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ILR question on tax and dispensation benefits

Only for queries regarding Indefinite Leave to Remain (ILR). Please use the EU Settlement Scheme forum for queries about settled status under Appendix EU

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GOPALAY
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ILR question on tax and dispensation benefits

Post by GOPALAY » Thu Apr 07, 2016 12:06 am

I received my first Tier 1 in MArch 2011 and due for ILR in July 2016

I have been employed for all the 5 years and always with an employer(never self employed). I have filed my returns for all the years.

In the year 2012-2013 my company allowed me to claim dispensation benefits which is given to employees who travel from aboard as it is an off shore company. So I claimed 8000 pounds. My p60 is reflecting only 32000 pounds for which I paid the tax.

In 2013 March I extended my Tier 1 where I showed and claimed points for 40000 because that is what I earned but that is not reflected in p60 as I said earlier.

Will this be a problem if go for ILR now.

O_Relly
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Re: ILR question on tax and dispensation benefits

Post by O_Relly » Thu Apr 07, 2016 2:02 am

Earnings is claimed on gross taxable income.

So do you have payslips showing a total gross of 40k vs P60 showing 32K?

This is likely going to be pulled when reviewing all your 5 year history. How much did you need to meet the earnings criteria? Would you have been ok with 32K?
Cheers,
OR

GOPALAY
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Re: ILR question on tax and dispensation benefits

Post by GOPALAY » Thu Apr 07, 2016 9:23 am

1. Yes I had payslips of 40k and a p60 of 32k. But I have not cheated on tax.

2. As my company is an offshore company they allowed to claim dispensation benefits which is not getting reflected in my p60.

3. I would not have qualified with 32k.

How do we take it from here.

geriatrix
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Re: ILR question on tax and dispensation benefits

Post by geriatrix » Thu Apr 07, 2016 2:40 pm

Perhaps because they were never to be included as "income" but were in fact business expenses ( or reimbursement thereof) incurred on account of your transfer overseas?
Life isn't fair, but you can be!

O_Relly
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Re: ILR question on tax and dispensation benefits

Post by O_Relly » Thu Apr 07, 2016 7:35 pm

Doing a quick google search threw this, (Not sure if this would be of much help)
https://www.gov.uk/employer-reporting-e ... pensations

Above link goes onto say it is not required for the employer to let HMRC know if the dispensation was for regular business travel. So propbably it was treated as a benefit and not considered taxable income ?

Pg 21 states of the Tier 1 policy guidance states,
100. Earnings may include, among other things:
• allowances (such as accommodation, schooling or car allowances) that form part of
your remuneration package;
Pg 22 states:
Allowances
102. We will only include allowances (such as those for accommodation or schooling for your
children) in the assessment of your previous earnings if they are part of your
remuneration package and are not paid to reimburse you for money you have
previously spent.
103. We will only accept allowances as earnings if they are declared in your payslips and there
is a contractual obligation on the employer’s part to make these payments
.
Pg 21 also states:
101. Unearned sources of income that we will not consider as previous earnings include:
• expenses (such as accommodation, schooling or car allowances) that reimburse
you for money you have previously spent;
So in essence if it is an expense you couldn't have claimed for it as earnings as they are not part of the remuneration. However if the 8000 pounds was a benefit (or allowance) which was part of your remuneration, you should be OK.

How was the 8000 pound claim paid out to you. What does it say in your payslip ?

Also you mentioned you filed returns for all years, do you mean you filed your Self Assessment ? Did you have to do this in spite of being a permanent employee ? As far as I am aware you are only required to file your SAs if you had other income apart from your regular income from permanent employment or if you were self-employed or director of your own limited company.
Cheers,
OR

GOPALAY
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Re: ILR question on tax and dispensation benefits

Post by GOPALAY » Fri Apr 08, 2016 10:10 am

Yes Orelly. I did my self assessment every year because there were discrepancies because of this dispensation benefits and also when you change companies there are issues with tax paid.

I was asked to do it initially by HMRC(I guess due to same reason). Now every year I get it so I do it.

GOPALAY
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Re: ILR question on tax and dispensation benefits

Post by GOPALAY » Fri Apr 08, 2016 10:12 am

My only concern was it was not a part of my p60. Probably was considered as a non taxable income but I am not sure still why it was not a part of P60. I am trying to check with the employeer the details regarding this.

O_Relly
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Re: ILR question on tax and dispensation benefits

Post by O_Relly » Fri Apr 08, 2016 3:03 pm

How was the 8000 pound claim paid out to you. In one go or split over months? What does it say in your payslip ?
Cheers,
OR

GOPALAY
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Re: ILR question on tax and dispensation benefits

Post by GOPALAY » Tue Apr 26, 2016 2:36 pm

Sorry I did not know there was a reply to the post. It was not in one go. It was paid over the period of 12 months. In fact the net salary was including those 8000 pounds. But salary slip clearly showed those items which were considered for dispensation. Yes it was reflected in my payslips.

pjkgroups
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Re: ILR question on tax and dispensation benefits

Post by pjkgroups » Sat Jul 02, 2016 9:47 pm

Gopal,

Please let us know if you got any further with this? please let us know if you were able to make an application?

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