Travel Expenses: Benchmk Subsistence Allowance

Travel Expenses: Benchmk Subsistence Allowance

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Received a bulletin from those nice TIPS & ADVICE people, about Benchmark Subsistence Payments/Allowances, where:
£5 can be paid if starting out before 6am
+£5 if out for 5hrs or more
or £10 if out for 10hrs or more
or £15 if also out beyond 8pm

Sounds great if business takes you out for long hours of the day.

(For an employee out from 5:45am until say 8:30pm, that's £20 for that day.  I know some one-man bands that are out 5days/week like that.. phew!  A lot of tax-free, NIC free and paperwk-free cash eased out of the company  -- better than a dividend.)

I have applied it to the last three months of my director expenses, but the QUESTION is: How far back could I go in applying this?  Could I review the last three years or, in the extreme, all the way back to (when it was made free of P11D paperwork etc), 6 years ago? 

How far back is okay to claim these previously unclaimed Benchmark Subsistence Payments/Allowances?

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By andrew55
17th Nov 2014 16:36

I think you may need to read that again!

From memory admittedly but I don't think you get that much on a regular basis. For example I think the pre 6.00 am allowance is only if this is an unusually early start. It's not allowable of you start that early every day.

You should also apply to HMRC for clearance to use the benchmark rates. They sometimes refuse this to one man band companies unless you can show someone verifies your claims.

 

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By cheeeetah
17th Nov 2014 19:37

No mention of needing to get approval

I read it again but there's no mention of needing to get approval before using the allowances.  Not to say it is not vital, though.  Anyone know?

As for frequency of giving/claiming those benchmarks, an example given: "As your sales rep is out on the road most days you could pay him around £2500 tax+NI-free a year in allowances. An equivalent taxable pay rise would set you back £4,183."   Probably the early start or late finish would need to be unusual, but the 5hrs and 10hrs...... not sure about that.

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By cheeeetah
17th Nov 2014 17:59

Had a quick look on HMRC

http://www.hmrc.gov.uk/manuals/eimanual/eim05231.htm

Can't see anything about needing prior approval.

That reference/rule applies since 6 April 2009.  So, could I look back over those intervening yrs? 

What's the general rule on this kind of thing, say one missed off a journey to a customer site from 2 years ago.  Is it dead or could you claim it this month?

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By andrew55
19th Nov 2014 08:30

Have a look here

Have a look at EIM05200 which says:

With effect from 6 April 2009, employers can opt to use the advisory benchmark scale rates for subsistence expenses that have been set by HMRC (see EIM05230). They can do so by ticking the appropriate box on form P11Dx or by making a request in writing.

Given that I'd suggest claiming benckmark rates prior to doing so was asking for trouble I its ever spotted!

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By thehaggis
19th Nov 2014 10:52

Dispensation

You need to apply for a dispensation.  A dispensation is not normally backdated.

This is not a tax free allowance. The employee must incur an expense and the employer must reimburse it.  It is the reimbursement that is free of tax.

What you are proposing borders on fraud,

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