Client has paid an employee £400 during the year for a repair to the employee's and another drivers cars for broken wingmirrors.
Employee and the other driver clashed mirrors on a narrow country lane, employee was required to drive down the lane to visit a farm to carry out the building survey.
Employer, my client, is arguing that the expense was a business one and not a benefit to the employee as he HAD to go down the "treacherous" country lane.
Part of me feels this should be allowable yes BUT feel it would proably be taxable on the employee - he wasn't speeding "apparently"
If anyone could point me to any example/precedent/law that might be of interest I would be very grateful... !!
Clients........
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Replies (4)
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Employee's fault
Regardless of the employer's need for that lane to be used, it sounds like the employee was at fault, otherwise why pay the other driver's expenses?
Agree with Andy
I agree with Andy. Presumably the employee claims mileage - in which case the approved mileage rate covers all expenses including repairs so the cost of replacing the employee's wing mirror would be taxable on the employee. If the employee has to pay for the other driver's wing mirror then presumably it was his fault and the employer is settling the employee's liability. If the employer wants to fully reimburse the employee he will have to gross up the amount paid to the employee so he ends up with £400 in his pocket.
Cathy
Hard to disagree with Andy or Cathy on this.
The best you might get is that the cost of the other driver's mirror is a business expense as it was damaged by an employee on business and hence became a liability of the company but i can't see how the cost of repairing the employee's isn't taxable.
Thankyou
I have tried telling the client it is taxable on the employee but he wasn't happy hence my cry for your help.
I think Democratus potential solution of claiming the "other sides" cost as a business expense is the best I will offer him and suggest the remainder goes on the p11d or grossed up on a subsequent payroll.