Income Tax: how does it work?

Discussion in 'UK Finance' started by Leo, Jun 20, 2008.

  1. Leo

    Leo Guest

    This is going to sound like a stupid question, but I've just moved to
    the UK and I have no idea how the income tax system can work if no-one
    files tax returns - and no-one seems to be doing it. Everyone I ask,
    including my employer, just says, oh, you won't need to do that. How
    does the government know how much tax I'm supposed to pay (I can
    understand that they know how much I have already paid)? What if I've
    paid too much? What if I haven't paid enough?

    I've already worked out that work expenses aren't tax deductible, but
    aren't there different rates or rebates if you're married (for
    example) or have interest from savings, or, well, whatever?

    Leo.
     
    Leo, Jun 20, 2008
    #1
    1. Advertisements

  2. Leo wrote:

    > This is going to sound like a stupid question, but I've just moved to
    > the UK and I have no idea how the income tax system can work if no-one
    > files tax returns - and no-one seems to be doing it. Everyone I ask,
    > including my employer, just says, oh, you won't need to do that. How
    > does the government know how much tax I'm supposed to pay (I can
    > understand that they know how much I have already paid)? What if I've
    > paid too much? What if I haven't paid enough?


    You can always file one if you want to.

    Your employer sends information to the tax man about how much you earn,
    and deducts what he thinks will be the right amount of tax.

    > I've already worked out that work expenses aren't tax deductible,


    Oh but they are.

    > but
    > aren't there different rates or rebates if you're married (for
    > example)


    Not any more.

    > or have interest from savings, or, well, whatever?


    Interest from savings normally already has tax taken off at source.
    Only if you're a higher-rate taxpayer would you need to pay extra tax
    on your interest.
     
    Ronald Raygun, Jun 20, 2008
    #2
    1. Advertisements

  3. Leo

    Rob graham Guest

    > Interest from savings normally already has tax taken off at source.
    > Only if you're a higher-rate taxpayer would you need to pay extra tax
    > on your interest.
    >


    Some National Savings can be a problem here.

    Rob Graham
     
    Rob graham, Jun 20, 2008
    #3
  4. Leo

    Daytona Guest

    On Jun 20, 3:51 pm, Leo <> wrote:
    > This is going to sound like a stupid question, but I've just moved to
    > the UK and I have no idea how the income tax system can work if no-one
    > files tax returns - and no-one seems to be doing it.


    Pay As You Earn (PAYE) is the system -
    http://www.google.co.uk/search?hl=en&q=PAYE&meta=cr=countryUK|countryGB

    Daytona
     
    Daytona, Jun 20, 2008
    #4
  5. Bitstring <>, from the wonderful
    person Rob graham <> said
    >> Interest from savings normally already has tax taken off at source.
    >> Only if you're a higher-rate taxpayer would you need to pay extra tax
    >> on your interest.
    >>

    >
    >Some National Savings can be a problem here.


    And some Gilts purchased via POs in days gone by ..

    --
    GSV Three Minds in a Can
    11,952 Km walked. 2,380 Km PROWs surveyed. 43.0% complete.
     
    GSV Three Minds in a Can, Jun 20, 2008
    #5
  6. Leo

    Rich Guest

    "> This is going to sound like a stupid question, but I've just moved to
    > the UK and I have no idea how the income tax system can work if no-one
    > files tax returns - and no-one seems to be doing it. Everyone I ask,
    > including my employer, just says, oh, you won't need to do that. How
    > does the government know how much tax I'm supposed to pay (I can
    > understand that they know how much I have already paid)? What if I've
    > paid too much? What if I haven't paid enough?
    >
    > I've already worked out that work expenses aren't tax deductible, but
    > aren't there different rates or rebates if you're married (for
    > example) or have interest from savings, or, well, whatever?
    >
    > Leo.


    Leo,

    This page has all the tax answers you probably need:-

    http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/index.htm

    It's an official UK Government site, and has good info.

    --
    Rich
    http://www.richdavies.com/saving-money.htm

    ** Posted from http://www.teranews.com **
     
    Rich, Jun 21, 2008
    #6
  7. Leo

    Andy Pandy Guest

    "Leo" <> wrote in message
    news:...
    > This is going to sound like a stupid question, but I've just moved to
    > the UK and I have no idea how the income tax system can work if no-one
    > files tax returns - and no-one seems to be doing it. Everyone I ask,
    > including my employer, just says, oh, you won't need to do that. How
    > does the government know how much tax I'm supposed to pay (I can
    > understand that they know how much I have already paid)? What if I've
    > paid too much? What if I haven't paid enough?
    >
    > I've already worked out that work expenses aren't tax deductible, but
    > aren't there different rates or rebates if you're married (for
    > example) or have interest from savings, or, well, whatever?


    Compared to other countries the UK income tax system is a blunt instrument -
    it's fairly simple and for most employees who earn under about £40,000 it's all
    taken care of automatically. It's also strictly based on individual
    circumstances, there is *no* allowance whatsoever for being married or having
    kids.

    Because it's obviously nonsense to expect people with 4 kids to be able to
    afford the same tax as a single person on the same income, there is a separate
    system of "tax credits" which are payable to most people with children and some
    people without children on a low income. Despite the name, this has not linked
    with the income tax system and although it's run by the same govt dept, HMRC, it
    is a completely separate system which you need to make a separate claim for.

    Employment income is taxed through PAYE as others have said and savings income
    is taxed by the bank at the basic rate. So most people don't need to do tax
    returns.

    Some work expenses are tax deductible, but most of these would usually be paid
    by the employer direct to you as expenses without being taxed, assuming the
    employer has a "dispensation" which basically means his expenses get audited by
    HMRC to prove he's not paying taxable payments through expenses. If there is
    anything tax deductible which your employer isn't paying for, they will usually
    tell you about it. Travel to your normal place of work is *not* tax deductible.

    --
    Andy
     
    Andy Pandy, Jun 21, 2008
    #7
  8. Leo

    Leo Guest

    Thanks for the link, I'm working through it. As you say, should have
    all I need.

    What it seems to be saying is that, regarding income, I need to file a
    return only if my non-salary income takes me into a different tax band
    (ie above £36,000 or, below £2320). Otherwise I don't bother.

    But re: expenses, I've been told that the the criteria is "wholly,
    exclusively and necessarily" (or something like that), which means
    that nothing I spend qualifies because it's not "necessarily". For
    example, I go to a conference. I apply for funding to go (I'm an
    academic) but don't get it. I go anyway, because if I don't go to
    conferences I might as well kiss my career good-bye. It's wholly and
    exclusively part of my job, but since I wouldn't lose my job if I
    didn't go, it's not necessary and so not an expense. Same with
    computer software (I can always use an pencil and paper - but I can't
    claim for pencil and paper, because I should really just memorise the
    data), books and journal subscriptions (no-one's forcing me to read
    them, and if I really want to read them I can go to a library),
    membership of professional bodies (not necessary for the job itself),
    etc.

    Just some of the things that are tax-deductible in Australia, my last
    residence, but appear not to be here.

    Is this correct, or have I been misinformed?
     
    Leo, Jun 23, 2008
    #8
  9. Leo

    PeterSaxton Guest

    On 23 Jun, 13:19, Leo <> wrote:
    > Thanks for the link, I'm working through it. As you say, should have
    > all I need.
    >
    > What it seems to be saying is that, regarding income, I need to file a
    > return only if my non-salary income takes me into a different tax band
    > (ie above £36,000 or, below £2320). Otherwise I don't bother.
    >

    You need to file a tax return if you are requested to file one. You
    also have to tell HMRC of any new sources of income.

    > But re: expenses, I've been told that the the criteria is "wholly,
    > exclusively and necessarily" (or something like that), which means
    > that nothing I spend qualifies because it's not "necessarily". For
    > example, I go to a conference. I apply for funding to go (I'm an
    > academic) but don't get it. I go anyway, because if I don't go to
    > conferences I might as well kiss my career good-bye. It's wholly and
    > exclusively part of my job, but since I wouldn't lose my job if I
    > didn't go, it's not necessary and so not an expense. Same with
    > computer software (I can always use an pencil and paper - but I can't
    > claim for pencil and paper, because I should really just memorise the
    > data), books and journal subscriptions (no-one's forcing me to read
    > them, and if I really want to read them I can go to a library),
    > membership of professional bodies (not necessary for the job itself),
    > etc.
    >
    > Just some of the things that are tax-deductible in Australia, my last
    > residence, but appear not to be here.
    >
    > Is this correct, or have I been misinformed?


    You are right about the expenses.

    If these tools and expenses are necessary why doesn't your employer
    provide them?
     
    PeterSaxton, Jun 23, 2008
    #9
  10. Leo wrote:

    > What it seems to be saying is that, regarding income, I need to file a
    > return only if my non-salary income takes me into a different tax band
    > (ie above £36,000 or, below £2320). Otherwise I don't bother.


    Yes, or if you have other income which has not had tax deducted at
    source, for example if you write anything and the publisher pays
    you a fee.

    > But re: expenses, I've been told that the the criteria is "wholly,
    > exclusively and necessarily" (or something like that),


    That's correct for employment income. If you were self-employed,
    the "necessarily" part would be omitted. Bummer.

    > which means
    > that nothing I spend qualifies because it's not "necessarily".


    It's not a simple as that. I suspect you are imposing a stricter
    interpretation on "necessary" than is, er, necessary.

    > For
    > example, I go to a conference. I apply for funding to go (I'm an
    > academic) but don't get it. I go anyway, because if I don't go to
    > conferences I might as well kiss my career good-bye. It's wholly and
    > exclusively part of my job, but since I wouldn't lose my job if I
    > didn't go, it's not necessary and so not an expense.


    This is a difficult one. It's not even certain that going to a
    conference is part of your job at all, so in this case even the
    "wholly and exclusively" tests are likely not satisfied, and so
    there isn't even any point in wondering about the "necessarily" test.

    It's important also to distinguish between your actual job on the
    one hand, and your career on the other. Your career will span
    several jobs, and any expense incurred mainly for the purpose of
    furthering your career prospects is really of more benefit to you
    long-term than it is to your current short-term duties.

    If what you expect to learn at the conference is directly relevant
    to the research you are doing now, or if you are even contributing
    even is a small way to the conference, the expense may well qualify.
    But if your attendance is more for "networking" to benefit your
    future employability, it probably will not.

    > Same with
    > computer software (I can always use an pencil and paper - but I can't
    > claim for pencil and paper, because I should really just memorise the
    > data), books and journal subscriptions (no-one's forcing me to read
    > them, and if I really want to read them I can go to a library),
    > membership of professional bodies (not necessary for the job itself),
    > etc.


    This is where you're going too far. Membership of professional bodies
    generally *is* an allowable expense, including journal subscriptions.
    Most people don't claim for pencil and paper because it's too trivial
    (but I dare say most academics don't actually buy their own pecils and
    paper, but have them supplied free of charge by their employers).
    Likewise computers are generally supplied for your use, and you're not
    expected to pay for them.

    If there is a particular item of computer software which is necessary to
    help you carry out your duties more effectively or efficiently, I reckon
    it would generally pass the "necessarily" test. But what would count as
    evidence that it is indeed "necessary to help you ..."? It may well be
    the fact that the cost is reimbursed by your employer. If you buy it
    yourself, it may not be as necessary as all that. If it makes you more
    efficient, you will have more time to do something else. What will you
    do with that time? Go surfing? Then the expense would really have been
    incurred for your private benefit.
     
    Ronald Raygun, Jun 23, 2008
    #10
  11. Leo

    Martin Guest

    "Ronald Raygun" <> wrote in message
    news:bgQ7k.14425$...
    > Leo wrote:
    >
    >> What it seems to be saying is that, regarding income, I need to file a
    >> return only if my non-salary income takes me into a different tax band
    >> (ie above £36,000 or, below £2320). Otherwise I don't bother.

    >
    > Yes, or if you have other income which has not had tax deducted at
    > source, for example if you write anything and the publisher pays
    > you a fee.
    >
    >> But re: expenses, I've been told that the the criteria is "wholly,
    >> exclusively and necessarily" (or something like that),

    >
    > That's correct for employment income.


    Not quite... see
    http://www.hmrc.gov.uk/manuals/eimanual/EIM31811.htm

    Also, note that (a) once the travel qualifies for relief, then associated
    subsistence generally does, too; and (b) it is not "necessary" to use the
    cheapest method of transport.

    >> For
    >> example, I go to a conference. I apply for funding to go (I'm an
    >> academic) but don't get it. I go anyway, because if I don't go to
    >> conferences I might as well kiss my career good-bye. It's wholly and
    >> exclusively part of my job, but since I wouldn't lose my job if I
    >> didn't go, it's not necessary and so not an expense.


    I think you can reasonably take a different approach here. If your employer
    had reimbursed you, would you then be taxable on that reimbursement? From
    the academics I know, the answer is clearly "no". Hence, I cannot see why
    you cannot claim tax relief on the costs you incur in attending conferences.

    If HMRC contested the claim, I would argue that CPD is an integral and
    essential part of your job (which academic isn't expected to be "up to date"
    on stuff?). I would also point out that you are being paid to attend - i.e.
    you are not taking the days out of your annual holiday entitlment.

    I strongly recommend you go here...

    http://www.hmrc.gov.uk/manuals/eimanual/EIM70199.htm

    .... then click on EIM70695 and all the sub-sections which apply to whichever
    areas of academia are relevant to you.

    That said, I'm very surprised the academic body which employs you doesn't
    reimburse you direct - but then it's a competitive world and they doubtless
    have limited funds. I think you should be fighting for your share, however.
    Mind you, you sound to be "new" and perhaps the hierarchy have stitched up
    the budget and you won't see the benefits for a couple of years or so.

    >> Same with
    >> computer software (I can always use an pencil and paper - but I can't
    >> claim for pencil and paper, because I should really just memorise the
    >> data)


    See EIM70790 from the above link.

    >> books and journal subscriptions (no-one's forcing me to read
    >> them, and if I really want to read them I can go to a library),
    >> membership of professional bodies (not necessary for the job itself),
    >> etc.

    >
    > This is where you're going too far. Membership of professional bodies
    > generally *is* an allowable expense


    and some trade unions, too - e.g. school teachers & (IIRC) AUT etc...!

    In summary, I think you're in a stronger position on most of the issues you
    raise than you might think... (albeit, you just get tax relief on the costs,
    not reimbursement in full).

    Certainly worth asking colleagues what they claim.

    HTH

    --
    Martin
     
    Martin, Jun 23, 2008
    #11
  12. Leo

    Simon Guest


    >>> For
    >>> example, I go to a conference. I apply for funding to go (I'm an
    >>> academic) but don't get it. I go anyway, because if I don't go to
    >>> conferences I might as well kiss my career good-bye. It's wholly and
    >>> exclusively part of my job, but since I wouldn't lose my job if I
    >>> didn't go, it's not necessary and so not an expense.

    >
    > I think you can reasonably take a different approach here. If your
    > employer
    > had reimbursed you, would you then be taxable on that reimbursement? From
    > the academics I know, the answer is clearly "no". Hence, I cannot see why
    > you cannot claim tax relief on the costs you incur in attending
    > conferences.
    >
    > If HMRC contested the claim, I would argue that CPD is an integral and
    > essential part of your job (which academic isn't expected to be "up to
    > date"
    > on stuff?). I would also point out that you are being paid to attend -
    > i.e.
    > you are not taking the days out of your annual holiday entitlment.
    >

    Sorry Martin but you are not correct on this. An expense ha to be incurred
    Wholly, Exclusively and necessarily in the performance of the duties of the
    employment. Attendance at the conference may be of assistance in keeping the
    worker up to date but it is not "in the performance of the duties of the
    employment".

    This means that, to be deductible, the expense must be incurred in actually
    carrying out the duties of the office. It is not sufficient that an expense
    is simply relevant to, or incurred in connection with, the duties of the
    office. In particular, no expense will be allowable which merely puts the
    office holder in a position to perform the duties of that office.

    The expenditure must be such that any holder of the office would be
    necessarily obliged to incur it. The fact that an office holder is
    encouraged, expected or required to incur a particular expense is not
    conclusive evidence that it is 'necessarily' incurred. Also, the expense
    must stem from the requirements of the job itself, not from the personal
    circumstances of the office holder. Strictly, the 'necessity test' will be
    satisfied if (and only if) each and every person holding the office would
    have to incur the expenditure.


    > I strongly recommend you go here...
    >
    > http://www.hmrc.gov.uk/manuals/eimanual/EIM70199.htm
    >
    > ... then click on EIM70695 and all the sub-sections which apply to
    > whichever areas of academia are relevant to you.
    >
    > That said, I'm very surprised the academic body which employs you doesn't
    > reimburse you direct - but then it's a competitive world and they
    > doubtless
    > have limited funds. I think you should be fighting for your share,
    > however.
    > Mind you, you sound to be "new" and perhaps the hierarchy have stitched up
    > the budget and you won't see the benefits for a couple of years or so.
    >
    >>
    >> This is where you're going too far. Membership of professional bodies
    >> generally *is* an allowable expense

    >
    > and some trade unions, too - e.g. school teachers & (IIRC) AUT etc...!
    >


    Thats because the membership of certain associations are permitted to be
    paid by the employer as they are on List 3.

    You can find this at http://www.hmrc.gov.uk/list3/list3.pdf

    This generally allows annual subscriptions to trade associations but not
    trade unions.
     
    Simon, Jun 23, 2008
    #12
  13. Leo

    Simon Guest

    "Simon" <> wrote in message
    news:p...
    >
    >>>> For
    >>>> example, I go to a conference. I apply for funding to go (I'm an
    >>>> academic) but don't get it. I go anyway, because if I don't go to
    >>>> conferences I might as well kiss my career good-bye. It's wholly and
    >>>> exclusively part of my job, but since I wouldn't lose my job if I
    >>>> didn't go, it's not necessary and so not an expense.

    >>
    >> I think you can reasonably take a different approach here. If your
    >> employer
    >> had reimbursed you, would you then be taxable on that reimbursement?
    >> From
    >> the academics I know, the answer is clearly "no". Hence, I cannot see
    >> why
    >> you cannot claim tax relief on the costs you incur in attending
    >> conferences.
    >>
    >> If HMRC contested the claim, I would argue that CPD is an integral and
    >> essential part of your job (which academic isn't expected to be "up to
    >> date"
    >> on stuff?). I would also point out that you are being paid to attend -
    >> i.e.
    >> you are not taking the days out of your annual holiday entitlment.
    >>

    > Sorry Martin but you are not correct on this. An expense ha to be incurred
    > Wholly, Exclusively and necessarily in the performance of the duties of
    > the employment. Attendance at the conference may be of assistance in
    > keeping the worker up to date but it is not "in the performance of the
    > duties of the employment".
    >
    > This means that, to be deductible, the expense must be incurred in
    > actually carrying out the duties of the office. It is not sufficient that
    > an expense is simply relevant to, or incurred in connection with, the
    > duties of the office. In particular, no expense will be allowable which
    > merely puts the office holder in a position to perform the duties of that
    > office.
    >
    > The expenditure must be such that any holder of the office would be
    > necessarily obliged to incur it. The fact that an office holder is
    > encouraged, expected or required to incur a particular expense is not
    > conclusive evidence that it is 'necessarily' incurred. Also, the expense
    > must stem from the requirements of the job itself, not from the personal
    > circumstances of the office holder. Strictly, the 'necessity test' will be
    > satisfied if (and only if) each and every person holding the office would
    > have to incur the expenditure.
    >
    >
    >> I strongly recommend you go here...
    >>
    >> http://www.hmrc.gov.uk/manuals/eimanual/EIM70199.htm
    >>
    >> ... then click on EIM70695 and all the sub-sections which apply to
    >> whichever areas of academia are relevant to you.
    >>
    >> That said, I'm very surprised the academic body which employs you doesn't
    >> reimburse you direct - but then it's a competitive world and they
    >> doubtless
    >> have limited funds. I think you should be fighting for your share,
    >> however.
    >> Mind you, you sound to be "new" and perhaps the hierarchy have stitched
    >> up
    >> the budget and you won't see the benefits for a couple of years or so.
    >>
    >>>
    >>> This is where you're going too far. Membership of professional bodies
    >>> generally *is* an allowable expense

    >>
    >> and some trade unions, too - e.g. school teachers & (IIRC) AUT etc...!
    >>

    >
    > Thats because the membership of certain associations are permitted to be
    > paid by the employer as they are on List 3.
    >
    > You can find this at http://www.hmrc.gov.uk/list3/list3.pdf
    >
    > This generally allows annual subscriptions to trade associations but not
    > trade unions.


    This is the other part of the guidance that I was looking for:-

    EIM31990 - Travel expenses: general: overseas conferences, seminars and
    study tours: example
    A consultant neurologist attends the annual conference of the World Council
    of Neurology. The conference takes place in Geneva and takes 4 days. The
    conference consists of a series of meetings, lectures and seminars on
    medical matters. The neurologist's employer encourages her to attend and the
    conference is directly relevant to her work.

    No deduction can be permitted for the cost of attending the conference.
    Attendance at the conference is not necessary expenditure, see EIM31950.
    Attendance at the conference is not one of the duties of her employment, see
    EIM31650.
     
    Simon, Jun 23, 2008
    #13
  14. Leo

    Ian Jackson Guest

    In message <>, Simon
    <> writes
    >
    >"Simon" <> wrote in message
    >news:p...
    >>
    >>>>> For
    >>>>> example, I go to a conference. I apply for funding to go (I'm an
    >>>>> academic) but don't get it. I go anyway, because if I don't go to
    >>>>> conferences I might as well kiss my career good-bye. It's wholly and
    >>>>> exclusively part of my job, but since I wouldn't lose my job if I
    >>>>> didn't go, it's not necessary and so not an expense.
    >>>
    >>> I think you can reasonably take a different approach here. If your
    >>>employer
    >>> had reimbursed you, would you then be taxable on that reimbursement?
    >>>From
    >>> the academics I know, the answer is clearly "no". Hence, I cannot
    >>>see why
    >>> you cannot claim tax relief on the costs you incur in attending
    >>>conferences.
    >>>
    >>> If HMRC contested the claim, I would argue that CPD is an integral and
    >>> essential part of your job (which academic isn't expected to be "up
    >>>to date"
    >>> on stuff?). I would also point out that you are being paid to
    >>>attend - i.e.
    >>> you are not taking the days out of your annual holiday entitlment.
    >>>

    >> Sorry Martin but you are not correct on this. An expense ha to be
    >>incurred Wholly, Exclusively and necessarily in the performance of
    >>the duties of the employment. Attendance at the conference may be of
    >>assistance in keeping the worker up to date but it is not "in the
    >>performance of the duties of the employment".
    >>
    >> This means that, to be deductible, the expense must be incurred in
    >>actually carrying out the duties of the office. It is not sufficient
    >>that an expense is simply relevant to, or incurred in connection
    >>with, the duties of the office. In particular, no expense will be
    >>allowable which merely puts the office holder in a position to perform
    >>the duties of that office.
    >>
    >> The expenditure must be such that any holder of the office would be
    >>necessarily obliged to incur it. The fact that an office holder is
    >>encouraged, expected or required to incur a particular expense is not
    >>conclusive evidence that it is 'necessarily' incurred. Also, the
    >>expense must stem from the requirements of the job itself, not from
    >>the personal circumstances of the office holder. Strictly, the
    >>'necessity test' will be satisfied if (and only if) each and every
    >>person holding the office would have to incur the expenditure.
    >>
    >>
    >>> I strongly recommend you go here...
    >>>
    >>> http://www.hmrc.gov.uk/manuals/eimanual/EIM70199.htm
    >>>
    >>> ... then click on EIM70695 and all the sub-sections which apply to
    >>>whichever areas of academia are relevant to you.
    >>>
    >>> That said, I'm very surprised the academic body which employs you doesn't
    >>> reimburse you direct - but then it's a competitive world and they
    >>>doubtless
    >>> have limited funds. I think you should be fighting for your share,
    >>>however.
    >>> Mind you, you sound to be "new" and perhaps the hierarchy have
    >>>stitched up
    >>> the budget and you won't see the benefits for a couple of years or so.
    >>>
    >>>>
    >>>> This is where you're going too far. Membership of professional bodies
    >>>> generally *is* an allowable expense
    >>>
    >>> and some trade unions, too - e.g. school teachers & (IIRC) AUT etc...!
    >>>

    >>
    >> Thats because the membership of certain associations are permitted to
    >>be paid by the employer as they are on List 3.
    >>
    >> You can find this at http://www.hmrc.gov.uk/list3/list3.pdf
    >>
    >> This generally allows annual subscriptions to trade associations but
    >>not trade unions.

    >
    >This is the other part of the guidance that I was looking for:-
    >
    >EIM31990 - Travel expenses: general: overseas conferences, seminars and
    >study tours: example
    >A consultant neurologist attends the annual conference of the World
    >Council of Neurology. The conference takes place in Geneva and takes 4
    >days. The conference consists of a series of meetings, lectures and
    >seminars on medical matters. The neurologist's employer encourages her
    >to attend and the conference is directly relevant to her work.
    >
    >No deduction can be permitted for the cost of attending the conference.
    >Attendance at the conference is not necessary expenditure, see
    >EIM31950. Attendance at the conference is not one of the duties of her
    >employment, see EIM31650.
    >
    >

    But is this not what is tax-deductible by the employer, ie it does not
    affect the employee directly? For attendance at conferences, seminars,
    training courses and other related jollies, the employer usually
    reimburses the employee all reasonable related expenses. What the taxman
    allows as tax deductible when the employer puts in his business tax
    returns is a different matter.
    --
    Ian
     
    Ian Jackson, Jun 24, 2008
    #14
  15. Leo

    Leo Guest

    It's sounding like the answer is "no" to most of the above. Membership
    seems to be ok, but a couple of people I've asked say it's more
    trouble than it's worth.

    Interesting the difference in philosophies in the two systems. In
    Australia you can claim pretty much anything work related, even if
    (I'm tempted to say especially if) it's linked to career rather than
    job. So, for example, if I'm a plumber and I go to night school to
    learn Japanese so I can get a better-paid job with a Japanese company,
    then (assuming I can justify that this is not just so I can
    competently order sushi on my next holiday) I can claim not only the
    cost of the courses, but the travel costs from work to school (but not
    to or from home), Japanese books I purchase, and so on.

    So, back when I was a (part-time) student I could claim the bus fare
    from work to the university to attend classes as well as books,
    membership of societies, conferences, etc.

    The Australian system seems to be geared towards encouraging people to
    move on (and up) and thus ultimately contribute to economic growth. I
    guess the British economy is strong enough without people trying to
    improve themselves :)

    L.
     
    Leo, Jun 24, 2008
    #15
  16. Simon wrote:

    > This is the other part of the guidance that I was looking for:-
    >
    > EIM31990 - Travel expenses: general: overseas conferences, seminars and
    > study tours: example
    > A consultant neurologist attends the annual conference of the World
    > Council of Neurology. The conference takes place in Geneva and takes 4
    > days. The conference consists of a series of meetings, lectures and
    > seminars on medical matters. The neurologist's employer encourages her to
    > attend and the conference is directly relevant to her work.
    >
    > No deduction can be permitted for the cost of attending the conference.
    > Attendance at the conference is not necessary expenditure, see EIM31950.
    > Attendance at the conference is not one of the duties of her employment,
    > see EIM31650.


    Does this apply only if the employee chooses -off her own bat- to attend
    the conference? Surely in principle it could *become* part of her duties
    if the employer went further than to encourage her to attend, but in fact
    instructs her to attend, right?

    To phrase it in terms the OP used, he gave the example of having applied
    unsuccessfully for funding to attend, and then opting to attend anyway
    by self-funding. Suppose the funding application had been successful.
    You would not then expect to tax this funding, would you? This is because
    that funding would be given specifically for, and conditional upon,
    actually attending it.
     
    Ronald Raygun, Jun 24, 2008
    #16
  17. Leo wrote:

    > Interesting the difference in philosophies in the two systems. In
    > Australia you can claim pretty much anything work related, even if
    > (I'm tempted to say especially if) it's linked to career rather than
    > job. So, for example, if I'm a plumber and I go to night school to
    > learn Japanese so I can get a better-paid job with a Japanese company,
    > then (assuming I can justify that this is not just so I can
    > competently order sushi on my next holiday) I can claim not only the
    > cost of the courses, but the travel costs from work to school (but not
    > to or from home), Japanese books I purchase, and so on.


    Here you would certainly not be able to claim the cost of Japanese
    classes and books against your existing job, because knowledge of
    Japanese is not a requirement of your existing job. If anything,
    you might expect to be able to set the costs against income actually
    arising from the new employment (but only if you in fact get that job
    - speculative expenditure is not allowed), but under UK rules sadly
    even that is not allowed, because the new skills could be of use not
    only for your first Japanese plumbing job, but also for any other
    subsequent Japanese job. If you moved to Japan, knowledge of the
    language would also become useful to you socially, and so the
    exclusivity test would fail.

    If, in order to qualify for being allowed to practice plumbing in
    Japan, you went on a crash course in Japanese plumbing regulations,
    this would still not be allowable because you could not identify
    *which* Japanese plumbing employment the cost would have been
    necessary for. On the other hand, if you were going to work as a
    self-employed plumber in Japan, the "necessary" test does not need
    to be met, and you might therefore conceivably be able to set the
    costs against income from that self-employment.

    However, this is unlikely to be of practical interest, since if you
    were working as a plumber in Japan, you would presumably be taxed
    according to Japanese, not British, rules.
     
    Ronald Raygun, Jun 24, 2008
    #17
  18. Leo

    Martin Guest

    "Simon" <> wrote in message
    news:p...
    >
    >>>> For
    >>>> example, I go to a conference. I apply for funding to go (I'm an
    >>>> academic) but don't get it. I go anyway, because if I don't go to
    >>>> conferences I might as well kiss my career good-bye. It's wholly and
    >>>> exclusively part of my job, but since I wouldn't lose my job if I
    >>>> didn't go, it's not necessary and so not an expense.

    >>
    >> I think you can reasonably take a different approach here. If your
    >> employer
    >> had reimbursed you, would you then be taxable on that reimbursement?
    >> From
    >> the academics I know, the answer is clearly "no". Hence, I cannot see
    >> why
    >> you cannot claim tax relief on the costs you incur in attending
    >> conferences.
    >>
    >> If HMRC contested the claim, I would argue that CPD is an integral and
    >> essential part of your job (which academic isn't expected to be "up to
    >> date"
    >> on stuff?). I would also point out that you are being paid to attend -
    >> i.e.
    >> you are not taking the days out of your annual holiday entitlment.
    >>

    > Sorry Martin but you are not correct on this. An expense ha to be incurred
    > Wholly, Exclusively and necessarily in the performance of the duties of
    > the employment.


    For travel & subsistence, N but *not* W & E - see the link I posted
    previously.

    > Attendance at the conference may be of assistance in keeping the worker up
    > to date but it is not "in the performance of the duties of the
    > employment".


    Why do you say that?

    > This means that, to be deductible, the expense must be incurred in
    > actually carrying out the duties of the office. It is not sufficient that
    > an expense is simply relevant to, or incurred in connection with, the
    > duties of the office. In particular, no expense will be allowable which
    > merely puts the office holder in a position to perform the duties of that
    > office.
    >
    > The expenditure must be such that any holder of the office would be
    > necessarily obliged to incur it. The fact that an office holder is
    > encouraged, expected or required to incur a particular expense is not
    > conclusive evidence that it is 'necessarily' incurred. Also, the expense
    > must stem from the requirements of the job itself, not from the personal
    > circumstances of the office holder. Strictly, the 'necessity test' will be
    > satisfied if (and only if) each and every person holding the office would
    > have to incur the expenditure.
    >


    I disagree with you. You've quoted the standard HMRC stuff, but you must
    then look at the requirements of the job.

    Leo is an academic - and the job descriptions for Uni lecturers (which Leo
    may or may not be) all make the clear point that keeping abreast of latest
    thinking / developments (aka research, in some quarters) is central. That
    is a part of the job [most] academics are paid for, and effectively a "duty
    of the employment".

    Also please note the points I made earlier (but you snipped) about other key
    arguments - especially whether any reimbursement to Leo would be taxable on
    him. Such reimbursements, IME, are not taxed. If you've got a contra
    example, I'd be interested to hear about it.

    By your interpretation, a salesman would not get relief for reimbursement
    for the cost of travelling to a customer, since the travel merely puts him
    in the position of being able to sell. He could have done that on the
    phone.

    Also consider that the conference (at which the academic is indeed working)
    is held at a temporary workplace. Hence travel is deductible.

    --
    Martin
     
    Martin, Jun 24, 2008
    #18
  19. Leo

    AnthonyL Guest

    On Tue, 24 Jun 2008 01:03:33 -0700 (PDT), Leo
    <> wrote:

    >It's sounding like the answer is "no" to most of the above. Membership
    >seems to be ok, but a couple of people I've asked say it's more
    >trouble than it's worth.
    >
    >Interesting the difference in philosophies in the two systems. In
    >Australia you can claim pretty much anything work related, even if
    >(I'm tempted to say especially if) it's linked to career rather than
    >job. So, for example, if I'm a plumber and I go to night school to
    >learn Japanese so I can get a better-paid job with a Japanese company,
    >then (assuming I can justify that this is not just so I can
    >competently order sushi on my next holiday) I can claim not only the
    >cost of the courses, but the travel costs from work to school (but not
    >to or from home), Japanese books I purchase, and so on.
    >
    >So, back when I was a (part-time) student I could claim the bus fare
    >from work to the university to attend classes as well as books,
    >membership of societies, conferences, etc.
    >
    >The Australian system seems to be geared towards encouraging people to
    >move on (and up) and thus ultimately contribute to economic growth. I
    >guess the British economy is strong enough without people trying to
    >improve themselves :)
    >


    ISTR that an Australian minister (of Finance?) once stated that it is
    the duty of an Australian tax payer only to pay the minimum that is
    due.

    The underlying message was to claim everything that was claimable
    which I recall doing when I was there.

    Here I've got in 'trouble' for using the wrong NI rate on benefits on
    telephone calls even though the difference in amounts over the year
    was not even £10.

    Welcome to the land of jobsworths!


    --
    AnthonyL
     
    AnthonyL, Jun 24, 2008
    #19
  20. Leo

    PeterSaxton Guest

    On 24 Jun, 12:30, (AnthonyL) wrote:
    > On Tue, 24 Jun 2008 01:03:33 -0700 (PDT), Leo
    >
    >
    >
    >
    >
    > <> wrote:
    > >It's sounding like the answer is "no" to most of the above. Membership
    > >seems to be ok, but a couple of people I've asked say it's more
    > >trouble than it's worth.

    >
    > >Interesting the difference in philosophies in the two systems. In
    > >Australia you can claim pretty much anything work related, even if
    > >(I'm tempted to say especially if) it's linked to career rather than
    > >job. So, for example, if I'm a plumber and I go to night school to
    > >learn Japanese so I can get a better-paid job with a Japanese company,
    > >then (assuming I can justify that this is not just so I can
    > >competently order sushi on my next holiday) I can claim not only the
    > >cost of the courses, but the travel costs from work to school (but not
    > >to or from home), Japanese books I purchase, and so on.

    >
    > >So, back when I was a (part-time) student I could claim the bus fare
    > >from work to the university to attend classes as well as books,
    > >membership of societies, conferences, etc.

    >
    > >The Australian system seems to be geared towards encouraging people to
    > >move on (and up) and thus ultimately contribute to economic growth. I
    > >guess the British economy is strong enough without people trying to
    > >improve themselves :)

    >
    > ISTR that an Australian minister (of Finance?) once stated that it is
    > the duty of an Australian tax payer only to pay the minimum that is
    > due.  
    >
    > The underlying message was to claim everything that was claimable
    > which I recall doing when I was there.
    >
    > Here I've got in 'trouble' for using the wrong NI rate on benefits on
    > telephone calls even though the difference in amounts over the year
    > was not even £10.
    >
    > Welcome to the land of jobsworths!
    >
    > --
    > AnthonyL


    Don't you think you've confused duty with something else? I don't
    think the underlying message was as you state. He was pointing out the
    limits of duty.

    Minimum? There's one amount due that is both the minimum and the
    maximum.
     
    PeterSaxton, Jun 24, 2008
    #20
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