The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
Taxable earnings less allowable deductions (from the same employment) gives net taxable earnings for the year. See the Employment income guidance note for a definition of taxable earnings. If the allowable deductions exceed the taxable earnings, the net taxable earnings figure is nil. It is not possible to have negative net taxable earnings.
However, a claim can be made for excess allowable deductions to be set against total income (a step 2 deduction, see the Proforma income tax calculation guidance note). See Simon’s Taxes E4.799 (subscription sensitive).
Allowable deductions from employment income broadly fall into five main categories:
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