Relocation allowance in excess of £8000 - taxable when?
Discussion
I know that relocation assistance in excess of £8000 is taxable but I believe that the tax liability falls due in the tax year when the relocation payments are complete
Can anyone confirm this?
I.e.
Tax year 12/13 - relocation payment total £8900
Tax year 13/14 - further relocation payment of £2000.
Total relocation payments £10900
The taxable element is £2900 (£10900 - £8000) but I believed that this was not due until the relocation is finalised or relocation payments stop (i.e. in the latter case maybe the employee reaches an entitlement limit before finalisation of their relocation).
Or is £900 taxable due in the first year and then £2000 in the second year, in the example above?
Thanks!
Can anyone confirm this?
I.e.
Tax year 12/13 - relocation payment total £8900
Tax year 13/14 - further relocation payment of £2000.
Total relocation payments £10900
The taxable element is £2900 (£10900 - £8000) but I believed that this was not due until the relocation is finalised or relocation payments stop (i.e. in the latter case maybe the employee reaches an entitlement limit before finalisation of their relocation).
Or is £900 taxable due in the first year and then £2000 in the second year, in the example above?
Thanks!
I am not at my desk to check, but I believe these are entries on the P11d form - as your payments in year 1 exceed the exemption, I would think that the £900 is taxable in year 1 and the £2k in year 2.
The tax may be coded out to each subsequent year dependent on your earnings and whether you have other income that requires you to submit a Tax Return.
David
The tax may be coded out to each subsequent year dependent on your earnings and whether you have other income that requires you to submit a Tax Return.
David
Thanks David
Yes the entries are on my P11D, in my case the £ numbers are a bit different from the example (but not much).
I had relocation expenses between December and mid-April, most of which was paid to me in the 2012-13 tax year. However, my final claim was for an expense dated 7th April 2013 and I didn't receive payment until 3rd May 2013.
What appears to have happened (I spent some time looking into it last night) is that my employer has put that last expense claim through as 2012-13 tax year benefit. It will suit me to have it in the correct tax year (2013-2014) as I am now self employed and will be unlikely to hit the 40% band this year. Of course, I'll subject to self-assessment here forth.
Yes the entries are on my P11D, in my case the £ numbers are a bit different from the example (but not much).
I had relocation expenses between December and mid-April, most of which was paid to me in the 2012-13 tax year. However, my final claim was for an expense dated 7th April 2013 and I didn't receive payment until 3rd May 2013.
What appears to have happened (I spent some time looking into it last night) is that my employer has put that last expense claim through as 2012-13 tax year benefit. It will suit me to have it in the correct tax year (2013-2014) as I am now self employed and will be unlikely to hit the 40% band this year. Of course, I'll subject to self-assessment here forth.
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