Paying tax on my expenses

acstokes

All,

My wage is right on the line between paying 20% and 40% tax. I have company expenses which i file receipts for, either from my own debit or credit card, and my employer pays them. However, my employer pays them every month and every month a file around £500 in expenses...this, over the course of a year, is going to push me into the 40% tax bracket and cost me more in tax...

Advise greatly appreciated....

CLAPTON

usually genuine expenses are paid without tax being deducted

why do you think yours are taxed?

flashg67

You've already earned & been taxed on the money you claim as expenses so they aren't additional income and not taxable again - or am I misunderstanding what expenses are? In essence, you're paying for something on behalf of your employer, and they then pay you back?

Mikeyorks

Is the usual. It's only where there's an element of 'benefit in kind' that the expenses are taxed. Which appears not to be the case here.

acstokes

CLAPTON wrote: »

why do you think yours are taxed?

Due to my lack of knowledge in this area. I assumed that my employer was paying me my monthly wages + expenses - tax/ni = take home pay


i then came to the conclusion that this figure would take me into the 40% tax bracket.


to clarify for the rest of the respondees, my expenses are fuel/train tickets/hotels/food due to business related journeys that incur the aforementioned costs.


cheers

pjclar02

Hello there

On your payslips, you should see a "total gross" figure which may include the expenses reimbursed. However, there will also be a "taxable gross" figure which is the amount on which you pay tax. This amount will exclude your expense reimbursements, so it is this figure you are looking for to determine whether you are into higher rate territory.

Hope this helps

nearlyrich

Even if you do go into the 40% tax bracket you only pay 40% tax on the amount above the line not on all your income.

CLAPTON

acstokes wrote: »

Due to my lack of knowledge in this area. I assumed that my employer was paying me my monthly wages + expenses - tax/ni = take home pay


i then came to the conclusion that this figure would take me into the 40% tax bracket.


to clarify for the rest of the respondees, my expenses are fuel/train tickets/hotels/food due to business related journeys that incur the aforementioned costs.


cheers

if you want to post up the figures I'm sure we could check them for you

zorber

Shouldnt be taxable expenses mine arnt taxed

thenudeone

The only time expenses are taxable is if they are a "benefit in kind" for example, a private medical bill; or are over the published HMRC allowances (for example if your employer pays you 60p a mile for travelling, or an "overnight allowance" without requiring proof of actual expenditure).

Even then, it's not always straightforward. For example, if you need to run a luxury car for business purposes, the standard HMRC rates may not cover the costs adequately, so you could approach HMRC to agree on a higher rate.

prowla

Expenses aren't income - they are reimbursements for money you have effectively lent your employer.