'm saving! You only need to present the receipts if being investigated.

How do you explain getting the reciepts for the 40p mileage rate which is not Petrol but Petrol/Maintenance/Wear and Tear and the IR do NOT require you to hold receipts for this - only that you have logged the journey?

You have to admit at the very least that the Car Mileage ruling is most strange?

[Cowboy Bob]

1) I am fully aware this is all being removed come April 2007 anyway - BUT I am currently legally fully within my rights being less than 24 months into a contract to claim travel and subsidence to a temporary workplace. This is not the issue - so get over it!

You still need all the receipts though, under both the new policy and going back as long as you've been doing it...

[rawly]

OK - I have some more clarification from Giant this morning.

The request is not from HMRC - it is purely what their external independent consultants recommended.

Some points from above:

1) I am fully aware this is all being removed come April 2007 anyway - BUT I am currently legally fully within my rights being less than 24 months into a contract to claim travel and subsidence to a temporary workplace. This is not the issue - so get over it!

2) As to my car mileage. 40p at 32 miles is £12.80 a day - Giant have now stopped me claiming this as I don't fall within their 100 miles per £10 criteria. The problem is HMRC statute states I am fully entitled to claim the 40p - BUT this is NOT a Petrol rate - it is petrol/maintenance/wear and tear. You can't VAT bill something like that. This is why IR regualations clearly state I am only obliged to log my mileage in a log book. Giant have overidden this and in theory this could be deemed unlawful.

As this is all ending in 3 month, however, there seems little point in pursuing this. Only Giant seem to have been very badly advised over the Car Mileage situation especially.

[monkeygeorge]

I don't see the problem with the pertol receipts (unless you use a hybrid). If you do the mileage you claim then you'll have the receipts. £10 per 100 miles is quite realistic at 30 mpg.

A lot of MSC haters are gloating about this but a lot of people using MSCs, like myself, would welcome a change that elliminates uncertainty and means that you claim expenses without having to worry about breaking the law. MSCs have been misleading people for years about subsitence claims (although if you ask them they will probably tell you that you do need to keep receipts). At least now it should be balck or white, as it should be.

The major change that looks like coming out from all of this is that you will no longer be able to receive dividends from MSCs.