What do you think is a reasonable expenses reimbursement if travelling on a two together railcard?

[Egg Centric]

Obviously the correct answer to this is "whatever you can persuade accounts to do/what your company policy says" but what do you think is a reasonable expenses reimbursement if travelling on a two together railcard with someone who isn't an employee?

1. One argument could be that you are half of the travelling unit so should get 50% of the ticket price
2. Another argument could be that you should get 75% of the ticket price since that is what the ticket would cost without the railcard for one person
3. A final argument is that 100% of it should be reimbursed since (in a detail left out) the employee would otherwise be travelling first class and in the circumstances of this ticket a single first class ticket is more expensive than the two together standard tickets

And if the railcard is being renewed, how much if any of that fee should be reimbursed? You could argue many values from 0 to 100% there...

 

[Kilopylae]

since (in a detail left out) the employee would otherwise be travelling first class and in the circumstances of this ticket a single first class ticket is more expensive than the two together standard tickets

I can't follow what this means.

Unless that happens to make sense, I think this makes most sense, as much as I'd try to screw an employer out of 75% if I could!

One argument could be that you are half of the travelling unit so should get 50% of the ticket price

I don't see why the employer should reimburse the Railcard if it's privately held and being used to 'link' a work journey to a friend's leisure (or work for another employer) journey, unless I'm missing some nuance?

 

[spag23]

Off the top of my head I'd plump for #2, especially if you'd bought the Railcard yourself. But don't you need to submit a receipt, or some other evidence?
#3 can't really be addressed without knowing the "detail left out" and its implications/intent.
But I am not a lawyer; nor your Company's HR director!
On business trips I've sometimes had my wife join me in the hotel. But as the double occupancy made no difference to the room cost, I never halved the claim to my employer. But I was scrupulous in not claiming any of her billed meals.

 

[gray1404]

Being realistic I think it would be 100% of ONE of the tickets purchased at the actual cost paid and zero of the cost of the Railcard. I am assuming you'll need to submit a receipt or the actual ticket for reimbursement.

 

[Adam Williams]

I've had a Railcard purchase reimbursed before, but the Two Together Railcard is quite a difficult one to claim was being purchased wholly and exclusively for business purposes (unless the two named cardholders are employees, of course!). Really, it shouldn't be a corp tax deductible expense as a result.

If it was my company though, and I had some confidence the employee might use the Railcard discount often enough such that I'd save more than the cost on train travel in the long run, I'd be inclined to just buy it for them anyway (even if I don't deduct it from profits when working out the tax liability). It'll qualify as a trivial benefit for the employee (so no BIK payable), they can use it for leisure too and it'll save money in the long run.

I think this is somewhere where small companies are a lot more pragmatic/flexible, and one of the downsides of a larger company. And if you're in the public sector, forget it, they'd rather light taxpayer money on fire than take the risk that a Daily Mail journalist might also be in first class and witness someone travelling on a cheap Advance, and then write a misleading newspaper story.

 

[edwin_m]

If someone is travelling First Class at employer's expense then presumably this is for the ability to do more work on the train for that employer - if it was a cheaper ticket in First then I assume it would still be with the railcard.

Therefore, if you decide to use the money to travel in Standard with a companion, your employer is not getting the benefit of the extra work. So I suggest (3) isn't claimable.

I think in that situation I'd claim the price of the equivalent one-person ticket, 75%, as that is what the employer would be paying. But only 50% each if the other person is claiming their travel from a different employer.

 

[robbeech]

Whilst I usually buy tickets for people working for me to save them the initial outlay (and I’d like to think I can source the most appropriate ticket more easily than them) I’d always be happy to reimburse any price they claim.

If a ticket is £90 or 2 tickets with a two together railcard for £60 each then they can send me a bill for £60 or £90, whichever they’re happy to do. I’d encourage them to charge £90.
Jobs are budgeted accordingly based on the full price. If I’ve left rail ticket purchasing up to them then it’s accepted that it’ll be based on the full fare, if they get it cheaper that’s great for them. If they want to pass the saving on that’s also fine.

I also don’t care if they manage to secure a cheap advance and charge me the full fare. However, it’s important they try to get to where they’re going on time, so saving £30 and getting a Grand Central advance would be a risk, if they throw in the towel because there is a Y in the day then it is no excuse for being 4 hours late if the ticket you’re being paid for would have allowed travel on other operators, I’d expect them to purchase another ticket here.

If I paid for someone’s railcard then I’d expect to see the savings back myself to the value of the railcard (the example above pays in just one journey) but after that it can be business as usual.

I’m not hugely fussy about expenses in general, people have them and charge them on. If they can benefit from something and it doesn’t cost me more then I really don’t care. If they can benefit significantly and it does cost me more then I encourage them to talk to me about it.

For example if there’s a gig in London but they’re going to Glasgow the day after for a gig for another company then I’d look at options to make their life easier. This may be cancelling their hotel on the night of the gig and getting them a ticket on the sleeper for example.

 

[Puffing Devil]

There may be tax implications for the railcard if used for private trips. If the company can make legitimate savings using a two-together, or any other, railcard, they should purchase one and specifically state to the employee that it is for business use only.

If the employee uses a railcard for the employer's benefit, that is their choice.

 

[bspahh]

I have claimed a Network railcard for a work trip when my one had expired, and the saving for the work ticket paid for the cost of the railcard.

If I use a railcard that I already own, I would claim for the cost of the ticket that I used, and not what it could have cost.

My employer once paid for flights for me, my wife and 2 kids to Canada. We were on a budget flight, staying over a weekend, and it was cheaper for all 4 of us, than a midweek flight for just me, which I would have used if they had not come. I asked the management before claiming for those tickets.

 

[island]

The claimable amount is the amount printed on/paid for the ticket used by the employee.

If the other passenger was not an employee, the employer reimbursing any of their fare would create an income tax liability.

It is of course open to the employer to reimburse more than the employee is entitled to, and either deduct tax from the excess or gross-up the payment.

 

[4COR]

My wife successfully managed to get a Network railcard covered by an expenses claim under the argument that it was a journey she would take many times in a year, and the cost of the railcard would be outweighed by the savings made on the journeys.

However, I am fairly sure my employer would most definitely not reimburse, as they would claim that it is usable outside of work and would therefore become a taxable benefit - despite the potential to save money, they would just not do it because it's too complicated. (On which note, we are encouraged to save money while travelling, but to also book through a dedicated provider - including rail and air - even though I know I can book tickets cheaper elsewhere).

2. Another argument could be that you should get 75% of the ticket price since that is what the ticket would cost without the railcard for one person
3. A final argument is that 100% of it should be reimbursed since (in a detail left out) the employee would otherwise be travelling first class and in the circumstances of this ticket a single first class ticket is more expensive than the two together standard tickets

We have some specific examples in our expensing guide that cover some scenarios like this (including sharing accommodation with non-employees, travel in shared vehicles, staying with family, sharing meals, etc), and each one is a no - even though the cost might be the same in the end, or you might be saving the employer money, you can't claim for what isn't your own legitimate expense - that means the cost of the travel for your ticket alone in this case.

Also, First Class travel for work? Haha! (Most definitely a no!)

 

[Adam Williams]

However, I am fairly sure my employer would most definitely not reimburse, as they would claim that it is usable outside of work and would therefore become a taxable benefit

Well, they're wrong. There's no tax payable on a trivial benefit, which a railcard will always be unless RDG hike up the price considerably.

 

[4COR]

Well, they're wrong. There's no tax payable on a trivial benefit, which a railcard will always be unless RDG hike up the price considerably.

They may well be wrong, but I am fairly certain that that would be their answer...

EDIT: In fact having even checked just now in the expenses guide, the example of a railcard being a specific taxable benefit as it may be used for personal travel is given in the guide!!

 

[island]

Well, they're wrong.

No. They're not.

There's no tax payable on a trivial benefit,

There is indeed no tax payable on a trivial benefit, but a trivial benefit cannot be cash, and cannot be a reimbursement. See HMRC manuals EIM21864 and onward. The employer would have to buy the Railcard directly (or perhaps via a voucher scheme) for the trivial benefit rules to be engaged, as opposed to reimbursing it.

which a railcard will always be unless RDG hike up the price considerably.

The cut off for a trivial benefit is £50 so I guess it depends on your definition of "considerably".

 

[Bletchleyite]

We have some specific examples in our expensing guide that cover some scenarios like this (including sharing accommodation with non-employees, travel in shared vehicles, staying with family, sharing meals, etc), and each one is a no

Guess your employer has gone for the simple option, but there is scope for expensing all of those things. Not every employer pays to the full extent of HMRC legal allowances, for instance mine doesn't pay lunches on a trip.

To use one example of those, a former employer had a specific allowance per day for staying with friends/family on a trip where a hotel and meals would otherwise be funded. It wasn't very much (presumably to ensure it did only cover additional costs of the employee staying) but it did exist.

No. They're not. You are.

The actual answer is there's no tax payable as a trivial if the employer buys the Railcard directly, or via a voucher scheme. A trivial benefit cannot be cash, and cannot be a reimbursement. See HMRC manuals EIM21864 and onward.

The cut off for a trivial benefit is £50 so I guess it depends on your definition of "considerably".

A 2 Together or Family might be an exception to this, but if the business paid for a Network Railcard (say) it's going to be impossible to prove it wasn't only used for business purposes. It's not something the HMRC is going to bother with.

 

[island]

A 2 Together or Family might be an exception to this, but if the business paid for a Network Railcard (say) it's going to be impossible to prove it wasn't only used for business purposes. It's not something the HMRC is going to bother with.

Whether HMRC will "bother with" something doesn't affect the legality, and the legality is clear: to qualify for tax exemption the employer must buy the Railcard directly (or via a voucher scheme) as opposed to reimbursing its cost.

 

[4COR]

There is indeed no tax payable on a trivial benefit, but a trivial benefit cannot be cash, and cannot be a reimbursement. See HMRC manuals EIM21864 and onward. The employer would have to buy the Railcard directly (or perhaps via a voucher scheme) for the trivial benefit rules to be engaged, as opposed to reimbursing it.

Oddly, our guide even states in the example: "if <employer> purchases a railcard for an employee" - which on this grounds appears to even rule out the direct purchase rule to allow the Trivial Expenses application (this is in our guide) - they may be wrong here, but it's an argument that frankly isn't worth taking on with Finance!

Not every employer pays to the full extent of HMRC legal allowances, for instance mine doesn't pay lunches on a trip.

At least I do get fed! (Not that I personally travel much at all...)

 

[DaveB10780]

We get a princely £30 for staying with family. It was this amount 20 years ago so has degraded slightly. However the benefit of not staying in a hotel when in London is considerable for my sanity and well being.

 

[Bletchleyite]

Whether HMRC will "bother with" something doesn't affect the legality

Well, it does and it doesn't. There is the old adage that "it's only illegal if you get caught", and there are plenty of things that are quite minor where you're just not going to get caught because they're so minor they're not worthy of attention. Thus the Railcard may be purchased and the employee informed it's for business use only, but there's basically no way to (a) prevent or (b) know about other use, unless you do something very inconvenient like only physically issue it when a work journey is booked, but unless the employee is based in one office and the same location Finance or HR are based to keep it safe then that's unlikely.

I suspect, for instance, that unless they did something else to annoy a Police Officer and they needed to find something to get them on, nobody has ever been prosecuted for driving at 71mph on a motorway.

 

[Titfield]

Expenses always produce a wide range of views.

My current employer reimburses me for my railcard as it is in their financial interest for me to have a railcard. This is a taxable benefit which I am happy to pay as I have used the card for personal travel on more than once occasion.

If I stay in a hotel and take my partner I am scrupulous in making sure that no cost for my partner (for example breakfast) is billed to my employer. I pay for it at reception.

My employers travel policy is that we must not arrange travel in such a way that we derive an additional personal benefit. If in doubt we have to get permission from the budget holder.

There can be shades of grey but I value my reputation highly and would not wish a minor pecuniary or other benefit to me mean that my reputation is tarnished.

 

[jfollows]

As an employee I claimed the actual cost of my ticket, in other words 50% of the total cost of the two tickets, because it was clear and unequivocal. I wouldn't have attempted to claim more or the cost of the railcard. But some peoples' relationships with their employer might have enabled them to do so. The railcard benefit was the reduction of the second fare, plus a reduction in the fare I claimed through my employer (their benefit, not mine).
When I ran my own company I designated my partner on the railcard as company secretary and claimed for both of our fares when travelling together. HMRC would have no issue with this, I don’t think. Obviously only on business trips.

 

[spag23]

Another (related) scenario. I used to work for a large, well known outfit with premises in central and west London. I bought my own season tickets from Hertfordshire into London, including Zones 1-6. But my work often involved travelling between several sites in London. I obviously used my season ticket for these business journeys. But I never apportioned these elements, and didn't claim for them. My employer would have reimbursed me had I paid per trip (eg Oyster). So they got the full benefit of my £4000/year personal expenditure. And no, for the last few years I didn't even take advantage of their interest free annual season ticket loan; stretched monthlies worked out cheaper.
Should I have claimed? (Too late now!)

 

[island]

Oddly, our guide even states in the example: "if <employer> purchases a railcard for an employee" - which on this grounds appears to even rule out the direct purchase rule to allow the Trivial Expenses application (this is in our guide) - they may be wrong here, but it's an argument that frankly isn't worth taking on with Finance!

Employers are of course allowed to run stricter policies than HMRC.

 

[87 027]

My employer allows reclaiming the cost of a railcard if it results in a saving to the office, but it is treated as a taxable benefit and reimbursement is processed via the payroll so the appropriate deductions can be accounted for.

 

[Egg Centric]

I can't follow what this means.

The employee would usually travel first class and expense it, but because the employee is going to be paying some proportion of the ticket for the other person to travel with them (or certainly would if they were both travelling first) said employee miraculously discovers that he is capable of travelling standard (there is another reason too to do with physical dimensions of the employee and person they would be travelling with).

Quite interesting that there are differing views here on what's reasonable, but not surprising!

(The tax position is also interesting but I don't consider HMRC much of an arbiter on what's reasonable. If they're reading then my orbea on cycle to work is totally legit, me living 250 miles from the office is just one of those things)

 

[4COR]

(The tax position is also interesting but I don't consider HMRC much of an arbiter on what's reasonable. If they're reading then my orbea on cycle to work is totally legit, me living 250 miles from the office is just one of those things)

It's just a circular commute, no? (Make sure there's not a negative easement enforced for it )

HMRC create the rules - the company has to follow them, and (working for such an employer) some are very risk averse. While you might not have issues, HMRC are not an entity I would like to have an argument with...

 

[Egg Centric]

HMRC create the rules - the company has to follow them, and (working for such an employer) some are very risk averse. While you might not have issues, HMRC are not an entity I would like to have an argument with...

I fully agree but ultimately they make the tax rules, the company can do whatever it likes about expenses (including making things whole if the expense isn't treated as one).