More Tax Tips for Employees

More Tax Tips for Employees

Travel to and from work

The cost of travelling in the performance of the duties of your employment is allowable. (Section 337 ITEPA 2003). However, the cost of travel between your home and the place of your employment is not allowable.

You can claim for some travel if you can bring your circumstances in line with the facts in the case of Pook -v- Owen 45 TC 571. The Doctor in this case held appointments as an obstetrician and an anaesthetist at a hospital 15 miles from his home. When on standby, he was consulted as necessary on the telephone. He would instruct the hospital staff before driving to the hospital.

The House of Lords allowed the costs of this travel on the grounds that his duties began when he received the telephone call from the hospital.

You cannot claim for the cost of travel to your permanent workplace but travel between workplaces and where you travel to a temporary workplace is allowable.

A temporary workplace is where you work temporarily at a place for less than 24 months. If the contract is for a period of less than 24 months that becomes a permanent workplace (Sections 338 & 339 ITEPA 2003).

HMRC continue to pay attention to the travel costs of the self-employed and in a recent case they challenged the business base claiming it was not at the taxpayer’s home. The Tribunal found against them following the case of Horton v Young 40 TC 60.

Personal incidental expenses

When you work away from home regularly and need to stay in hotels in the UK, you can be paid a flat rate of A�5 per night tax free and without this having to be declared for tax. Employees working outside the UK can receive up to A�10 per night.

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This allowance is to cover such things as laundry, newspapers, telephone calls home and a reasonable level of refreshment, both alcoholic and non-alcoholic.

See the Guidance notes for employers, Press Release May 16, 1995. A�5 is not a lot but asI have said elsewhere, many small amounts added together are worthwhile in total (Section 268 ITEPA 2003).

Fuel rate

If you pay for the fuel in your company car or you are required to reimburse the cost of fuel used for private journeys there is an HMRC approved scale and from Ist June, 2011 and are as follows.

Engine size 1,400cc or less, Petrol 15p, Diesel 12p, LPG 11p.

Engine size 1401 to 2,000 cc Petrol 18p, Diesel 15p, LPG 13p.

Engine size over 2,000cc Petrol 26p, Diesel 18p, LPG 18p

Records

Keep accurate mileage records. Record all mileage so you are able to prove the business mileage.

Where your employer pays you less than the authorised mileage rate remember to make a claim to HMRC in respect of the difference and claim for all the years in date.