Mobility allowance by receipts and then the rest taxed?

Mobility allowance by receipts and then the rest taxed?

Dear MC fellows,

as we discussed in several other posts, in many countries we receive the mobility allowance taxed, while it is meant to be tax free by the European Commission. So far, I receive it taxed here in the UK.

My host institution recently offered me that I could get the mobility allowance tax-free as reimbursement of receipts. I read in this forum that also other people received this offer. However this would be a problem for the host institution, since they must pay to us the WHOLE mobility allowance. 
On page 5 of Annex III to my Grant Agreement it says that the payment arrangements must provide "for payment of the full amounts allocated for the benefit of the researcher".

This is a problem for them, but might be interesting for us. :-) Infact, if we get some mobility allowance untaxed by means of  receipts and the rest taxed we would pay less taxes on it.

My grant agreement states the following:

"Monthly Mobility Allowance: flat rate allowance to cover expenses linked to the personal household, relocation and travel expenses of the researcher and her/his family in the host country".

I asked my host institution which receipts can be refundable and they said only travel. Household (i.e. rent or other housing expenses) would not be refundable. Now they want to back up from their offer to do the mobility allowance on receipt: it would be too much work for them, they prefer me to get it taxed and basta. My supervisor wrote to them asking a list of the expenses which can be receipted, so that I can better decide what do, and they did not answer.

Tomorrow I should be called back from someone from the tax office in the UK (Her Majesty Revenue and Custom, HMRC). Today he told me that he thinks the mobility allowance should not be taxed, he is going to investigate the issue better tomorrow. Let's see what will happen...

In any case, did anyone of you get the mobility allowance by receipts? In case the receipts did not cover the whole allowance, did you get the rest taxed with your salary? Did you get it at the end of the project? This would not be convenient, since if you get a large sum alltogether you have to pay more taxes on it. However the Grant Agreement requires a "Monthly" mobility allowance.

All this absurd problems could be avoided if the mobility allowance would be just untaxed, as I received it in my previous MC IEF in Germany.

Looking forward to hear your feedback and experiences.

Ciao,

Maria Paola