ILR urgent query !!!

[i2kshashi]

Hi All,
I received my first Tier 1 in Feb 2011 and due for ILR soon

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

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 ( reputed Tier-1 IT Organisation). So I claimed 41K pounds. My p60 is reflecting only 24k pounds for which I paid the tax.

In 2013 March I extended my Tier 1 where I showed and claimed points for 41k because that is what I earned but that is not reflected in p60 as I said earlier.

My payslips & bank statements showing a total gross of 41k vs P60 showing 24K.

My payslip contains Base Allowance* ( Taxable)

&

I. Rent Allowance**
II. Utilities Allowance**
III. Food Allowance**
IV. Conveyance Allowance**

** considered as tax free only to the extent of bills submitted maximum up to the limits specified.Balance would be considered as taxable.

In the initial deputation letter ,it has been clearly mentioned in the company letter that

"National Insurance contribution (NIC) is exempt for the initial 52 weeks from the start date of
assignment for deputed employees. NI contribution (Employer & Employee) will start from the
53rd week in UK. The amount approximately equivalent to employee NI contribution
(Including tax impact)on Base allowance + city class allowance(if applicable)+ ODA(if
applicable) excluding the dispensation allowances irrespective of the fact that whether you
claim tax free allowance or notice reimbursed through payroll. The applicable employee NI will
be set off against an ODA, if applicable "


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

How can I explain this in the cover letter ? Please confirm this.

[i2kshashi]

Gurus,
Can anyone please reply on the above query ?

Thanks in advance.

[sunny_sunny]

All benefits earned are taxable in UK. May be you can explain this offshore relations to HMRC and pay the tax due on the benefits and apply for ILR.
Salary shown for HO should reflect in HMRC returns, otherwise ILR will be rejected as deception.

[i2kshashi]

Hi Senior Members,
The above original query is related to dispensation-benefits .

I have seen similar query in this forum last month

http://www.immigrationboards.com/indefi ... 06922.html

Can you please suggest ?

[iworker]

@sunny .. maybe u should let it pass if you dont know about it.
They are not taxable.
OP should search guidance on ukvi (i cant remmeber where), and it says what all areas which are covered as off shore. you need to make sure that the area you were working were covered under that area.

[Wanderer]

I'd agree they are not taxable but I'd not be so sure they can be counted as income.

I'd need to research but I reckon it's going to cause the some digging at UKVI on application with the current focus on tax issues.

[i2kshashi]

Many thanks .Wanderer & iworker

I can see the following comments from by O_Relly posted on Thu Apr 07, 2016 6:35 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.

[i2kshashi]

Hi Senior Members ,
Can anyone please reply on the above query ?

[sunny_sunny]

@iWorker
He has declared the benefits as part of income for 41k.
If you show an income to HO for points all that income is taxable.
Otherwise it is a deception.

[bbvyas]

@sunny_sunny, don't comment unnecessary, we are calming point for Income ,not necessary you suppose to pay tax for that income...I declared 57K on my extension and I paid tax for 47K as i put 10K on pension account...I still claimed point for 57K as I earned that money and I got approved too.....
anyway
@i2kshashi : have you got P11D certificate/letter from your employer for that year? Mostly employer provide this certificate as far my experience with working offshore with Oli-gas industry. I cant suggest much on your case but I submitted P11D on every extension and cover letter explanation with that income source.

[i2kshashi]

@bbvyas .Thanks for the clarification
Yes ,I have P11D issued by employer . I will mention this in the cover letter.

[i2kshashi]

@Wanderer /iworker ,if I submit P11D and cover letter with explanation ,would that be OK ? Please confirm this.

[bbvyas]

@bbvyas .Thanks for the clarification
Yes ,I have P11D issued by employer . I will mention this in the cover letter.

We can not claim all amount as a income from P11D so i would suggest you to contact prefessional accountant or your company finance team. (can not claim few expences as a part of income like travelling ...). We can claim as a income on receiving benefit on private medical, personal allowance, ...etc.
Gurus and senior memeber with account/finance knowledge person can suggest what we can consider as income.

[i2kshashi]

Thanks bbvyas

I haven't claimed travelling allowance.
As per the Salary Slip , the following allowances have been included

-Tax Free Allowance
-Health Insurance
-Base Allowance
- City Class Allowance
- Overseas Deputation Allowance


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



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;

[sunny_sunny]

@sunny_sunny, don't comment unnecessary, we are calming point for Income ,not necessary you suppose to pay tax for that income...I declared 57K on my extension and I paid tax for 47K as i put 10K on pension account...I still claimed point for 57K as I earned that money and I got approved too.....
anyway
@i2kshashi : have you got P11D certificate/letter from your employer for that year? Mostly employer provide this certificate as far my experience with working offshore with Oli-gas industry. I cant suggest much on your case but I submitted P11D on every extension and cover letter explanation with that income source.

t

Your case is different. So don't assume you are correct and my statement is wrong.
Don't give wrong advice.

[i2kshashi]

Senior members ,
Any information /update on this would be appreciable.

[iworker]

@sunny,
you are actually being stupid now.
Do u know what offshore means? It is not deception if it is allowed that u dont have to pay tax on certain benefits if u are based offshore. This has nothing to do with other tier 1 candidates.
@OP i think u will be fine.

[haiksuresh]

As per my knowledge, dispensation benefits can be claimed only for tier-2 ICT holders only. But you are in UK based on Tier 1 G visa.

[bbvyas]

@i2kshashi, you should first contact to your company finance team and ask them whats your total package (salary + benefit ..etc) otherwise no one can suggest better than your employer.
whats your P11D statement says? ( your total salary + P11D total = 41K??)
Do you think you will get letter from your employer, says we paid all P11D amount cash equivalent benefit as a part of employment?

[i2kshashi]

@iworker .Thanks

@haiksuresh .Thanks for the information however please provide me any official link to support the statement "dispensation benefits can be claimed only for tier-2 ICT holders only." My employer was aware of my visa status ( Tier-1 G). This query is related to year 2012-2013 only.
In the deputation letter ,the following is mentioned under "Taxes & Social Security Section"

Allowances in UK as mentioned above and India salary equivalent are gross of taxes. These
Allowances are subject to deduction of taxes and national insurance as applicable. National
Insurance contribution (NIC) is exempt for the initial 52 weeks from the start date of
assignment for deputed employees. NI contribution (Employer & Employee) will start from the
53rd week in UK. The amount approximately equivalent to employee NI contribution
(Including tax impact)on Base allowance + city class allowance(if applicable)+ ODA(if
applicable) excluding the dispensation allowances irrespective of the fact that whether you
claim tax free allowance or notice reimbursed through payroll. The applicable employee NI will
be set off against an ODA, if applicable. "



@bbvyas .
Yes,I can request a letter from employer which says we paid all P11D amount cash equivalent benefit as a part of employment.

I already have deputation letter from my employer which states


""During your deputation, you will be paid the applicable allowances as per Company policy and as
outlined in your work authorization documents by the Company in UK, to defray your living
expenses:

a) Base Allowance* : GBP XXXX
I. Rent Allowance** : GBP XXXX
II. Utilities Allowance** : GBP XXX
III. Food Allowance** : GBP XX
IV. Conveyance Allowance** : GBP XX

b) City Class Allowance : GBP XX (if applicable)
c) Overseas Deputation Allowance : GBP XX (if applicable)

Total Allowance Per month : GBP XXXX ( *12 = 41K)




* Base Allowance is Inclusive of Fixed India salary, and other tax free allowances i.e. rent
allowance, utilities allowance, food and conveyance allowance.

** considered as tax free only to the extent of bills submitted maximum up to the limits specified.
Balance would be considered as taxable.

For the first 365 days of your deputation, up to the extent of your current Fixed India Salary, the
Base Allowance will be paid India. However, you would have an option to draw a part of India
salary i.e. BOA overseas. Post completion of 365 days, the Base Allowance will be completely
paid at the onsite location.



Taxes & Social Security

Allowances in UK as mentioned above and India salary equivalent are gross of taxes. These
Allowances are subject to deduction of taxes and national insurance as applicable. National
Insurance contribution (NIC) is exempt for the initial 52 weeks from the start date of
assignment for deputed employees. NI contribution (Employer & Employee) will start from the
53rd week in UK. The amount approximately equivalent to employee NI contribution
(Including tax impact)on Base allowance + city class allowance(if applicable)+ ODA(if
applicable) excluding the dispensation allowances irrespective of the fact that whether you
claim tax free allowance or notice reimbursed through payroll. The applicable employee NI will
be set off against an ODA, if applicable. "

[bbvyas]

@i2Kshashi, looks perfect to me. Nothing wrong at all. i think you are safe.
Just search with "P11D" in this forum.
http://www.immigrationboards.com/uk-tie ... 40753.html

Many more cases are , if you search in google.
There are some less experience caseworker in HO ,who doesn't have much idea on P11D certificate and benefit received on off shore work. I would suggest you go in person , so you can defend your case if caseworker ask question on tax. This days luck does matter more. Good Luck!

[noajthan]

Same day appointments are not

so you can defend your case if caseworker ask question on tax.

Any complex cases will (if not rejected) be put on postal queue for later handling by a senior caseworker.
So, in that case, an expensive PEO application risks turning into a postal application.

[pjkgroups]

Sashi,

Did you get any further with this? please let us know if you have newer updates or if you were able to make an application

[pjkgroups]

@i2Kshashi ... were u able to make an application, kindly advice if P11D was suffice,

[pjkgroups]

i2ksashi .. looks like I might have got some resolution the puzzle ... My UK payslips had an India deduction component which I guess was not part of Gross for tax but was part of Gross for Pay, India deduction component was paiid into India Account alongwith India payslips(Including Income tax in India) for same

On summing up the India deduction component , the numbers seems to stack up , though I'm planning to confirm with company that India deduction component was not part of gross for tax as India tax has been applied for the same as well

will let you know further thanks