Advise needed: No Pay slips for Utility Allowance

ansha1234 · Post by **ansha1234** » Sun Feb 06, 2011 10:38 am

Dear All

I'm thinking of switching to Tier1 visa from my current Tier2 visa status. Before I do that, I want to be sure if I have all the necessary documentations here. I know many of you would have been in similar boats like me.

My employer currently pays me India & UK salary. A part of the UK salary is in form of utility allowance with an monthly limit of 1400 GBP which I can claim against receipts and this covers house rent, council tax, utility payments etc. But I don't get any payslip against this utility allowance as they get reimbursed against the receipts. Any saving on that would be paid at the end of the assignment after tax dedcution. I do get a payslip for UK monthly living allowance though. My question is how can I show this utility allowance as a part of my salary (no pay slips here) because if I dont consider this then I won't be able to meet the salary requirements to gain enough points.

Your prompt suggestion is appreciated here. Thanks !

Natita · Post by **Natita** » Sun Feb 06, 2011 11:50 am

Unfortunately such allowances cannot be considered earnings for Tier 1 application. See Tier 1 (G) guidance Section 124.

ansha1234 · Post by **ansha1234** » Sun Feb 06, 2011 12:10 pm

Natita wrote:Unfortunately such allowances cannot be considered earnings for Tier 1 application. See Tier 1 (G) guidance Section 124.

Dear Natita - Thanks for your response. Can you send me the link for Sec 124 you are quoting here. Utility allowance is very much part of my UK salary though.

mulderpf · Post by **mulderpf** » Sun Feb 06, 2011 12:18 pm

It's a reimbursed allowance since you are claiming using receipts. You cannot include this in your earnings.

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;

ansha1234 · Post by **ansha1234** » Sun Feb 06, 2011 2:02 pm

mulderpf wrote:It's a reimbursed allowance since you are claiming using receipts. You cannot include this in your earnings.

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;

UKBA website does mention that : Earnings may include, among other things:
allowances (such as accommodation, schooling or car allowances) that form part of your remuneration package;

So in my case, utility allowance does constitute my remuneration package, but I have to claim this against receipts like rent, council tax, utility bills etc and hence no formal pay slip for this. I assume other fellow members would have encountered similar situations like me as many India IT companies have similar onsite pay structure. Requesting other members to respond to provide clarity here. Thanks !

mulderpf · Post by **mulderpf** » Sun Feb 06, 2011 2:12 pm

Claiming against receipts means that they are reimbursing you for money you spent. You cannot use this as income.

bubin123 · Post by **bubin123** » Sun Feb 06, 2011 3:30 pm

What will happen if you do not provide receipts of these expenses?
Or, you provide receipts for part of the 1400 GBP? What will happen to the rest of the amount?

Natita · Post by **Natita** » Sun Feb 06, 2011 4:17 pm

ansha1234 wrote:
Natita wrote:Unfortunately such allowances cannot be considered earnings for Tier 1 application. See Tier 1 (G) guidance Section 124.
Dear Natita - Thanks for your response. Can you send me the link for Sec 124 you are quoting here. Utility allowance is very much part of my UK salary though.

Sorry it should be Section 121. http://www.ukba.homeoffice.gov.uk/sitec ... idance.pdf

ansha1234 · Post by **ansha1234** » Sun Feb 06, 2011 7:05 pm

bubin123 wrote:What will happen if you do not provide receipts of these expenses?
Or, you provide receipts for part of the 1400 GBP? What will happen to the rest of the amount?

Let me explain here. My Company gives monthly living allowance for which I have pay slip + there is 1400 GBP of utility allowance which I need to claim against the receipts against things like house rent, council tax, bills etc. These gets credited to my UK bank accounts, but again no mention in pay slips against any utility claims. Any remaining amount which is not used, will be reimbursed at the end of the assignment after deducting appropriate taxes. My assignment letter very clearly mentions monthly allowance + utility allowance as a part of my onsite pay.

How can I now include my utility allowance in my salary calculation, without which I don't think I can qualify for tier1 ? Pls advise.

akash08 · Post by **akash08** » Sun Feb 06, 2011 7:24 pm

I guess you are asking a qustion for which the answer is so clear in the guidance. You can not claim that as your salary. If you are reiumbursed a part of that unused 1400 GBP, then that would be reflected in your payslip and you can claim it as earning.

I understand that you do not like the answer but this is the rule as I understand it. Any tax saving allowance structure which is frquently used by Indian IT companies, are always hard to prove as earning.

I know it is hard to accept it specially when you always mentally add it is as your earning as you know whatever you are saving out of that, is your earning.

That is Indian IT comanies.. in order to save them from paying taxes.. they would come up with such ludicrous salary structure which only helps them!!

imranhameed2000 · Post by **imranhameed2000** » Sun Feb 06, 2011 7:44 pm

this post have put my application in doubt......

I recieve Â£250 as allowence in every pay....it is clearly indicated in my payslips....I get the travel and susitance allowence in my pay slip..

Although it is the tax saving scheme alowence from my emplyer...

I got the letter from employer saying that it is my remuneration package and it is not reimbursed money and they have contractual obligation to pay......

~please tell me can i claim it as earning

akash08 · Post by **akash08** » Sun Feb 06, 2011 7:49 pm

imranhameed2000 wrote:this post have put my application in doubt......

I recieve Â£250 as allowence in every pay....it is clearly indicated in my payslips....I get the travel and susitance allowence in my pay slip..

Although it is the tax saving scheme alowence from my emplyer...

I got the letter from employer saying that it is my remuneration package and it is not reimbursed money and they have contractual obligation to pay......

~please tell me can i claim it as earning

I guess there is a difference in your case. If you get the money always.. it is fine but where the question is on allowance which is reimbursed on showing receipt and not reflected on pay slip.

imranhameed2000 · Post by **imranhameed2000** » Sun Feb 06, 2011 8:26 pm

So it means can i use this as earnings....once aagain my company use this allowence for payin less tax ....they give me this on payment section including this in gros pay then deductin whole allowence in deductions side basicaly at the end i get nothing but it is added in total gross pay ...i have the leetter as i mentioned before . Plz tel can i stil us this as earning

akash08 · Post by **akash08** » Sun Feb 06, 2011 11:33 pm

imranhameed2000 wrote:So it means can i use this as earnings....once aagain my company use this allowence for payin less tax ....they give me this on payment section including this in gros pay then deductin whole allowence in deductions side basicaly at the end i get nothing but it is added in total gross pay ...i have the leetter as i mentioned before . Plz tel can i stil us this as earning

Very difficult without knowing how your payslip looks like.. but as far as I know earning evidence looks at your gross pay and not your net income..so you should be fine but depends on what is actually written in payslip and what the case worker interprets..

Sushil-ACCA · Post by **Sushil-ACCA** » Mon Feb 07, 2011 11:35 am

only taxable allowance r considered by HO

IF UR earning r part of HO PAYE and taxble than u will be fine -isn it simple

gaurav_img · Post by **gaurav_img** » Mon Feb 07, 2011 11:46 am

In my opinion all such allowances needs to be on your payslip for you to claim them as part of earnings.

imranhameed2000 · Post by **imranhameed2000** » Mon Feb 07, 2011 2:45 pm

The allowence i get is included in my total gross pay... it is then deducted on the deduction side where rest of thedeductions take place like NI, Paye tax.

IT lools roughly like this

PAYMENTS DEDUCTION

Week 1 10 hrs Â£100 Paye tax Â£30
Week2 10 hrs Â£100 NI Â£20
Travel and subsistence Â£150 Salary adjustment Â£150

Total Gross Pay Â£350 NET pay Â£100

This is just an example.

Please let me know if i can still use this allowence as my earning.

t1s2010 · Post by **t1s2010** » Mon Feb 07, 2011 2:59 pm

I recieve Â£250 as allowence in every pay....it is clearly indicated in my payslips....I get the travel and susitance allowence in my pay slip..

Although it is the tax saving scheme alowence from my emplyer...

I got the letter from employer saying that it is my remuneration package and it is not reimbursed money and they have contractual obligation to pay......

If it is in payslip and you get every month. It is a 'mere' name to break up salary in component.

I am in India (Got Tier-1 couple of months back), we have HRA (House Rent Allowance), one claims tax deduction at EoY.
Then, you have Travel Allowance, 800INR per month is tax-free, so company marks 800 as 'Allowance', then we have shift-allowance and may be some more, all in payslip, all in salary-credited.

They are part of my salary. I claimed them, I got the T1(G) visa.
I don't see reason for you.

For thread starter, seems otherwise.

imranhameed2000 · Post by **imranhameed2000** » Mon Feb 07, 2011 3:16 pm

@t1s2010

thank you very much for the post......

Please can i ask you few more and final questions..

Were you paying any tax on the allowences?

Were you actually getting them or they were deducted from your salary like in my case?

Was the travel allowence non-taxable?

Please tell me will i have a problem if i claim this travel and subsistence allowence as my earning which is included in total gross pay and then deducted...PLEASE HELP

t1s2010 · Post by **t1s2010** » Mon Feb 07, 2011 4:53 pm

It was for tax benefit purpose. These allowance were not deducted from salary. All were being paid/credited to my account every month.

When I submit final assessment for full financial year, these allowance are exempted from taxable income.

Travel allowance is different from LTA (Leave Travelling Allowance). I guess, you are referring to LTA. (One goes on leave for min 3-days. One can claim once in two-year cycle. One produces receipts, flight tickets etc. This is how it is here. Please correlate LTA per your situation).

We get Travel allowance every month. I guess, every Indian IT company gives this one.

Others, please chip in. Thanks,

imranhameed2000 · Post by **imranhameed2000** » Mon Feb 07, 2011 6:51 pm

thank you mate:

So it means wether i actually get the allowence credited in my account or not untill it shows in my gross pay it should be fine.....as thats what the ukba looks for tota gross pay....

Please tell me if i am ok or not with this.....

thank you

ansha1234 · Post by **ansha1234** » Mon Feb 07, 2011 8:27 pm

Coming back to my original question, how can I justify my utility allowance to be considered to my gross salary? I don't think I'm the only one who has faced this situation. So requesting people to advise here.

I have a salary letter from my employee which includes utility allowance as part of my gross UK salary, but have no pay slips for the same. (This is in addition to my India salary + UK living allowance for which I have payslip & bank credits to show). I get house rent payment & other reimbursements against utility allowance paid directly to my UK bank account. Can a combination of salary letter & bank credits be considered to reflect this as part of my remuneration package, which is true? How will the case worker treat the scenario here?

Expert advise pls. Thanks !

jason23 · Post by **jason23** » Tue Feb 08, 2011 10:20 am

Any allowances reimbursed will unfortunately not be included in your previous earnings claims so only apply if you meet the criteria without it. There is no way around in my opinion.

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Advise needed: No Pay slips for Utility Allowance

Advise needed: No Pay slips for Utility Allowance