Originally Posted by
irishguy28
When something is considered a perk by the tax man, it doesn't matter who gives it to you. You're taxed on the basis of the total sum of all emoluments you receive in the year, regardless of how many income streams you might have.
You're taxed on your total earnings - so for people with income from more than one source, they can't apply a full tax-free allowance to EACH income source, and neither can they apply the full set of tax free allowances to EACH income source. Instead, their total income is calculated, and they are taxed on that one figure.
When in a previous job I used to get a cab sent every morning for me (very early starts, and mandatory - don't ask) paid for by the company. No major problems with that except I was taxed on these cabs as a benefit in kind which was frustrating. There was no financial benefit to me as I had a yearly travelcard already (needed to get around & get home) and therefore effectively I was paying twice for my journey into work. I had a lovely chat with someone from HMRC who tried to explain that I was getting a financial benefit i.e. the cost of the cab ride. After a bit of ArgyBargy I enquired about people who worked in the transport industry and got reduced or free travel on company services. I was told that different rules apply depending on the financial arrangements involved. Sadly I couldn't pay for the cabs myself and claim them back, so I couldn't pay the bill each month earning myself miles before having the cash cost reimbursed by the company.
He mentioned company cars (as he had one) and about their benefits outside of work travel & told me that the money I saved by having a cab into work was taxable and that I paid/would pay 20% on the total figure. So I again asked what money I was saving having already handed over £1000+ to TFL for my travelcard, I could get into work without the taxi and only used it because it was mandatory. The job didn't pay very well and thanks to a relatively high cost of living just inside zone 2, I was only just surviving. He asked if I'd considered moving further out so I wouldn't have such high living costs, but as I pointed out then the higher cost of the taxis would more than probably wiping out any savings (was paying circa £3 per day tax on a £15 taxi). The extra I was paying each year was already £600 and that worked out at a few percent of my salary before tax.
Sensing this was possibly a bad line of argument for pursuit (he came close to saying I
was paying twice) he switched to saying how those were the rules, so tough if they're unfair to you.
I wouldn't have minded so much if I could have got the miles out of it but sadly there was no chance of that.