AIBU to think it's terrible I'm paying tax/NI on this?

[BetterCallMum]

I drive around as part of my job. Sometimes I need to stay overnight.

Each month, I submit my petrol and accommodation expenses. I get these reimbursed along with my wage the following month.

Although this 'extra money' shows up on my pay slip as mileage or other expenses, the money is then combined with my standard monthly wage. I then pay tax and NI on the whole amount instead of just my wages.

So, let me get this right, i pay for the petrol/hotel costs out of last month's wages (which I've already paid tax on), get this reimbursed the next month only to pay tax and NI on it all over again!

Initially, I was under the impression that I could file a self assessment at the end of the year and claim tax relief on this, however, I looked into it last night on HMRC and I can't claim it back because my employer has already reimbursed me for these costs??

I get on average an extra £250 a month (expenses), not enough to move me up a tax band however it does increase my NI each month.

Does this seem right?

OP I'm public sector and whilst I currently get expenses separately because I'm seconded to a different department who cover them, before they were on the same pay slip, I queried it with HMRC who asked me some questions about the payslip and told me they were categorised on my payslips as non taxable, so my deductions were only bring taken from my salary and wage enhancements/overtime not my expenses . Worth checking out though

Are you sure you're taxed on them? I'm also public sector but I cleanses paid separately, but DH has his paid and shown on pay slip, but if you do the calculations it is not part of taxable pay.

But definitely something to check out with payroll.

It sounds as though it is the car rate in which case they’re correct. Anything above the 45p a mile isn’t expenses so will be taxed.

My partner's employers don't seem to understand that 30 minutes is not the same as 0.3 of an hour. Hence he (and all his colleagues) get underpaid every time they work overtime that isn't an exact number of hours. An extra 45 mins work will be paid as 0.45 hours, which is obviously only about 25 mins. No one seems to want to question it.

Thanks again.

Yes, i'm fairl sure i am being taxed on this because my tax and NI change each month despite my basic monthly salary being the same at £1495.

On my personal tax account on HMRC it says that my total taxable income is e.g. £1700 for June even though my June payslip shows my wage as being 1495 but the mileage brings it up to 1700.

oldsock that made me think of this

Why don’t you actually ring the tax office help line first . Just because your pay is varied does not mean it is incorrect . You need someone to check your tax code and work out exactly what you are paying tax and NI on as it could be the excess mileage . The tax office are normally very helpful .

Also there is a website that.
Checks your take home pay so you enter your tax code etc then you would be able to tell how much extra tax and NI you are paying over what you should be .

I'm just confused why my colleagues have simply accepted this and it's taken me the newbie to realise it sounds fishy.

You would be amazed at the amount of people who don't know their rights as employees & just accept that their employers are right about this kind of stuff.

Definitely speak to payroll tomorrow & get this sorted out.

I'm not sure what they'll be able to see though, Susie.

Going by the HMRC website, they've combined my wage and all of my mileage (not just the amount over 45p) and called it my taxable income for each month. So I've just assumed that I'm paying tax on the entire mileage.

I'm not sure why my tax and NI would vary each month when I'm paid the same wage each month?

There is an oddity with nhs expenses I think. I’m civil service and we can claim 45p a mile I think ( and an extra penny if there’sa passenger) but my public sector colleagues get a higher rate because it’s taxable. I don5 drive but have to sign off staff claims and have queried the difference before and this was the explanation.

Seems daft tho.

I would ring HMRC. They are usually very helpful. NHS payroll have been less than useless when dealing with queries I've had. Hope you get sorted. You're right to check everything out. I've worked with a few colleagues who had no idea their pay wasn't correct and never thought to question it.

I'm not sure why my tax and NI would vary each month when I'm paid the same wage each month?

Because the milage you do (and therefore the bits above the 45p) varies?

It would be far better if your employer gave you a credit card so you never had to spend your own money, but this may not be possible in the public sector.

They sound pretty incompetent. I've never heard of expenses being listed on a pay slip before.

Agree with others. Expenses shouldn’t be taxed. I frequently incur expenses in the 000’s as part of my role and this is always paid back to me before tax.

As an idea, could you ask for a corporate card that the company pays directly?

That is so wrong!
I've worked for HMRC and DWP and I was never taxed on my expenses. Infact, expenses are never paid along with salary. It is usually a separate payment and definitely untaxed so never on my payslip.

The problem I see here for you from what you and other posters have said, this is the way the NHS does it so they wont change it for you just for asking nicely.

I say speak to them today, if you get no joy, ask HMRC how you can claim it back and then speak to your union about having this changed.

I would be livid if my expenses were taxed. I'd demand cash for everything! -_-

Do you claim more than 45p per mile? Or 25p once over 10,00 miles? If so you will be taxed on the difference, as those are the approved HMRC rates and anything more is deemed taxable

OP it's this. You are entitled to be reimbursed your expenses up to the 45p and 25p limit. If you're being paid an inflated rate of 67p (or any other rate) then yes you will pay tax on the excess. You're actually still better off.

It’s worth remembering that apart from admin time this isn’t going to cost your employer (not for this year anyway) they just pay less to HMRC and more to you. It’s the sort of thing that should be sortable in the next months payslip.

Years ago (and I mean years since I've seen it) some employers paid a higher rate of mileage and were effectively 'net to gross'ing up the mileage.

So employees received 45ppm after tax and NI.

This means the employer doesn't have the administrative burden of accurately recording and keeping all receipts for 3 years etc. Means the employer receives roughly the same, but costs the employer way more in wages if lots of expenses are claimed.

It's cost ineffective, and why it's not done anymore...tbh can totally see it still being a thing in the NHS if 67ppm is usual for mileage

You wouldn’t be better off using a company credit card as you’d be missing out on the (albeit taxed) inflated milage rate.

employee receives the same

Company credit cards rarely an option in the public sector. The DM uses the freedom of information act to get the bills and then writes pieces about their interpretation of frivalous spending by 'lazy civil servants' if people stay in hotels and eat in restaurants when travelling on business. Because we should take pack up and sleep in our cars, obviously.

Would be a good idea for hotels and meals, and fuel for anyone with a company car, but as most people are entitled to 45 ppm for using their own car, it's standard to claim this as a mileage rate anyway.

We've had a number of systems over the years, both within and separate to payroll. Currently it's separate and actually quite efficient, if a little clunky.

When it's been in payroll, it's never been taxed (obviously - either the OP is being paid more than 45 ppm and then being taxed on it, or it's on the payroll, but not taxed, maybe try looking at www.listentotaxman.com to work out what tax you should be paying OP, see if that helps) but the problem with including it in payroll is that if you miss the cut off, which can be very early in the month, it can be ages before the money is reimbursed, which can cause difficulties for anyone who doesn't have a credit card they can use.

The tax office would be able to see what’s going on straight away by seeing a couple of payslips . It may be that you have to reclaim some of the tax back ( my daughter had to do this on her mileage ) they would tell you immediately whether it’s correct or not .

I

Hi all - just thought I'd update. Thanks again for all of your help with this. I'm afraid I need to ask for some more!

I have managed to print off my expenses claims and wage slips since April of this year. It appears to me as though I am being taxed on ALL mileage and not just that above the threshold. I have also received expenses for accommodation and meals and I appear to have been taxed on this, also.

Finding it really difficult to get through to HMRC on my lunchbreaks but they're open tomorrow so will call then.

Not quite sure how to challenge this with Payroll. I'm still not entirely sure if they're in the wrong!

The whole thing seems wrong.

I have always worked in the private sector, but we don't have separate tax rules.

If your travel is incurred in performance of your duties it is not taxable, provided it is paid at the appropriate rates for the mileage.

Accommodation (hotels etc) also generally not taxable.

The NHS is the biggest employer in the country, they really shouldn't be fxxxxing this sort of thing up?

Ask payroll to explain - and keep escalating till they do. That is what they are for.