Taxable/Non Taxable Allowance???

Jo Clark

Hello All

Hope you can help.

A friend of mine is being relocated to a new permanent place of work and will be paid what the company calls 'disturbance and expenses allowance'.

This is at a rate of 16.5p per mile from her current permanent place of work to her new permanent place of work. She has been advised that this will be paid for four years and is not taxable.

My friend has studied personal tax with the AAT and thinks that this should be taxed as it is in relation to a permanent place of work.

Can you please advise whether you think this allowance is taxable or not?

Many thanks in advance.


JC

janwal

Hi Jo

We normally treat these at work the same as removal expenses which are non taxable, as they are a rellocaton payment.

Jan

Jo Clark

Thanks Jan

Hope you are well?

My friend and I would also be interested to hear how other companies deal with this type of expense.

Many thanks.


JC

Dcollins

If your friend is moving home, as well as going to a new workplace, there could be tax-free expenses paid if certain conditions are met - look up 'relocation expenses.'

I've not known of anyone being paid a tax-free sum for four years after relocating within the UK, though. As far as I know there are certain conditions for tax exempt relocation expenses, including a financial limit of £8,000 and a time limit. The expenses must be incurred before the end of the tax year following the one in which the new job began.

If your friend is moving from abroad the time limit could be up to 5 years.

Jo Clark

Hello

Many thanks for your reply. I will pass this on to my friend.


JC