Quick question - "away from home allowance"

Quick question - "away from home allowance" - non-existent?

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Construction client, taken on a site worker via agency for fixed term.  Client agreed to pay direct to the worker "the away from home allowance" (all other amounts being paid by agency).

Can i please clarify whether I am correct in my belief, which is that there is no such thing as such an allowance.  

I know there are the benchmark scale Rates but I believe these are simply maximum amounts the employer can 'reimburse' without checking every receipt, as long as receipts are checked for a sample period.

Client is sure there is such a thing.  Am I missing anything?

Thanks all

Replies (5)

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By Mr_awol
12th Dec 2016 15:50

incidental expenses/overnight allowance?

What are they paying?

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RLI
By lionofludesch
12th Dec 2016 16:52

There was an extra-statutory agreement with the Road Haulage Association about overnight allowances for wagon drivers. Not sure if it's still extant or if other industries are involved.

The client may be reading an industry-wide benchmark rate of allowance as being tax free. Not necessarily the case at all.

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By Manchester_man
12th Dec 2016 20:02

Thanks lionofludesch and Mr_Awol. The client wants to pay "whatever the allowance is set at".

I have now discovered that this agency worker will be working away in the sense that he will be away overnight.

I am thinking that the Benchmark scale rates are what the client is thinking of. https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim05231

However, I am now stumped!...

As this is an agency worker who will probably be taken on as an employee after 3 months, I cannot the benchmark rates being allowable. The worker is employed by the agency and paid by the agency. It has been agreed between the parties that my client will pay direct to the worker this "additional payment" when he is working away overnight.

These would not fall to be payments under a contract of employment would they, so I'm thinking the benchmark rates are out of the question.

Anybody know any different?

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Replying to Manchester_man:
By coolmanwithbeard
13th Dec 2016 11:08

Just because payments are not made by the employer does not mean they are not payments paid by virtue of employment. There used to be a question on the P35 about this and payments by third parties. As all dispensations and the like are now cancelled you would need to see what the payment covered but it should be specific and this sounds more like a round sum amount to me which should be included in the PAYE.

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Replying to coolmanwithbeard:
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By Manchester_man
13th Dec 2016 17:01

Thank you Cool man :-)

Yes, that gives me what I need. In addition, I'm pretty sure that such expense payments are treated for all purposes as though the employee is contracted directly. But I couldn't find anything to back up my belief.

Take care

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