Letter from accountant for a salaried worker

[serggry]

Dear Senior members,

Could you please confirm that it is possible instead of payslips/letter from employer/tax return to send an Invoice explanations or payment
summaries from the applicant’s managing agent or accountant?

As I have self-employed part of earning I will have a letter from the accountant anyway. Can he also certify my salaried earnings instead of the employer??

According to the manual:
vii) Invoice explanations or payment summaries from the applicant’s managing agent or accountant. These are summaries or explanations created by an applicant’s managing agent (who is usually an accountant). These explanations should include a breakdown of the gross salary, tax deductions and dividend payments made to the applicant. The total gross salary and dividend payments should be the same as the applicant’s earnings. The payment summary should enable us to check that these correspond with the net payments into the applicant’s personal bank account.

Thanks!!

[John]

Not sure I understand the reason for your question. If your employer is paying you a salary then it is a legal requirement for that employer to issue you with a payslip, detailing any deductions. Are you saying that your employer is failing as regards that requirement?

[serggry]

No-No. they are happy to issue me those payslips. But I just wonder if it is possible to have all the proofes from the accountant.

Any thoughts?

Not sure I understand the reason for your question. If your employer is paying you a salary then it is a legal requirement for that employer to issue you with a payslip, detailing any deductions. Are you saying that your employer is failing as regards that requirement?

[John]

I can't see how that helps. Indeed it is liable to confuse and cause queries to be raised.

You do get payslips, don't you?

[serggry]

The problem is that the payslips will show some small reimbursed expenses I do not want to show.

Any advice?

I can't see how that helps. Indeed it is liable to confuse and cause queries to be raised.

You do get payslips, don't you?

[John]

Why on earth do you think that showing expenses might cause a problem?

[Sushil-ACCA]

for salary slips no certification r required

payment received in bak account will corroborate it.

[serggry]

These are reimbursed expenses which decrease my gross earnings.

The actual question is it possible instead of payslip to submit accountant's explanation.

thanks!

Why on earth do you think that showing expenses might cause a problem?

[John]

Ah I see! An interpretation of that is that you are trying to give the impression that you are earning more than you actually are earning from your employer.

Expenses are not earnings!

[mvent00]

Ah I see! An interpretation of that is that you are trying to give the impression that you are earning more than you actually are earning from your employer.

Expenses are not earnings!

But those which are part of salary plan and are present in your payslip.

Quote from Tier 1 guidance:
124. We will only accept allowances as earnings if they are declared in the applicant’s payslips and there is a contractual obligation on the employer’s part to make these payments.
http://www.ukba.homeoffice.gov.uk/sitec ... 310309.pdf page 23 of 44.

[John]

So are we talking about allowances, or about expenses?

I suspect we are talking about things like traveling expenses, and in my opinion, absolutely no way could that be classed as an allowance.

Indeed :-

...... and are not paid to reimburse the applicant for money he/she has previously spent.

[Sushil-ACCA]

reimbursement is not income, only those r taxed are considered by HO

[mvent00]

You are right John, but there are exceptions. Such as, if these are part of salary plan, whether you do traveling/schooling/take an accommodation or not, these will be deposited in your account, and will be part of your payslip. These are not a reimbursement of previously spent money. I think in this case, these allowances are part of income and fulfill these criteria:

123. We will only include allowances (such as those for accommodation or schooling for an applicant’s children) in the assessment of an applicant’s previous earnings if they are part of an applicant’s remuneration package and are not paid to reimburse the applicant for money he/she has previously spent.
http://www.ukba.homeoffice.gov.uk/sitec ... 310309.pdf page 23 of 44.

So are we talking about allowances, or about expenses?

I suspect we are talking about things like traveling expenses, and in my opinion, absolutely no way could that be classed as an allowance.

Indeed :-

...... and are not paid to reimburse the applicant for money he/she has previously spent.

[John]

The OP has told us :-

The problem is that the payslips will show some small reimbursed expenses I do not want to show.

-: so it seems pretty clear to me, and no one on this board forced him/her to write those words, that those amounts cannot possibly be treated as allowances. They are expenses ... pure and simple.

[mvent00]

Agreed!!! At least from this discussion, OP can make a clear decision about the nature of these allowances.

The OP has told us :-

The problem is that the payslips will show some small reimbursed expenses I do not want to show.

-: so it seems pretty clear to me, and no one on this board forced him/her to write those words, that those amounts cannot possibly be treated as allowances. They are expenses ... pure and simple.

[ChetanOjha]

If I am getting the context right if OP get letter from employer(which only contain gross figure and net figure as mentioned in this link) this should solve his problem without making it complex. It would be straight forward way to put the details without revealing reimbursement details.

Yes, I would agree with mvent when reimbursement is part of salary package it can be used. When I applied for my initial HSMP i presented payslips with reimbursements amount(adding up in gross) and it was accepted(and many other people applied the same way for Tier 1 from the same company). I mainly reimbursed annually fly-back to india which was paid by my company(part of my renumeration package). The reimbursement raised my gross figure by approx £1700 and i sail through. I don't understand why this would not considered now. In fact to reach the threshold many people even book their flight in higher class so they can get more amount reimbursed

You are right John, but there are exceptions. Such as, if these are part of salary plan, whether you do traveling/schooling/take an accommodation or not, these will be deposited in your account, and will be part of your payslip. These are not a reimbursement of previously spent money. I think in this case, these allowances are part of income and fulfill these criteria:

123. We will only include allowances (such as those for accommodation or schooling for an applicant’s children) in the assessment of an applicant’s previous earnings if they are part of an applicant’s remuneration package and are not paid to reimburse the applicant for money he/she has previously spent.
http://www.ukba.homeoffice.gov.uk/sitec ... 310309.pdf page 23 of 44.

[John]

serggry, please post, what exactly are you being reimbursed for?

[Sushil-ACCA]

If I am getting the context right if OP get letter from employer(which only contain gross figure and net figure as mentioned in this link) this should solve his problem without making it complex. It would be straight forward way to put the details without revealing reimbursement details.

Yes, I would agree with mvent when reimbursement is part of salary package it can be used. When I applied for my initial HSMP i presented payslips with reimbursements amount(adding up in gross) and it was accepted(and many other people applied the same way for Tier 1 from the same company). I mainly reimbursed annually fly-back to india which was paid by my company(part of my renumeration package). The reimbursement raised my gross figure by approx £1700 and i sail through. I don't understand why this would not considered now. In fact to reach the threshold many people even book their flight in higher class so they can get more amount reimbursed

You are right John, but there are exceptions. Such as, if these are part of salary plan, whether you do traveling/schooling/take an accommodation or not, these will be deposited in your account, and will be part of your payslip. These are not a reimbursement of previously spent money. I think in this case, these allowances are part of income and fulfill these criteria:

123. We will only include allowances (such as those for accommodation or schooling for an applicant’s children) in the assessment of an applicant’s previous earnings if they are part of an applicant’s remuneration package and are not paid to reimburse the applicant for money he/she has previously spent.
http://www.ukba.homeoffice.gov.uk/sitec ... 310309.pdf page 23 of 44.

IF reimbursement is not part of taxable income or tax and NI is not deducted than no way reimbursement is part of salary even on employer letter it is so

if some got let by ineffifiency of HO doest mean it is correct

Exmple

Basc 1200.00
da 65.00
others 235.00

gorss 1500.00

tax 100.00
NI 50.00

200.00

total 1300.00


Reimb 350.00

net 1650.00


Salary for HO IS £1500.00

[ChetanOjha]

IF reimbursement is not part of taxable income or tax and NI is not deducted than no way reimbursement is part of salary even on employer letter it is so

Don't know how company calculated NI or tax but people always received the correct salary without any deduction for example if somebody is receiving £2100 (net), after £500 reimbursement he will get £2600. Though gross varies in both the case Obviuosly companies are taking care of NI and tax issue to make sure it is legal and as per the HMRC regulations. Also note clause from guidance notes for this travel allowance (which you can call expenses if needed).

124. We will only accept allowances as earnings if they are declared in the applicant’s payslips and there is a contractual obligation on the employer’s part to make these payments.

[Sushil-ACCA]

IF reimbursement is not part of taxable income or tax and NI is not deducted than no way reimbursement is part of salary even on employer letter it is so

Don't know how company calculated NI or tax but people always received the correct salary without any deduction for example if somebody is receiving £2100 (net), after £500 reimbursement he will get £2600. Though gross varies in both the case Obviuosly companies are taking care of NI and tax issue to make sure it is legal and as per the HMRC regulations. Also note clause from guidance notes for this travel allowance (which you can call expenses if needed).

124. We will only accept allowances as earnings if they are declared in the applicant’s payslips and there is a contractual obligation on the employer’s part to make these payments.

Company accountant calculate NI and Tax on only earnings of employee
those remburse which are not part of taxable income are not part of salary defined by HO

[shubi81]

It very much looked like from the original post ..that he was quering abt showing salary while contracting here.

My query is similar & rather straightforward, these accountants stuff , expenses doesn't come normally in perm roles ..it comes only when you contract .. & probably I read somewhr when someone did have some trouble in extending his Visa after submitting his contract docs !

Can someone share their views whether payslips provided by Umbrella companies are acceptable for extention of Tier1 ? I presume they'll show only the salary part in the payslip excluding the expenses .. ?

Many Thanks
Sabi

[ChetanOjha]

It very much looked like from the original post ..that he was quering abt showing salary while contracting here.

My query is similar & rather straightforward, these accountants stuff , expenses doesn't come normally in perm roles ..it comes only when you contract .. & probably I read somewhr when someone did have some trouble in extending his Visa after submitting his contract docs !

Can someone share their views whether payslips provided by Umbrella companies are acceptable for extention of Tier1 ? I presume they'll show only the salary part in the payslip excluding the expenses .. ?

Many Thanks
Sabi

As long as you can provide corroborative evidences it is fine.

[serggry]

Thanks for all this discussion,

I am working under umbrella company and my payslip definetely shows 'reimbursed expenses'. They are excluded from the gross and are not taxed. So formally they cannot be considered by HO as part of gross earnings.

The possible wayout was a simple letter from the Umbrella, but they refused to do this. Thus the question was

IS the point (Vii) of the manual is applicable in this case?
vii) Invoice explanations or payment summaries from the applicant’s managing agent or accountant. These are summaries or explanations created by an applicant’s managing agent (who is usually an accountant). These explanations should include a breakdown of the gross salary, tax deductions and dividend payments made to the applicant. The total gross salary and dividend payments should be the same as the applicant’s earnings. The payment summary should enable us to check that these correspond with the net payments into the applicant’s personal bank account.

Any further thoughts?

Thanks,
Serggry

[John]

These explanations should include a breakdown of the gross salary, tax deductions and dividend payments made to the applicant. The total gross salary and dividend payments should be the same as the applicant’s earnings

So how would that help you? As you readily admit, your earnings do not include the amount of reimbursed expenses.

For the future, and for others, you are not required to claim the expenses deduction direct from your employer, the umbrella company. If you don't claim those expenses the earnings will be higher!

After the end of the tax year, nothing to stop you claiming the expense deduction direct from HMRC, and getting a tax rebate. The result, just looking at tax, will be the same, eventually, but there will still be a detrimental effect as far as NI is concerned.

[serggry]

Probably, you are right - almost no point in doing this as the accountant shall disclose this info as well.

So how would that help you? As you readily admit, your earnings do not include the amount of reimbursed expenses.

For the future, and for others, you are not required to claim the expenses deduction direct from your employer, the umbrella company. If you don't claim those expenses the earnings will be higher!

After the end of the tax year, nothing to stop you claiming the expense deduction direct from HMRC, and getting a tax rebate. The result, just looking at tax, will be the same, eventually, but there will still be a detrimental effect as far as NI is concerned.