Third Party Expense Payments

Third Party Expense Payments

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I understand that generally where benefits and expenses are provided by a third party they are treated as if they are provided by reason of the employment.

What would be your understanding in the following situation?

A 3rd party company for whom an employee is working for chooses to reimburse fuel costs.  If travel was being reimbursed by the employer then this would be mileage allowance.  Should it therefore follow that the 3rd party should reimburse mileage as opposed to fuel costs?

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By Stuart.thomson
19th Nov 2014 17:34

The question is why would a third party reimburse travel costs. Is it by virtue of his employment with X. If so then it is a benefit as you suggest. If it not connected, say a charity trying to help disabled people's general mobility, then I think it is not a benefit.

I would have thought the individual's terms of employment would cover receipt of gifts. It may be that he needs to remit cash received to the company and can then rearrange the payment in a more tax efficient way with his employer.

However in the absence of further detail you need to look at the facts. If the payment is mileage then that is what it is. If it is fuel reimbursement then that is how you need to treat it. I don't think you have the flexibility to interpret this any way you like.

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