Is it worth giving the Seafarers helpline a ring and running the scenario past them, they're usually pretty good.
Telephone: 0300 200 3300Textphone: 0300 200 3319Outside UK: +44 135 535 9022
8am to 8pm, Monday to Friday
8am to 4pm Saturday
Closed Sunday and bank holidays
The main thing to remember is that the expenses must be incurred wholly, necessarily and exclusively in the performance of the employees duties and are obliged to be incurred. (S336 ITEPA 2003)
As long as the receipts are retained to show the actual expenditure then there should be no problem.
The benchmark scale rates are those that HMRC will accept without receipts as long as they are at or below the amounts stated,
The danger arises if the employee is given an amount for expenses that actually exceed what they incur and so a profit situation arises and HMRC will then treat the payment as a round sum allowance and tax and NI it within the provisions of S62 ITEPA 2003
Might be worth getting in touch with the mariners team at HMRC:-
Marine Group S0970
PO Box 3900
You can also telephone us on 03000 582419 (or +44 3000 582 419 for international dialing).
To help us to advise you about your personal contributions position we will ask you to complete a questionnaire giving information about you and the ship you work on.
Generally speaking, there has to be some connection with the UK, e.g the ship must be registered in the UK and fly a British flag; the contract signed by the mariner should be a UK based contract, the mariner should have been in UK territorial waters.
In a word yes.
With direct tax (employment status falls in to this category) you should first appeal to HMRC.
If you are not satisfied with the response, then you can request a statutory independent review (someone other than the original caseworker will review the matter)
You will then be supplied with a "conclusion of review" letter.
If you are still dissatisfied with the outcome of the review, you can appeal to the First Tier Tribunal (Tax) by accessing the notice of appeal form on the HM Courts & Tribunal Service website
With the appeal form, you should enclose the decision letter and conclusion of review.
REMEMBER .... You MUST appeal within 30 days of the decision, otherwise it will be classed as a late appeal and you will then have to have a separate late appeal hearing before the tribunal will hear the substantive issue (although sometimes HMRC will not object to the late appeal)
Central Exception Processing Team
Ring the Employer Helpline again, ask to speak to a higher officer (HO) or senior officer (SO) and then ask the HO or SO to put you through to the Central Exception Processing Team (CEPT) in Newcastle.
This discrepancy should have been picked up automatically, but HMRC do have 4 years from the tax year in which the discrepancy occurred to deal with the issue. S34 Taxes Management Act 1970)
Might be worth looking at this too
On a point of interest...
Just be aware regarding appeals to the First Tier (tax) Tribunal, that HMRC can and do apply to the court for a strike out application where the grounds for appeal have no reasonable prospect of success (see Part 2 (8) of The Tribunal Procedure (First - tier Tribunal) (Tax Chamber) Rules 2009 (S.I. 2009/273 (L.1))
Whilst I understand that people do get frustrated with HMRC and appeal as a last resort, it should be remembered that HM Courts & Tribunals Service is a scant public resource and that it is sometimes worth agents and their clients looking to alternative dispute resolution with HMRC.
As far as the National Insurance (NI) side of things go, Finland is classed as part of the European Economic Area (EEA) - see Chapter 4, CWG2 Employers further guide to PAYE & National Insurance, which is available on HMRC website.
The basic rule is that you pay NI in the country where you work.
However, if your client is an employee who normally works in the UK but is temporarily working in Finland and the work is not expected to last more than 24 months, they would usually carry on being insured in the UK and would pay NI as if they were.
The UK employer should apply for form A1 before the employee leaves the UK.
As it's all a bit of a minefield, my advice, would be to contact HMRC International Caseworker on 0300 200 3506 or +441912037010 if calling from abroad.
Hope that helps!
S98 or S55 penalties?
HMRC should automatically consider mitigation of penalties.
Basically, S98A penalties are mitigated to S55 penalties, which generally speaking will make them less.
If the DLA is overdrawn by more than £5K AT ANY TIME during the tax year, then a beneficial loan arises.
The Director needs to pay interest (S178 ITEPA 2003 interest) http://www.hmrc.gov.uk/manuals/eimanual/EIM26136.htm
at the HMRC official rate
HMRC will expect to see evidence that the interest was actually paid.
There is a helpful working sheet P11D working sheet 4 that you can use to help you calculate.