What salary components are considered

Hello

Every Employer has it's own salary structure offering. May I know what components of salary are considered and summed to calculate Total earnings.

My Employer Pays me below components (Please do not laugh )

Basic Salary
Accommodation
Food Expenses
Travel Expenses
Living Allowance
Council Tax
City Comp Pay
Additional Pay
-----------------
Sum: Total Gross Pay

May I know which all would be considered and summed as my total earning?

Many Thanks in advance.

PG London

pg.london wrote:Hello

Every Employer has it's own salary structure offering. May I know what components of salary are considered and summed to calculate Total earnings.

My Employer Pays me below components (Please do not laugh )

Basic Salary
Accommodation
Food Expenses
Travel Expenses
Living Allowance
Council Tax
City Comp Pay
Additional Pay
-----------------
Sum: Total Gross Pay

May I know which all would be considered and summed as my total earning?

Many Thanks in advance.

PG London

The question is: are these allowances part of your remuneration package and is there a contractual obligation on your employer to pay you, or are they being paid to you to reimburse you for money you've spent? From the way you have presented the information, it would seem that this is part of your remuneration package (but obviously you would know better) in which case you can use your allowances as part of your earnings in accordance with UKBA's Policy Guidance. However, if your employer is simply reimbursing you, these allowances will not qualify as earnings.

ScopeD wrote:

pg.london wrote:Hello

Every Employer has it's own salary structure offering. May I know what components of salary are considered and summed to calculate Total earnings.

My Employer Pays me below components (Please do not laugh )

Basic Salary
Accommodation
Food Expenses
Travel Expenses
Living Allowance
Council Tax
City Comp Pay
Additional Pay
-----------------
Sum: Total Gross Pay

May I know which all would be considered and summed as my total earning?

Many Thanks in advance.

PG London

The question is: are these allowances part of your remuneration package and is there a contractual obligation on your employer to pay you, or are they being paid to you to reimburse you for money you've spent? From the way you have presented the information, it would seem that this is part of your remuneration package (but obviously you would know better) in which case you can use your allowances as part of your earnings in accordance with UKBA's Policy Guidance. However, if your employer is simply reimbursing you, these allowances will not qualify as earnings.

Thanks for the information.They are not reimbursed components. Therefore, I hope those components would be considered as earning.

Basic Salary YES
Accommodation If paid by employer as allowance then YES, if paid by employer directly to Landlord then NO
Food Expenses NO (except where paid as allowance)
Travel Expenses NO ( YES for travel allowance)
Living Allowance YES
Council Tax GREY AREA, How come your employer paying your council tax?? never heard of it
City Comp Pay YES for London/Regional allowances
Additional Pay YES if contractural

Employer Pension Contribution - NO

pg.london wrote:

ScopeD wrote:

pg.london wrote:Hello

Every Employer has it's own salary structure offering. May I know what components of salary are considered and summed to calculate Total earnings.

My Employer Pays me below components (Please do not laugh )

Basic Salary
Accommodation
Food Expenses
Travel Expenses
Living Allowance
Council Tax
City Comp Pay
Additional Pay
-----------------
Sum: Total Gross Pay

May I know which all would be considered and summed as my total earning?

Many Thanks in advance.

PG London

The question is: are these allowances part of your remuneration package and is there a contractual obligation on your employer to pay you, or are they being paid to you to reimburse you for money you've spent? From the way you have presented the information, it would seem that this is part of your remuneration package (but obviously you would know better) in which case you can use your allowances as part of your earnings in accordance with UKBA's Policy Guidance. However, if your employer is simply reimbursing you, these allowances will not qualify as earnings.

Thanks for the information.They are not reimbursed components. Therefore, I hope those components would be considered as earning.

silverline wrote:Basic Salary YES
Accommodation If paid by employer as allowance then YES, if paid by employer directly to Landlord then NO
Food Expenses NO (except where paid as allowance)
Travel Expenses NO ( YES for travel allowance)
Living Allowance YES
Council Tax GREY AREA, How come your employer paying your council tax?? never heard of it
City Comp Pay YES for London/Regional allowances
Additional Pay YES if contractural

Employer Pension Contribution - NO

pg.london wrote:

ScopeD wrote:

pg.london wrote:Hello

Every Employer has it's own salary structure offering. May I know what components of salary are considered and summed to calculate Total earnings.

My Employer Pays me below components (Please do not laugh )

Basic Salary
Accommodation
Food Expenses
Travel Expenses
Living Allowance
Council Tax
City Comp Pay
Additional Pay
-----------------
Sum: Total Gross Pay

May I know which all would be considered and summed as my total earning?

Many Thanks in advance.

PG London

The question is: are these allowances part of your remuneration package and is there a contractual obligation on your employer to pay you, or are they being paid to you to reimburse you for money you've spent? From the way you have presented the information, it would seem that this is part of your remuneration package (but obviously you would know better) in which case you can use your allowances as part of your earnings in accordance with UKBA's Policy Guidance. However, if your employer is simply reimbursing you, these allowances will not qualify as earnings.

Thanks for the information.They are not reimbursed components. Therefore, I hope those components would be considered as earning.

Living allowance (A) is a part of my remuneration package. My company gives me option of declaring my actual expenses (B) (like Food, travel, council tax) out of living allowance (A). Hence the actual expenses (B) become non-taxable and tax is charged on undeclared living allowance (A-B). If I do not declare them (B), I would get them anyways as taxable living allowance. I hope this gives a clear picture on my case.

May I now ask experts to comment whether the components (B like House, food expense, Travel Expense) would be considered as income by home office or not?

Many Thanks in advance
PG

pg.london wrote:Living allowance (A) is a part of my remuneration package. My company gives me option of declaring my actual expenses (B) (like Food, travel, council tax) out of living allowance (A). Hence the actual expenses (B) become non-taxable and tax is charged on undeclared living allowance (A-B). If I do not declare them (B), I would get them anyways as taxable living allowance. I hope this gives a clear picture on my case.

I'm not sure I've understood you right, but from your statements, it sounds like you can actually "declare" your food and travel expenses so they can come out of your "Living Allowances" as a "Non Taxable" Allowance. To me, this comes out as a reimbursement if you are having to declare them as such (which explains why they are then classified as non-taxable allowances).

May I now ask experts to comment whether the components (B like House, food expense, Travel Expense) would be considered as income by home office or not?

From what you said about "declaring" these expenses and they being paid out as "non taxable" items, I doubt they would qualify as income. You really come across as someone who is being reimbursed, but wait for other forum members to comment.

Whatever nature of heading if it is tax ble THAN will be considered by HO -SIMPLE

Sushil-ACCA wrote:Whatever nature of heading if it is tax ble THAN will be considered by HO -SIMPLE

Since I am temporarily transferred to UK, I can claim tax benefits under dispensation for initial period. It is under HMRC Laws. I am not reimbursed here and there is nothing i am getting outside my remuneration package. The sum of all 12 monthly GROSS salaries still remain under my package. It is just that I am showing my expenses for claiming tax benefits under HMRC's dispensation (temporary relocation).

Suppose A is my monthly living allowance (which is a part of my package) and B is what I declare as expected expenses for coming month, I get two components in my salary slip. First is undeclared living allowance (A-B) on which the tax is charged and then B which is not Tax-charged. Ultimately the sum credited is still A ( (A-B) + B) , it is just that I get tax benefits by declaring my actual expenses.

HSMP /T1 is based on redisency , in strict sense u will not qualify , unless Case worker not bothered

if applicant is on t2 than this payslip / p60 will counted towards ilr

pg.london wrote:

Sushil-ACCA wrote:Whatever nature of heading if it is tax ble THAN will be considered by HO -SIMPLE

Since I am temporarily transferred to UK, I can claim tax benefits under dispensation for initial period. It is under HMRC Laws. I am not reimbursed here and there is nothing i am getting outside my remuneration package. The sum of all 12 monthly GROSS salaries still remain under my package. It is just that I am showing my expenses for claiming tax benefits under HMRC's dispensation (temporary relocation).

Suppose A is my monthly living allowance (which is a part of my package) and B is what I declare as expected expenses for coming month, I get two components in my salary slip. First is undeclared living allowance (A-B) on which the tax is charged and then B which is not Tax-charged. Ultimately the sum credited is still A ( (A-B) + B) , it is just that I get tax benefits by declaring my actual expenses.

I think I now got your explanation. Re-wording: Your living allowances are pegged at, say £100/month. In order to minimise the tax consequences your payslip seeks to show part of the £100 as non taxable "Expenses" (say £70 is shown as "expenses" thereby leaving £30 as the taxable allowance)... but the total of your "taxable" and "non-taxable" grosses up to £100. Is this so???

Perhaps the challenge is to prove to the UKBA that the £70 "non-taxable expense" is not a reimbursement as it all boils down to what proof is available to show this. From what you say your payslip looks like, I suppose this will be a challenge.

Hi,

I am in Tier 1 General. My earning is been counted including both my essential car user allowance (£100 every month) and my mileage claim (this varies every month) because both are taxed.

So from my experience, any income that are taxed including your reimbursements can be counted as your income.

My visa is done by OISC approved solicitor and she told me this.

seniors am i right here?

YES all income those r taxable r counted by HO

Every allowances you mentioned will be considered for gross salary.
I also paid in dispensation model while on T2 and successfully got the T1 visa last year....

Hello Experts,

Thanks for your inputs. We have both positive and negative opinions here. I checked other forums and found another success case like Bublin123.

you may refer to thread 86633 for discussion on dispensation cases(not sure if below link will work)

http://www.immigrationboards.com/viewtopic.php?t=86633

However, the case worker may go wrong and consider the declared expenses (for tax benefits) as reimbursements. To avoid the situation and to clarify on salary components, do you experts like to suggest any sort of letter or document to be placed with my application? I am placing my salary slips, bank statement and deputation letter stating salary break-up. The letter talk about single living allowance component and also talks about benefit of declaration of expenses on living allowance components. But it doesn't specifically name House expense, food expense etc.

Do you also suggest any particular statement to be written in covering letter to clarify the case?

Kindly share your views...

rules for qualifying relocation expenses are complex and requires specialized advise. BUT...

It LOOKS that you might be able to claim points but it's prudent to have a letter from employer detailing the nature of these expenses. Your employer might be reporting these expenses in P11D/P9 & paying class 1 A NIC.

To be on safe side, review your case without claiming points on earning related to relocation.

pg.london wrote:Hello Experts,

Thanks for your inputs. We have both positive and negative opinions here. I checked other forums and found another success case like Bublin123.

you may refer to thread 86633 for discussion on dispensation cases(not sure if below link will work)

http://www.immigrationboards.com/viewtopic.php?t=86633

However, the case worker may go wrong and consider the declared expenses (for tax benefits) as reimbursements. To avoid the situation and to clarify on salary components, do you experts like to suggest any sort of letter or document to be placed with my application? I am placing my salary slips, bank statement and deputation letter stating salary break-up. The letter talk about single living allowance component and also talks about benefit of declaration of expenses on living allowance components. But it doesn't specifically name House expense, food expense etc.

Do you also suggest any particular statement to be written in covering letter to clarify the case?

Kindly share your views...

Annual millage claims only over and above following advised rates by HMRC are treated as earnings and taxed.

upto 10k miles - 45p/mile
over 10k miles - 25p/mile

if you claim 8000 miles per year @ 50p/mile, only £400 (8000x5p) will be taxable and qualify for points claims. If you claim £4000 (8000x50p), then make sure you figners are crossed.

Dasavathar wrote:Hi,

I am in Tier 1 General. My earning is been counted including both my essential car user allowance (£100 every month) and my mileage claim (this varies every month) because both are taxed.

So from my experience, any income that are taxed including your reimbursements can be counted as your income.

My visa is done by OISC approved solicitor and she told me this.

seniors am i right here?

Hi Guys sorry to jump into middle of your conversation.

@ Silverline - could you please advise me a bit more about travel/mileage claim and what earnings I can claim…!!?
Our company introduced travel scheme last year in 2011 and it benefited us to pay a low tax/NI deductions where normally we used to pay 20% but after this scheme tax/NI deductions were 13-14% for about a year.

Now I can't understand the way it is laid out on our payslips. I give you an example of one of my payslip.

Pay and Allowances
Notional Pay £1906.98
P/Holiday £309.24
UCA Deductions -£6.00
Travel cont deduct -£462.69 (decuctions are more that payments!!)
Travel cont Pymt £420.63
UCA Allowance £6.00
Total Payments £2174.16

Deductions
Tax £234.40
Nat. Insurance £142.98

This Pay Period
Pay frequency 4 weekly
Tax code 474L
NI cat A
Taxable pay £1747.53
Net Pay £1796.78

I want to know that what earnings will I be able to claim Total Payments or Taxable Income!!? Guidance notes are not clear about that.

Thanks in advance.
Farhan

Anyone there is able to answer please!

alifaroo wrote:Hi Guys sorry to jump into middle of your conversation.

@ Silverline - could you please advise me a bit more about travel/mileage claim and what earnings I can claim…!!?
Our company introduced travel scheme last year in 2011 and it benefited us to pay a low tax/NI deductions where normally we used to pay 20% but after this scheme tax/NI deductions were 13-14% for about a year.

Now I can't understand the way it is laid out on our payslips. I give you an example of one of my payslip.

Pay and Allowances
Notional Pay £1906.98
P/Holiday £309.24
UCA Deductions -£6.00
Travel cont deduct -£462.69 (decuctions are more that payments!!)
Travel cont Pymt £420.63
UCA Allowance £6.00
Total Payments £2174.16

Deductions
Tax £234.40
Nat. Insurance £142.98

This Pay Period
Pay frequency 4 weekly
Tax code 474L
NI cat A
Taxable pay £1747.53
Net Pay £1796.78

I want to know that what earnings will I be able to claim Total Payments or Taxable Income!!? Guidance notes are not clear about that.

Thanks in advance.
Farhan

It's hard to say anything without details of travel arrangement. Apparently it's not a millage allowance.

alifaroo wrote:Anyone there is able to answer please!

alifaroo wrote:Hi Guys sorry to jump into middle of your conversation.

@ Silverline - could you please advise me a bit more about travel/mileage claim and what earnings I can claim…!!?
Our company introduced travel scheme last year in 2011 and it benefited us to pay a low tax/NI deductions where normally we used to pay 20% but after this scheme tax/NI deductions were 13-14% for about a year.

Now I can't understand the way it is laid out on our payslips. I give you an example of one of my payslip.

Pay and Allowances
Notional Pay £1906.98
P/Holiday £309.24
UCA Deductions -£6.00
Travel cont deduct -£462.69 (decuctions are more that payments!!)
Travel cont Pymt £420.63
UCA Allowance £6.00
Total Payments £2174.16

Deductions
Tax £234.40
Nat. Insurance £142.98

This Pay Period
Pay frequency 4 weekly
Tax code 474L
NI cat A
Taxable pay £1747.53
Net Pay £1796.78

I want to know that what earnings will I be able to claim Total Payments or Taxable Income!!? Guidance notes are not clear about that.

Thanks in advance.
Farhan

Silverline, Thanks for coming back to me.
It called expense contribution scheme - simply travelling between home to work place and it was same as you mentioned in your earlier post about first 10,000 miles for 45p/mile.

Some FAQs from that travel scheme;
Q: What is Expense contribution scheme?
A:Eligible employees receive a contribution to their travel expenses which is tax and National Insurance (NIC) free. In return they give
up some of their gross pay which is called a salary sacrifice. If paid a contribution, the overall amount of take home pay should then
increase. The expense contribution is paid to cover travel costs incurred on journeys from the employee’s home to a temporary workplace and back again.

Q2. Why introduce the expense contribution scheme?
A2. The expense contribution scheme allows Company to pay you in a more cost effective manner and remain competitive in the marketplace.
In your current situation you pay for your travel expenses out of your taxed pay. For an employee paying basic rate tax at 20% and
NIC at 12%, each £1.00 of your gross taxed pay provides you with net pay of £0.68.
Under the expense contribution scheme, because the expense contribution is tax and NIC free, £1.00 of the contribution will provide
you with £1.00 net pay. So, if receiving an expense contribution, you should be better off.
In addition, COMPANY does not have to pay NIC on the expense contribution so the company saves too.
The Scheme provides a win-win result for most eligible employees and the company.

Hope you will get an idea from this – I just can’t figure out what income should I claim Total or Taxable.
Regards

Anyone there would like to answer please re below!
Regards

alifaroo wrote:Silverline, Thanks for coming back to me.
It called expense contribution scheme - simply travelling between home to work place and it was same as you mentioned in your earlier post about first 10,000 miles for 45p/mile.

Some FAQs from that travel scheme;
Q: What is Expense contribution scheme?
A:Eligible employees receive a contribution to their travel expenses which is tax and National Insurance (NIC) free. In return they give
up some of their gross pay which is called a salary sacrifice. If paid a contribution, the overall amount of take home pay should then
increase. The expense contribution is paid to cover travel costs incurred on journeys from the employee’s home to a temporary workplace and back again.

Q2. Why introduce the expense contribution scheme?
A2. The expense contribution scheme allows Company to pay you in a more cost effective manner and remain competitive in the marketplace.
In your current situation you pay for your travel expenses out of your taxed pay. For an employee paying basic rate tax at 20% and
NIC at 12%, each £1.00 of your gross taxed pay provides you with net pay of £0.68.
Under the expense contribution scheme, because the expense contribution is tax and NIC free, £1.00 of the contribution will provide
you with £1.00 net pay. So, if receiving an expense contribution, you should be better off.
In addition, COMPANY does not have to pay NIC on the expense contribution so the company saves too.
The Scheme provides a win-win result for most eligible employees and the company.

Hope you will get an idea from this – I just can’t figure out what income should I claim Total or Taxable.
Regards

Hi Evereyone,
Anyone there claim expenses like Authorised Mileage Allowance Payments (AMAP) and are these payemtns acceptable for tier 1 general earnings??!

AMAPs are not an income item - you are being reimbursed for (approved) business mileage carried out in your own (private) vehicle.


edited for spelling.

AccountantMatthew wrote:AMAPs are not an income item - you are being reimbursed for (approved) business mileage carried out in your own (private) vehicle.


edited for spelling.

Thanks for your reply Matt,
Is that the case in both employment and self-employment!?
Regards

AMAPs are only relevant to employment alifaroo (so if you have worked for someone or if you are the director/employee of a company you own) or if you were in self employment (so sole trader/partner) but were under the VAT registration threshold.

If you are a sole trader and above the VAT registration threshold then you will claim the business proportion of your motor expenses as a business expense.

This article is useful - please note that the VAT registration threshold is now £77k (2012-13) and this is also a third party website to which I have no affiliation with whatsoever, it's just a useful article:

http://www.freeagent.com/central/motor- ... d-partners