Have been taxed on expenses, advise please

absfabs

Hi, not sure if to post this here or on tax board, but hope someone will know the answers to the following 2 questions:

Am currently working for an agency, and apart from hours worked I am also paid a mileage allowance for travelling. Should this be subject to income tax and deductions? I think I was taxed on the lot last month.

And what about direct expenses, such as hotel cost or purchasing necessary replacement equipment, surely that must be tax exempt? (They haven't taxed me for this so far, just want to be prepared as I am submitting time sheets, etc today, and on there it is just totalled up together with payable hours..)

Would be grateful if someone could point me to a quotable source, so I can argue my point!

Thanks for looking!

safesound

As for whether its legal or not, I don't know but my husband gets charged tax on any expenses submitted to his company too.

fengirl_2

If you are being paid to get from home to work, then this is taxable. However, if you are being paid for travel between sites, then you can receive up to 40p per mile tax free.
Again, hotel costs would depend on why its being paid - are you travelling around with the job and having to stay away overnight? If so, then this is not taxable, and neither is the purchase of equipment which work reimburses.

absfabs

Thanks fengirl, that clarifies it for me.

The payable mileage is mostly from home to work, exluding first 20 miles, and return. Can be quite long distances, though, therefore requiring overnight stay at times.

Will check that allowances for hotel and food when staying away and work purchases are not included in "gross for tax".

Thanks.

safesound

Are you sure Fengirl? My husband quite often purchases such things as batteries etc and occasionally such things as drills, overalls, shoes etc and then claims the money back via expenses and is always taxed on it (so much so he begrudges doing it). I wonder where I could find out more information hmmm....

fengirl_2

safesound - your husband should not be taxed on things he is buying on behalf of his employer! I bet the employer is claiming tax relief in his accounts for these items as well! He needs to speak to his finance dept.

cazziebo

Look at https://www.hmrc.gov.uk. Expenses should be untaxed if...


Paid by the employer
These must be

wholly, exclusively and necessarily incurred during the employment
made solely because of the employment
not usually subject to tax

safesound - if these items are solely for his work, and not for personal use, then he should not be taxed. He should raise this with his employer immediately.

safesound

Apparently (I've had a chance to speak to him) service staff get taxed but sales staff and management dont. He says he has spoken to the finance dept and they say they understand its happening but it happens to all the service staff so they wont do anything about it. :mad: This is an international company too.
I've told him to refuse to buy anything in future, and if he needs it to do the job then he doesn't do the job until its bought for him.

cazziebo

safesound wrote: »

Apparently (I've had a chance to speak to him) service staff get taxed but sales staff and management dont. He says he has spoken to the finance dept and they say they understand its happening but it happens to all the service staff so they wont do anything about it. :mad: This is an international company too.
I've told him to refuse to buy anything in future, and if he needs it to do the job then he doesn't do the job until its bought for him.

Unless there is a very good reason for this then he should raise a grievance...

ohreally

safesound wrote: »

My husband quite often purchases such things as overalls, shoes etc and then claims the money back via expenses and is always taxed on it (so much so he begrudges doing it). I wonder where I could find out more information hmmm....

If any equipment is for health and safety then the employer must purchase these items and supply them to the employee free of charge.

Edit; concerning expenses and tax liability...
http://www.hmrc.gov.uk/helpsheets/490.pdf