The following Employment Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
In order for an expense to be tax deductible it must be incurred because of an employee’s employment. Any non-business related expense is, therefore, not relievable except in some very particular circumstances.
This guidance note deals with three separate issues. The first is where an expense has both a business and private element. In this case some, or indeed all, of the expense may be allowable. The second case is where an expense must be treated as a non-business expense and is not deductible for tax purposes. The third is expenditure which appears on principles to be non-business yet qualifies as non-taxable, usually due to statutory provision or HMRC concession.
In order to claim a deduction for tax purposes, the expenditure must be incurred ‘wholly, exclusively and necessarily in the performance of the duties of the employment’. This is discussed in the Business expenses ― general rule guidance note. If an expense is not incurred for these reasons then it is disallowed.
However, despite the strictness of this test, it is understood that there are instances where obviously business-related expenditure has some private usage. In these instances, the full amount or an element of it may be deductible.
HMRC guidance is at EIM31660 onwards.
The case law in the area of duality of purpose is often contradictory and appears to lack a clear line of precedence which would provide a simple answer with regard to possible problem areas. In practice, it is often the case that you would have to look for a case which has similar facts in order to understand the taxable status of a particular item of expenditure.
For example, an employee may be provided with a laptop computer in order to carry out his duties of employment. It is likely that the employer will have a policy restricting the private use or certain types of use of the laptop. Private use of the laptop is, however, unlikely to be precluded by the employer. Indeed it
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
IntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeWithholding tax may be reduced under double tax treaties (DTT) or European directives, both of which may be subject to making a formal claim.This guidance note outlines the rules for UK withholding tax, and
This guidance note explains how to calculate the amount of tax that arises under the lifetime charge. In general terms the lifetime charge will apply to individuals who transfer property into a trust that is subject to the relevant property regime. See the Chargeable transfers and Occasions of
This guidance note considers the capital gains tax implications where shares are sold in exchange for new shares.The consideration paid by a purchasing company to the shareholder(s) for their shares in a target company could be in the form of either:•new shares in the vendor in exchange for shares
This guidance note provides an overview of the steps businesses need to take if aspects of their business change, and as a result, they need to notify HMRC about the change.Changes to name and / or addressIf a business changes its name and / or its address then it is required to notify HMRC of the
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.