Fixed deductions for expenses

Produced by a Tolley Employment Tax expert
Employment Tax
Guidance

Fixed deductions for expenses

Produced by a Tolley Employment Tax expert
Employment Tax
Guidance
imgtext

Introduction

In certain circumstances, HMRC can agree an appropriate fixed rate amount (also called a flat rate expense) which can be deducted from earnings for tax purposes. These typically refer to certain classes of employees who are required to incur expenditure on things such as tools and clothing.

For example, firefighters are entitled to a flat-rate allowance on the costs of cleaning and maintaining their uniforms where laundry services are not provided by their employers.

These amounts should not be confused with round sum allowances which are discussed in the Round sum allowances guidance note which are generally treated as taxable income for the employee.

Fixed deductions do not include the approved mileage rate for business travel using the employee’s own car. This is treated as business travel, see the Fuel-related payments / mileage payments guidance note.

Fixed rate deductions

HMRC can agree fixed sum deductions that are negotiated with trade unions to apply to certain classes of employees. These are rates that employers may pay free of PAYE and reporting requirements, or that an employee

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+
  • 28 Feb 2024 13:40

Popular Articles

Group relief for carried-forward losses

Group relief for carried-forward lossesThis guidance note examines in detail the relief available to groups for carried-forward losses. The scope excludes the treatment of specialist businesses such as banks, insurance companies and oil and gas companies.From 1 April 2017, companies can surrender

14 Jul 2020 11:50 | Produced by Tolley Read more Read more

Ministers of religion

Ministers of religionMost ministers of religion or members of the clergy are either office-holders or employees and so their earnings are taxable under ITEPA 2003 as employment income and are subject to Class 1 National Insurance.For the purposes of the tax system, a minister does not have to belong

14 Jul 2020 12:14 | Produced by Tolley Read more Read more

Corporate interest restriction ― administrative aspects

Corporate interest restriction ― administrative aspectsThe corporate interest restriction (CIR) regime has some specific administrative rules in addition to the general administrative requirements for corporation tax returns. This guidance note does not include commentary on provisions that are

14 Jul 2020 11:19 | Produced by Tolley Read more Read more