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  • Income tax payable on expenses?
  • Premier Icon mrsflash
    Free Member

    I have never paid income tax on any expenses, I just get the money paid straight back into my account – GF does get taxed on his expenses. Is there a rule?

    Premier Icon druidh
    Free Member

    There can be. For stuff like mileage (and some other things), there’s a govt. approved rate. If you get more than that rate, you have to pay tax.

    Premier Icon mrsflash
    Free Member

    ah maybe that’s the difference, mine are rarely for mileage they’re for flights / meals etc. His are mostly for mileage.

    Premier Icon -m-
    Free Member

    Essentially tax will be due anywhere that the expense payments received are in excess of the costs incurred (i.e. if you make a profit, which HMRC then considers another source of income).

    In the case of some things, such as mileage (as above), the rate at which you can claim your ‘costs’ is specified.

    There is also the issue of whether the expense was wholly and reasonably incurred in relation to your work.

    If you’re in any doubt there’s normally plenty of advice/guidance on the HMRC website

    Premier Icon woody2000
    Full Member

    Or could they be adding his expenses to his salary and taxing him incorrectly?

    Premier Icon uplink
    Free Member

    We used to get cash for nights away [where we found our own digs]
    At the time I think we could get £50 like this tax free – anything over that was taxed

    Premier Icon mrsflash
    Free Member

    hmm, possibly woody, I’ll check.

    Premier Icon stealthcat
    Full Member

    IIRC, mileage is taxable on anything over 40p/mile, and I think if you do more than 10,000 miles/year, the excess is at a lower tax-free rate, if that makes sense.

    HMRC website is pretty good on expenses information if you need it.

    Premier Icon oldagedpredator
    Full Member

    I get taxed if I’m under a certain distance or time away from the office.

Viewing 9 posts - 1 through 9 (of 9 total)

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