Self Assessment form - expenses


S

Sandy

When I last filled my Self Assessment form in I was asked about what
expenses I had claimed with my regular employer.

To me, a claimed expense can either be

a) a business expense where I pay for something for the benefit of the
business with my own money and claim it back. For example, I may buy
stationery, hire a car, get a flight. These are all expenses I need to
claim to do my job.

b) a personal expense which is of benefit to me that my employer pays for
and is a perk of the job but isn't essential in order for me to do my
job. For example, the company may allow me to entertain clients, stay in
good hotels, eat at the best restaurants and will reimburse me.

The company could insist that I bring a packed lunch, have only work-
related meetings with clients, stay at the cheap hotels but don't. I
consider this to be a bonus on top of my salary.


But the SA form doesn't distinguish between the two. I could understand
that if I buy something for myself and the company pays for it that this
should go towards calculating my annual salary and therefore which tax
bracket I fit into.

But if an expense is simply an actual business expense, why should this
potentially affect how much tax I pay?
 
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D

David Woolley

Sandy said:
But if an expense is simply an actual business expense, why should this
potentially affect how much tax I pay?
It doesn't, because, if it is legitimate, there will be an expense
figure to balance the payment figure.

Note, though, that most companies that re-imburse such expenses have a
dispensation arrangement with HMRC, which specifies what is allowable,
and such items do not need to go on the tax return at all. The staff
handbook will typically specify these figures as the maximum that you
can claim for expenses, as it would be unusual for a company to
reimburse more than the figure allowed by the HMRC - for a start it
would mean work for them in issuing you with a P11D.
 

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