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  • #1

    Tax question regards PAYE

    Hi - question for any tax experts out there.

    I am considering going from contracting to being a full time employee on PAYE.

    The position I'm considering the employment contract states that I would not be office based, instead my permanent place of work would be 'home-based'.

    I would be required to travel for a significant part of my job and this is where things get hazy.

    As I am PAYE I was wondering if there is anything I could claim in regards to capital allowances.

    I am getting mixed information on what you can claim regards capital allowances for cars/vans etc.

    HMRC state that you cannot have capital allowances for cars and vans.

    However I have been told that I can claim tax relief on the interest element on any HP I may have taken out to purchase a vehicle which is necessary for my work, in addition to the mileage allowance relief.

    Is anyone aware of anything else that I may be able to claim as a PAYE employee but being home based?

    Its an important consideration as I'm having to weigh up the 'is it worth it' question or stay as I am!

    Thanks in advance!
    SnV
    "I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve."

    The consumer is that sleeping giant.!!


    I'm an official AAD Moderator and also a volunteer, here to help make the forum run smoothly. Any views or opinions are mine and not the official line of AAD. Similarly, any advice I have offered you is done so on an informal basis, without prejudice or liability. If in doubt seek advice from a qualified insured professional - Find a Solicitor or go to the National Probono Centre.

    If you spot an abusive or libellous post then please report it by Clicking Here. If you need to contact me, for instance if I've issued you a warning, moved, edited or deleted your post, please send me a message by clicking my username.
    Tags: allowance, allowances, arrangement, assessment, capital, car, cars, cca, claim, contract, council, council tax, details, employee, employees, employment, family, fees, help, hmrc, home, information, interest, job, lease, legislation, office, pay, paye, purchase, questions, rac, self assessment, stay, subscriptions, tax, tax relief, website, work
  • #2
    Re: Tax question regards PAYE

    Travel allowance and H.P Interest are indeed reclaimable.

    You can also claim subsistence when travelling, professional fees, subscriptions
    I'm an official AAD Moderator and also a volunteer, here to help make the forum run smoothly. Any views or opinions are mine and not the official line of AAD. Similarly, any advice I have offered you is done so on an informal basis, without prejudice or liability. If in doubt seek advice from a qualified insured professional - Find a Solicitor or go to the National Probono Centre.

    If you spot an abusive or libellous post then please report it by Clicking Here. If you need to contact me, for instance if I've issued you a warning, moved, edited or deleted your post, please send me a message by clicking my username.

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    • #3
      Re: Tax question regards PAYE

      Originally posted by SXGuy View Post
      Travel allowance and H.P Interest are indeed reclaimable.

      You can also claim subsistence when travelling, professional fees, subscriptions
      Thanks SXGuy

      Is this also the case for PAYE employees?

      How does claiming tax relief on HP interest work? Do you need to look at the interest charged over the HP term and divide by number of months?

      Apologies for the questions! I'm just trying to work out if this is worth my while

      Best
      SnV
      "I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve."

      The consumer is that sleeping giant.!!


      I'm an official AAD Moderator and also a volunteer, here to help make the forum run smoothly. Any views or opinions are mine and not the official line of AAD. Similarly, any advice I have offered you is done so on an informal basis, without prejudice or liability. If in doubt seek advice from a qualified insured professional - Find a Solicitor or go to the National Probono Centre.

      If you spot an abusive or libellous post then please report it by Clicking Here. If you need to contact me, for instance if I've issued you a warning, moved, edited or deleted your post, please send me a message by clicking my username.

      Comment

      • #4
        Re: Tax question regards PAYE

        If its fixed interest charged each year over the term, then divide it by the term length in years.

        However, i think H.P can sometimes be front loaded interest? in which case you will need to work out what the interest would be in year 1, 2, 3 etc to the full lease term, and claim each back on each year.

        If you are on PAYE, it will require you registering for self assessment, filling in the employment sheet details, which include your h.p interest, and you can then claim the tax back.

        This may help? http://www.hmrc.gov.uk/manuals/bimmanual/BIM61055.htm
        Last edited by SXGuy; 4 July 2013, 18:24.
        I'm an official AAD Moderator and also a volunteer, here to help make the forum run smoothly. Any views or opinions are mine and not the official line of AAD. Similarly, any advice I have offered you is done so on an informal basis, without prejudice or liability. If in doubt seek advice from a qualified insured professional - Find a Solicitor or go to the National Probono Centre.

        If you spot an abusive or libellous post then please report it by Clicking Here. If you need to contact me, for instance if I've issued you a warning, moved, edited or deleted your post, please send me a message by clicking my username.

        Comment

        • #5
          Re: Tax question regards PAYE

          Originally posted by SXGuy View Post
          If its fixed interest charged each year over the term, then divide it by the term length in years.

          However, i think H.P can sometimes be front loaded interest? in which case you will need to work out what the interest would be in year 1, 2, 3 etc to the full lease term, and claim each back on each year.

          If you are on PAYE, it will require you registering for self assessment, filling in the employment sheet details, which include your h.p interest, and you can then claim the tax back.

          This may help? http://www.hmrc.gov.uk/manuals/bimmanual/BIM61055.htm
          Thanks matey

          Thats really useful information. Trying to sort the diamonds from the crap on the HMRC website is a real battle!
          "I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve."

          The consumer is that sleeping giant.!!


          I'm an official AAD Moderator and also a volunteer, here to help make the forum run smoothly. Any views or opinions are mine and not the official line of AAD. Similarly, any advice I have offered you is done so on an informal basis, without prejudice or liability. If in doubt seek advice from a qualified insured professional - Find a Solicitor or go to the National Probono Centre.

          If you spot an abusive or libellous post then please report it by Clicking Here. If you need to contact me, for instance if I've issued you a warning, moved, edited or deleted your post, please send me a message by clicking my username.

          Comment

          • #6
            Re: Tax question regards PAYE

            Hi all you AAD tax experts

            So I took up the contract last July and am struggling with the self assessment form and need some guidance on what I can/can't claim.......

            1) Am in FTE with tax being taken PAYE
            2) Contract of employment states that my permanent place of work is my home office
            3) My work requires me to travel to customer premises approx 30% of the time
            4) I am paid a car allowance which is taxed at the normal rates
            5) My employer also pays me the usual 45p/mile tax free allowance

            So my question is around 2 things:

            a) What I am able to claim due to my permanant place of work being an office that I have to provide at home (and is used solely as an office). My understanding is that I can claim a proportion of specific expenses identified under BIM47820 (i.e. a percentage of my rent, fuel bills, council tax etc). So if the office space is say 7% of total floor area then I could claim 7% of utility bills?

            b) My car is used solely for business purposes to get to clients premises, we have another car for family use. The car is paid for via finance so am I able to get tax relief on the interest payments (not the capital)?

            c) As I operate a home office what capital expenses can I claim? I have had to provide a printer, desk chair, filing cabinets etc. Are these things I can claim also?

            I have had mixed answers on this, and most tax advisors have been stumped as I seem to fall in to a grey area because my contract states that I have to operate a home office as my permanant place of work (as opposed to being based in my companies headquarters and having a working from home arrangement).

            Best
            SnV
            "I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve."

            The consumer is that sleeping giant.!!


            I'm an official AAD Moderator and also a volunteer, here to help make the forum run smoothly. Any views or opinions are mine and not the official line of AAD. Similarly, any advice I have offered you is done so on an informal basis, without prejudice or liability. If in doubt seek advice from a qualified insured professional - Find a Solicitor or go to the National Probono Centre.

            If you spot an abusive or libellous post then please report it by Clicking Here. If you need to contact me, for instance if I've issued you a warning, moved, edited or deleted your post, please send me a message by clicking my username.

            Comment

            • #7
              Re: Tax question regards PAYE

              You are correct. Us tax advisors very rarely agree on anything in situations like this, we all have our own opinion on how to interprate the legislation.

              All I can do, is give you my opinion.

              So in answers to your questions

              a) What I am able to claim due to my permanant place of work being an office that I have to provide at home (and is used solely as an office). My understanding is that I can claim a proportion of specific expenses identified under BIM47820 (i.e. a percentage of my rent, fuel bills, council tax etc). So if the office space is say 7% of total floor area then I could claim 7% of utility bills?
              Yes you can claim a proportion of specific expenses as your work place is your home. I would say, that it is fair to claim 7% of electric, telephone, rent, council tax etc. I cant see any issues with that being a fair proportion.

              b) My car is used solely for business purposes to get to clients premises, we have another car for family use. The car is paid for via finance so am I able to get tax relief on the interest payments (not the capital)?
              Yep, just the H.P Interest, not the capital. You can also claim, any repairs, servicing, road tax. If the car is soley for business use, then I would say that this is also a fair expense claim.

              c) As I operate a home office what capital expenses can I claim? I have had to provide a printer, desk chair, filing cabinets etc. Are these things I can claim also?

              Yes they are all things you can claim. They would be classed as a capital allowance, with a written down value of 18% per year.

              Basically, take the value as at year end, and claim 18% of that value, then moving forward each year, reduce it by the amount claimed, and claim another 18%. If you dispose of any of the goods, calim up to the month is was disposed (as an example if you got rid in June, you would claim 3/12th's)

              Same for any new items bought, claim starts from the month it was bought, to the end of the financial year.

              Does that make sense?
              I'm an official AAD Moderator and also a volunteer, here to help make the forum run smoothly. Any views or opinions are mine and not the official line of AAD. Similarly, any advice I have offered you is done so on an informal basis, without prejudice or liability. If in doubt seek advice from a qualified insured professional - Find a Solicitor or go to the National Probono Centre.

              If you spot an abusive or libellous post then please report it by Clicking Here. If you need to contact me, for instance if I've issued you a warning, moved, edited or deleted your post, please send me a message by clicking my username.

              Comment

              • #8
                Re: Tax question regards PAYE

                Originally posted by SXGuy View Post
                You are correct. Us tax advisors very rarely agree on anything in situations like this, we all have our own opinion on how to interprate the legislation.
                LOL Yes and my working contract isn't what you would call usual and has caused a lot of head scratching!

                Originally posted by SXGuy View Post
                All I can do, is give you my opinion.
                Thanks matey and your opinion is much appreciated. I'm only a layman and trying to get to grips with tax law makes the CCA look like a nursery book!

                Originally posted by SXGuy View Post
                Does that make sense?
                All makes perfect sense thank you. Now hopefully HMRC will see the same!
                "I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve."

                The consumer is that sleeping giant.!!


                I'm an official AAD Moderator and also a volunteer, here to help make the forum run smoothly. Any views or opinions are mine and not the official line of AAD. Similarly, any advice I have offered you is done so on an informal basis, without prejudice or liability. If in doubt seek advice from a qualified insured professional - Find a Solicitor or go to the National Probono Centre.

                If you spot an abusive or libellous post then please report it by Clicking Here. If you need to contact me, for instance if I've issued you a warning, moved, edited or deleted your post, please send me a message by clicking my username.

                Comment

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