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Remove or extend the time period on tax free relocation allowances

Comment 6th July 2010

Current HMRC rules around relocation policy is set at a maximum of £8,500 tax free alowance if you move to a new job within 1 year of the offer but with provision for parents of school children to apply for it beyond the year limit which can be granted at HMRC discretion. 

However, what about those people with caring responsiblities ? I delayed a relocation – offered by my employer – for 2/3 years in oreder to continue to provide respite care and a roof over the heads of my elderly parents, one of whom was diagniosed with Alzheimers. Instead I rented accommodation whilst returning home each week end to continue to support my elderly father's care of my mother.

Both parents (in their 80's) died within 6 months of each other and I was eventually able to move to once I had sold. However I was denied the tax free element (on the first £8,500 of the relocation) because of the current regulations. I was informed by HMRC reps that I should have a) turned down the new job offer (a promotion) at the time, b) moved my parents with me or c) put my parents into a home.

So here's my ideas:-

1) get rid of the time limit – its disciminatory and does not incenitivise people to be move to where the work is if they have family commitments. Instead regulate the number of times you can caim it by employer; and

2) an £8,500 tax free allowance for a full relocation is way out of date and needs increasing. 

  

Why does this matter?

Current rules are outdated and discriminatory to carers of adults, and with the ageing population this is likely to affect more and more people. Additional tax relief would encourage people to move where work is more readily available. If the company is willing topay more, then the governemnts/rules should play their part in supporting that indidivudal to move via an increases and more realsitic tax free allowance.    

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