Help with Tax

Sad_Boro_Boy

I used to run my own business but left everything to my Accountant - so am a bit ignorant and I am now trying to get tax-wise!

I started with another company at a salary of £28,000 who pay all my Tax, NI etc. BUT "to save themselves a bit of NI, etc" they decided (with my compliance) to pay me £200 per month for the upkeep of the computers that I own (and still own) and do all of my work on.

I have paid out some "bits & pieces" on the upkeep such as cartridges, some software - but not a lot.

Can anyone tell me how best to reduce the amount of tax I will pay on this additional money I receive as I need to complete a return for 08/09 and don't want to miss out on any (legal) tricks!

Thanks

ciscosurplus

I assume the employer is classing this as an "allowance" most certainly you would have to pay tax on this. It is likely the employer would put this on your P11D and one of the questions is was it wholly and exclusively for business use, the fact you have admitted you own the computer equipment means that this allowance is a BIK (Benefit in Kind). I would suggest it would be classed the same as a car allowance or a location allowance which will attract TAX. I can't post links as I have not made enough posts but have a look a directgov website which have some very useful information.

It may however be possible that your employer has a "dispensation" have a look at this on the HMRC website but this is more to save a company corporation tax, I also don't see a reference to a computer allowance.

fengirl_2

As this allowance is not straight reimbursement of expenses, I would say the £200 should be included with your wages and taxed accordingly. Failing that it should be shown on a P11d as the previous answer states - but it will land you with a heck of a tax bill at the end of each year. The only expenditure which would qualify against this is, as you say, ink cartridges, etc. And if you are not contracted to work at home, your employer would probably need to be prepared to provide confirmation that you are required to use your home computer for work, if challenged.

Sad_Boro_Boy

Thanks both for the info......will go away and ask questions and find out more....