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Dubious Tax Rebate Accepted By Hmrc

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A friend has just had her very dodgy tax rebate accepted.

She claimed for her z1-5 travel card even though she lives in 5 and works in 1 and doesn't come to any additional expense for the odd work trip. Also got her uniform allowance accepted, even though she doesn't wear a uniform and just has normal clothes.

Almost 2k back for 3 years claimed.

What's happened here? From the rules doesn't look like it should of been approved. Have they just accepted it as its not a huge amount?

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Not sure how she worded it.

But it wouldn't of taken much of an investigation to work out that it clearly was way outside of the rules. I know its "only" 2k but they dont seem to be doing a very good job.

You don't word it. You just stick a number in a box. HMRC runs an algorithm that 1) compares numbers to previous year, 2) compares to other businesses in the same trade. They only need to do a thorough check / open an investigation every 6 years as they can retrospectively go back that far.

Congratulations! She has commited tax evasion.

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It's not free money - it's actually your own money - don't ever forget that fact

I'm still trying to get some back! Another letter tomorrow then? :unsure:

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A friend has just had her very dodgy tax rebate accepted.

She claimed for her z1-5 travel card even though she lives in 5 and works in 1 and doesn't come to any additional expense for the odd work trip. Also got her uniform allowance accepted, even though she doesn't wear a uniform and just has normal clothes.

Almost 2k back for 3 years claimed.

What's happened here? From the rules doesn't look like it should of been approved. Have they just accepted it as its not a huge amount?

Why don't you report her to HMRC and see if they do anything?

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Karma, and she is actually a friend.

Although she's being a bit of a bitch saying she proved me wrong and that she was allowed too claim all of those.

OK - to keep your 'karma' in the right place. I will be happy to do this on your behalf.

Fire away the details to me when it suits { when she moves from bitch to complete bitch - I know how burds work}

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A friend has just had her very dodgy tax rebate accepted.

She claimed for her z1-5 travel card even though she lives in 5 and works in 1

​I can't recall UK tax laws as I have been away from the UK for too long, but both in Switzerland and in Germany you can of course offset your travel expenses to and from your regular place of work from your taxes (within certain limits, i.e. a fixed amount per km when commuting by car for example), regardless whether you are an employee or self-employed.

After all that's an expense you are incurring purely to earn an income so it reduces your actual income and therefore it should also reduce your taxable income, so I don't see why that's supposed to be dodgy.

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You don't word it. You just stick a number in a box. HMRC runs an algorithm that 1) compares numbers to previous year, 2) compares to other businesses in the same trade. They only need to do a thorough check / open an investigation every 6 years as they can retrospectively go back that far.

Congratulations! She has commited tax evasion.

This.

She might get away with it.

Or she may have to pay it all back plus interest and a big fine.

She must be a "risk taker".

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​I can't recall UK tax laws as I have been away from the UK for too long, but both in Switzerland and in Germany you can of course offset your travel expenses to and from your regular place of work from your taxes (within certain limits, i.e. a fixed amount per km when commuting by car for example), regardless whether you are an employee or self-employed.

After all that's an expense you are incurring purely to earn an income so it reduces your actual income and therefore it should also reduce your taxable income, so I don't see why that's supposed to be dodgy.

There's an argument for it of course; but it's not tax law here.

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To start with HMRC are not going to be fully aware of the circumstances surrounding the claim and secondly very few claims will be scrutinised down to the level the OP suggests, not got the staff.

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The position in UK tax law is that travel to your place of work is to put you in a position to be able to work, therefore it is not an expense of employment. However if you have to travel between workplaces during your employment then that is an allowable employment expense. So for example an employee who has to travel to a place of employment to collect his work job sheets for the day and then has to travel to various locations to carry out that work incurs travel to his place of work, which is not an allowable expense, and the has to make various journeys during the day to carry out his work incurs travel expenses that are an allowable employment expense.

It will not be possible to ascertain from numbers on a tax return whether the travel expenses were allowable or not. If however an aspect enquiry was raised it my be established whether the claim for travel expenses was allowable or not. Provided the tax payer told the truth of course.

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The position in UK tax law is that travel to your place of work is to put you in a position to be able to work, therefore it is not an expense of employment. However if you have to travel between workplaces during your employment then that is an allowable employment expense. So for example an employee who has to travel to a place of employment to collect his work job sheets for the day and then has to travel to various locations to carry out that work incurs travel to his place of work, which is not an allowable expense, and the has to make various journeys during the day to carry out his work incurs travel expenses that are an allowable employment expense.

It will not be possible to ascertain from numbers on a tax return whether the travel expenses were allowable or not. If however an aspect enquiry was raised it my be established whether the claim for travel expenses was allowable or not. Provided the tax payer told the truth of course.

Precisely tax returns are numbers not a yarn about how you work. And enquiries probably less than 0.5%.

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they are missing put on 2k now. It wouldn't take long to look into one case like this, an hour or so. And that 2k would be cover a month of wages.

It's a numbers game. If they have to look into 100 claims to find the one which is dodgy and which someone willingly owns up to then it might not be worth it.

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It's a numbers game. If they have to look into 100 claims to find the one which is dodgy and which someone willingly owns up to then it might not be worth it.

Oh it's bloody easy.

Claim for uniform washing.

Either ask the company they work for to tick on their tax sheets who has a uniform.

Or ask for a Photo of employee in said uniform.

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they are missing put on 2k now. It wouldn't take long to look into one case like this, an hour or so. And that 2k would be cover a month of wages.

£2,000 (assuming that's the tax) is quite a lot for a s.336 claim. implying at least £5,000 in expenses and £10,000 at basic rate.

Not many employees incur that level of expenditure, especially if it's not re-imbursed by the employer. Once they cross check against the P11d returns of benefits and expenses my guess is HMRC will be straight onto this.

Expect an enquiry, advise her not to spend the money.

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The system is Self Assessment. HMRC do not police all claims they rely on the taxpayer to make legitimate claims. Obviously they do carry out checks, some if they meet prescribed criteria and others at random. There is an issue with staff morale because staff numbers have been reduced so there are complaints from tax officers about being underpaid and overworked and various reorganisations over recent years will have added to staff dissatisfaction. HMRC claim their computer systems are becoming more sophisticated, although this may be a ploy deter fraudulent claims. The sheer volume of tax returns submitted inevitably allows some suspect claims to escape detection particularly if the amount is relatively small.

I frequently hear assertions that, usually a friend of a friend, has always claimed for a particular expense of doubtful validity and never been questioned about it so it must be allowable. It only means they've been lucky to get away with it. If it is picked up and disallowed then there are penalties that can be applied that the taxpayer will have to pay in addition to the underpaid tax.

Getting back to travel expenses have a look at HMRC Employment Income Manual 32000 Travel Expenses (google EIM32000) this gives you HMRC's interpretation of the legislation. You will understand the complexity of the rules and IIRC you will find mention of various tribunal decisions that explain how the courts have dealt with disputes by taxpayers.

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It was for three years, backdated. Is that still allot for one person and likely to get checked?

I'd say very few employees have genuine allowable expenses that are not reimbursed by the employer and those that do are usually only looking at a few hundred pounds so yes, £1,500 (higher rate) or £3,000 (basic rate) is a lot and very unusual.

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OK well I'm silently hoping she gets caught, is being very arrogant especially as I said no don't try it and is being very smug.

She's bought 400 quid boots so far.

Must be nice boots? :wacko:

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I doubt it, all she's saying about them is the price. If the same boots were in lidl for a tenner she wouldn't touch them.

If they are animal skin and involved cruelty, I may just do something silly.

They must be made out of cow to be proper boots.

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