Round Sum Subsistence Payments

[spiceygal69]

What would be a reasonable and acceptable sum to pay a group of engineers who work away from the main office most days, including nights away?

I need to pay them a daily rate and also a nightly rate for when they stay away. Their hotels are paid for by the Company.

I do not wish the amounts to attract tax and ni, or create possible problems with the Inland Revenue

[King_Maker]

I would contact your Tax Office and obtain written Dispensation for the relevant amounts.

[amccann@dtegroup.com]

If the amount you wish to pay is reasonable then a dispensation is the correct route.You will be expected to maintain records to prevent false claims by the engineers.
If you require any assistance call me on 0161 767 1291
Alan McCann CTA ATT
Director of Taxation
DTE Taxation Sevices

[CDavey9501@aol.com]

There is also also the working rule agreement (WRA) which may apply. Look at the HMRC website I think there is info on this.

[spiceygal69]

We are only talking about £6.00 as a daily allowance - would receipts have to be obtained?

[CDavey9501@aol.com]

This could amount to £6 per day x 5 days x 48wks @ 40% = £576 tax per employee. Look at my earlier post as it may help.

[amccann@dtegroup.com]

Receipts is not the issue.Note what CDavey advises.Are the expenses reasonable will be the underlying issue with HMRC

[Lambs]

S,

Whilst what my colleagues have advised is spot on, the amount you suggested is sufficiently low that you might 'benefit' from a look at the following on the HMRC website:

http://www.hmrc.gov.uk/manuals/eimanual/EIM02710.htm

(NB overnight expenses only).

Something to tide you over until your dispensation is agreed.

Regards,

Lambs

[spiceygal69]

Thanks for the advice so far. You have been really helpful. Are you able to direct me to the HMRC site page that sets out the permitted daily allowances for engineers working away from the offce on a daily basis, but not necessarily overnight?
Whatever we decide to do, I will be speaking directly to the IR to make them aware of what we are doing. I would hate to have any problems with them in the event of an inspection of our Payroll records

[King_Maker]

"This could amount to £6 per day x 5 days x 48wks @ 40% = £576 tax per employee. Look at my earlier post as it may help." - C Davey.

This is a very important, and often overlooked point.

It is the responsibility of the employer to operate PAYE & NI correctly.

A routine PAYE inspection of a restaurant business showed that waiters/waitresses tips had not been accounted for correctly. The owner, an aquaintance of mine was not initially worried. However, the Inland Revenue (as it then was) went back over 6 years, added Interest and Penaltiies. The total liability, IIRC, was over £250,000 and bankrupted the owner.

From little acorns do huge liabilites grow (to mis-quote Anon).