# Tax relief question



## Rayaan

Hi guys, just a quick tax relief question for my son. 

He's started a new job after graduating which is for 1 year but it's 80 miles from home and travelling everyday isn't practical. He's rented a property where his new job is as it works out cheaper than staying in a hotel 1 week at a time. 

Would there be any tax relief for this as in his view he's having to rent the flat because of his job. I'm not an accountant so don't know how these things work particularly especially for employees rather than self employed. Thanks in advance


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## The Cueball

he isn't renting the flat because of his job, he's renting because he doesn't want to commute so far each day.

I.e. the residence isn't necessary for the proper performance of the duties

no relief will be given

:thumb:


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## Rayaan

The Cueball said:


> he isn't renting the flat because of his job, he's renting because he doesn't want to commute so far each day.
> 
> I.e. the residence isn't necessary for the proper performance of the duties
> 
> no relief will be given
> 
> :thumb:


Ah okay! So strictly speaking, from a financial point of view, he's better off commuting if he wanted to save money then really? employer pays 45p per mile up to 10k.


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## fatdazza

If his employer is paying mileage to and from his place of work (i.e. his commute), this will be taxable.

Only mileage payments (subject to HMRC limits) for travel on the employer's business (e.g visiting clients) are not taxable.


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## Cookies

Rayaan

Also bear in mind that his 160 miles-per-day commute means he will only be paid mileage for 12.5 weeks (assuming a 5 day week).

Will the mileage reduce to 25p after the 10k mileage limit, or does it stop completely? 

Cheers

Cooks

Sent from my SM-G950F using Tapatalk


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## The Cueball

Rayaan said:


> Ah okay! So strictly speaking, from a financial point of view, he's better off commuting if he wanted to save money then really? employer pays 45p per mile up to 10k.


Sorry, as above, you can't get paid for your commute either.... and the rate drops down after 10k for any other mileage claims.. 

If he wanted to move to Holland, they do get paid for their commute, not sure if that helps, but annoys the ********** out of me..costs me a extra €1000 a month! . :wall:

:thumb:


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## fatdazza

The Cueball said:


> Sorry, as above, you can't get paid for your commute either.... and the rate drops down after 10k for any other mileage claims..
> 
> If he wanted to move to Holland, they do get paid for their commute, not sure if that helps, but annoys the ********** out of me..costs me a extra €1000 a month! . :wall:
> 
> :thumb:


Just to be clear:

If travelling on business (i.e. visiting clients) mileage payments are tax free. These tax free mileage payments are subject to a maximum of 10k (each year) miles at 45p / mile and 25p / mile for miles over 10k /year. You will be taxed on any amount over these rates (e.g if paid 50p/mile, you pay tax on 5p/mile)

Mileage for commuting is totally separate from this, everything is taxed and there are no limits to the miles. Commuting mileage will not "eat in" to the allowance (10k at 45p/mile etc) for business mileage.

Who said tax was boring :lol:


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## The Cueball

fatdazza said:


> Who said tax was boring :lol:


Everyone. On. Earth.

:lol::lol::lol:


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## baxlin

And the tax-free business mileage is calculated from his place of work, not his home address.

Can’t he find someone who would 'rent a room'?


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## -Stuart W-

It sounds like he would be commuting to a permanent place of work but as you mention it's limited to 1 year and he's to be reimbursed for his travel it might be worth looking into the HMRC rules around travel to a temporary workplace (limited duration of temporary purpose).

The HMRC guide on employee travel can be found here 
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/782253/490_Employee_travel_-_a_tax_and_NICs_guide_for_employers.pdf

:thumb:


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## garage_dweller

> Would there be any tax relief for this as in his view he's having to rent the flat because of his job.


No tax relief and I can't see how he could think there would be. He wasn't forced to take the job.

I'm surprised that an employer will be 45p per mile for an employee to travel to their permenant place of work at a cost of £360 per week or an annual cost of over £17k to get one person to come to work  igmoring the 10k limit of 45p per mile

Has your son misunderstood his employer and they've actually said 'employees get 45p per mile for business travel' and your son assumes this includes travel to work?



> it might be worth looking into the HMRC rules around travel to a temporary workplace (limited duration of temporary purpose).


I'm not 100% sure but I think that only applies if your employer asks you to work at a different site on a temproary basis. So your permenant work place is site a but you're working on site b on a temp basis.


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## Andyg_TSi

No expenses can be claimed for travelling to and from a permanent place of work, commonly referred to as your "ordinary commute"

Please refer to Section 336 (S336) of ITEPA 2003....the Income Tax, Earnings & Pensions Act.

S336 - for expenses to be claimable, the expense must be incurred "wholly", "exclusively" and "necessarily" by the employee in the performance of the duties of the employment.

Your ordinary daily commute to your permanent place of work is not covered by S336, its not an allowable expense

However, if your employer sends you on a business trip, to visit a client for example, then the expenses incurred in visiting that clent would be allowable

Similarly, if you have a permanent office/place of work, but are required to visit multiple sites by your employer (be that on a temp basis) then the travel costs incurred for visiting those sites would be allowable, but the distance would be from your permant workplace, not your home address (so you would net off your ordinary commute mileage)

In the scenarios mentioned above where expenses are allowable, then if you're using your own car for work, the 45p/25p would apply

The main question to ask yourself is, referring back to the specific legislation is have the three tests of the expense being incurred "wholly", 'necessarily" & "exclusively" been satisfied. All three have to apply 

Cheers


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## Rayaan

Sorry for the late replies. 

The confusion has been resolved. Essentially the employer has discounted the accommodation costs as its "on site" so its not as bad as it initially was 

Business expenses still apply 45p/mile to other places of work.


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