I used to do a job where the hourly rate was crap, but the wages were made up with a daily meal allowance. Is this allowance all claimed off the taxman thus saving the employer money, or is it a tax benefit for the employee? Apparently banks disregard allowances when calculating loans etc. I’m now on a weekly salary, with good night out money, night out bonus and parking paid for on top, but I remember reading on here how people don’t regard allowances as wages.
You shouldn’t regard allowances as wages. If you take holiday then all a company will pay you is the basic salary. If you wage is comprised of 20% allowances then you take quite a hit when you have time off.
Allowances are just money which an employer can give an employee, up to an amount set by HMRC, on which PAYE and NI is not levied for specific things related to working away from home. An employer doesn’t claim it back.
I make full use of the maximum allowances, night-out money at £26.16 for each night away and £2 per day for meal allowance, this is payable without having a night out. You can claim more in meal allowance, but over £2 you need to show receipts.
I pay myself monthly, 1st April is my next pay day, and I will be paying myself £599.36 in allowances. If I paid myself this as wages then there would be about £170 PAYE and NI on it. So I take full advantage of the rules as set by HMRC in order to pay them as little as legally possible.
I self-cater, and I don’t spend anything like that amount as a result of being away, but then there’s no obligation to.
I don’t really differentiate between wages and allowances, to me it’s all the same thing, money in the bank and the more I get of it and the less HMRC get of it, the happier I am. 
The employer saves a small amount by paying some of your remuneration as meal allowances etc as there is no employer NI to pay on that amount. As far as tax is concerned, I don’t think it makes any difference to the employer (although it does allow the employee to keep a little bit more of it - there will be no NI to pay and it may be allowable against Income Tax, depending on exactly what the allowance is for).
Of course, if he keeps your hourly rate low by doing this, it costs him less if he gives you (say) a 3% pay rise…
It also means that holidays will be paid at a much lower rate (no meal allowances ect while you’re sunning yourself in Cleethorpes), and banks may well exclude such allowances etc when deciding how much to lend.
Your Local authority and the DWP (WTC)would count any tax free allowences as earnings , because they don’t want to pay you anything ,the banks may do the opposite if they don’t want to give you a loan,
My argument was that night out and meal allowences shouldn’t be on your payslip , and the money should be paid in cash which you sign for each week/month
If you bank it its wages! Banks only see what goes in,not what its made up of. And with a half decent firm holiday pay is an average of say the last 13 weeks. So you wont be destitute if you have a week off.
Banks will look at your pay slips when applying for mortgage and will look at your basic wage to see how much you can borrow.
For mortgage lending purposes, allowances for meals, nights out etc are NOT included in your income as they are regarded as reimbursement for expenses incurred (albeit with no receipts etc to back them up). That’s the way most lenders treat them at any rate. Bonuses and overtime will normally be included provided you (or your employer) can show that they are a regular part of your income.
Unusually, my current employer pays us maximum allowances, 4 nights out a week even if we don’t do them and pays us the same on a holiday week! First company I have worked for where it doesn’t cost me to take time off!
rgt1973:
Unusually, my current employer pays us maximum allowances, 4 nights out a week even if we don’t do them and pays us the same on a holiday week! First company I have worked for where it doesn’t cost me to take time off!
.This is illegal
europleb:
rgt1973:
Unusually, my current employer pays us maximum allowances, 4 nights out a week even if we don’t do them and pays us the same on a holiday week! First company I have worked for where it doesn’t cost me to take time off!.This is illegal
Really?
europleb:
rgt1973:
Unusually, my current employer pays us maximum allowances, 4 nights out a week even if we don’t do them and pays us the same on a holiday week! First company I have worked for where it doesn’t cost me to take time off!.This is illegal
I don’t see why. I usually do 4 or 5 nights out but work much shorter days where as some of the others push to be home every day but still get paid the night out. Surely the payments are at the employers discretion?
No worse than tipper drivers paid by the load or people paid percentage!
rgt1973:
europleb:
rgt1973:
Unusually, my current employer pays us maximum allowances, 4 nights out a week even if we don’t do them and pays us the same on a holiday week! First company I have worked for where it doesn’t cost me to take time off!.This is illegal
I don’t see why. I usually do 4 or 5 nights out but work much shorter days where as some of the others push to be home every day but still get paid the night out. Surely the payments are at the employers discretion?
It starts to be a problem when the allowance is paid tax-free (which is allowed up to about £26 if you use a sleeper cab, £35 if you don’t) but the employee didn’t actually spend the night away from home. In effect the employee is underpaying tax by £5 or £7 each time (assuming he’s a basic rate tax payer). Could add up to several hundred quid if the taxman got wind of it and came after you for the past 5 years’ worth of underpaid tax.
rgt1973:
europleb:
rgt1973:
Unusually, my current employer pays us maximum allowances, 4 nights out a week even if we don’t do them and pays us the same on a holiday week! First company I have worked for where it doesn’t cost me to take time off!.This is illegal
I don’t see why.
Because an employer can only legally pay night-out money if the employee actually is having a night out in the truck, the whole point of it is to reimburse him for the extra expense of working away from home.
HMRC would not look kindly on an employee who was paid night out money while he was laying on a sunbed in Tenerife sipping Pina Colada . 
Now, correct me if I’m wrong, but every holiday day paid counts as 8 hrs towards your WTD total, so logically if it is classed as working time I would be entitled to my usual work allowances including night out because if I’m in a hotel on holiday I would be working away![WINKING FACE][WINKING FACE][WINKING FACE]
When I got my mortgage, the only thing on wages that didn’t count was irregular allowances and overtime.
Anything on there week in, week out DID count. Thus, when I provided 5 years of payslips with permanent nights/weekends/scheduled attedance on them, I easily got a good rate mortgage on an otherwise unaffordable property in the south east of England - pretty much unaffordable these days as well.
“scheduled attendance” is the real coup here though. It’s nothing but contract overtime. BUT because you get the same amount each week, it makes up so much of your pay, AND the word “overtime” is not used to describe it on the pay slip, the lender will take it all into account when calculating your “wages multiple” to come up with their borrowing limit for you.
I didn’t even need to put my missus’ earnings on the form to bump it up more - I’d already done enough. 
The cutting back by Royal Mail on the amount of SA pay you could get on a duty was one of the main reasons I left when I did. Losing that SA was like taking a pay cut of over £10kpa. SA used to be paid at 1.65x rate, reduced to 1.15x rate by the time I left. 
I’m pretty sure I’d not stand a chance of getting a new mortgage now, but I don’t need to change the one I’ve got - so who cares? 
I don’t know how long you’ve had that mortgage, but the goalposts moved several dozen yards in the wake of the financial crisis, resulting in lenders being much less likely to take account of subsistence/night out allowances etc - even where they are being paid on a regular basis. That’s not to say you won’t find a lender that will allow them - they are out there - just that they are much more picky than they used to be.