Hi- I'm hoping for some help please.

I am about to take on a payroll where the business currently offers transport to various work sites for the workers, and then deducts/recoups the cost of providing transport to work from the workers.  It is not compulsory for the workers to use the company transport, they can make their own way to work, albeit some of the locations are outside the realms of public transport.  If they don't use the company transport then there is no deduction for it.

They are recovering the travel charge as a gross deduction.  I am struggling to get onboard with this being the correct way of doing it.  Surely it should be a net deduction?  They always do a check to make sure these deductions don't take the staff below NMW, and top them back up to NMW if that is the case.

They are telling me that taking the money from the net pay effectively then makes the fleet of company cars and drivers a 'taxi' service, which brings it's own host of issues with licencing etc etc

I don't know if they have had a recent HMRC inspection, but I can't see HMRC being thrilled with a reduction to gross, and therefore reduction to Tax and NI liability?

Does anyone else operate a similar scheme?  Or is able to point me to clear direction from HMRC please?  

Thanks in advance.

Deductions from gross don't seem right. My thinking is the same, it should be net deductions for tax and NI.