“We have recently been advised that we cannot pay our NED’s mileage expenses for attendance at our monthly Board Meetings which are held at our headquarters every time. The reason for this is that this is their “normal place of work” and that therefore this is a taxable benefit.
The NED’s normally only attend for the purpose of a Board Meeting and have no office facilities within the offices.
Has anybody else encountered this?”
Certainly not an issue about actually paying the mileage expense. Whether it is construed as a benefit in kind is debateable. Our view of it is that it is a business expense of the NEDs. Most have their business address situated elsewhere,whether it be at home or office. It also helps that our Bd meetings rotate from venue to venue.
I haven’t encountered this,but would suggest that you take a look at an HMR&C publication: Employee Travel – a tax and NIC guide. This outlines various exemptions – e.g. where it is a ‘temporary’ workplace, or where an employee spends less than 40% of their time at that place – which might apply.
I don’t think it is normal to regard the company’s offices as the non-executives’ place of work even if you have board meetings there – presumably they read the papers at home or elsewhere. However, we have only two board meetings a year at our offices and the rest elsewhere so we have not had this issue in practice.
In the past we have argued that their normal place of work was their home address.
It has helped that we move the board meetings around and some of the NEDs are employed under “consultancy agreements” with specific companies.
One would argue that one day a month does not constitute a normal place of work?
I don’t see why you cannot pay the mileage, but it sounds correct that it is a benefit in kind. Either the NED has a P11D entry (not recommended!) or the amount can be settled by the company on their behalf. Any decision ‘not to pay’ must be a policy one not a tax one I think.