Chancellor after more of allowances
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Join Date: May 2004
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Chancellor after more of allowances
I know this has been discussed to death, but I hear that Mr Brown is keen to up tax on allowances as part of his crack down on avoidance. I also hear that Ryan will be included in his search to squeeze more cash from us all.
Anybody got any more info
Anybody got any more info
Join Date: Sep 2001
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IR 2063 will be published next month and becomes effective 6th April 2005. Basically, all allowances will be taxable at the recipient's tax rate, but only when receipts for expenses incurred in the line of duty are deducted. So you will need to keep your receipts for sandwiches, meals in restaurants etc along with printed proof that this as incurred during duty hours.
It happens in the rest of industry so it's no surprise - except that he let us get away with it so long.
It happens in the rest of industry so it's no surprise - except that he let us get away with it so long.
Join Date: Jun 2001
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I have been an expat for the last 8 years so my UK tax info is obviously way out of date but it strikes me that this new process will be very time consuming for both the individual and the Inland Revenue, and any extra revenue generated unlikely to cover the cost of collecting it.
When I last worked in UK, my airline (major UK Charter Operator) had a deal with the Inland revenue whereby we paid 25% tax on 25% of our allowances, deducted at source. Eg, Monthly allowances 1600, tax burden 100. It worked well and was simple to administrate.
More power to the beancounters I guess!
edited for appalling grammar.
When I last worked in UK, my airline (major UK Charter Operator) had a deal with the Inland revenue whereby we paid 25% tax on 25% of our allowances, deducted at source. Eg, Monthly allowances 1600, tax burden 100. It worked well and was simple to administrate.
More power to the beancounters I guess!
edited for appalling grammar.
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Sorry KB, I'm being a bit thick .. are u saying that if you can produce reciepts for meals etc up to the value of your allowance, there will be no tax? and that any allowance not accounted for by reciepts will ba taxed at the full rate??
Join Date: Feb 1999
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OpsR,
You are correct. Anything not declared as a expense will be subject to your tax rate: 22 or 40%, depending on how much you earn. In reality, you will have to fill in the box on your tax return stating how much was spent and the tax man will give you relief on that amount. Unless of course your company enters into an agreement with the IR as already stated.
It is unlikely you will have to produce receipts to the IR, but will need to keep track of them if you are ever audited. The trick is to put in a reasonable number, and the tax man generally leaves you alone.
You are correct. Anything not declared as a expense will be subject to your tax rate: 22 or 40%, depending on how much you earn. In reality, you will have to fill in the box on your tax return stating how much was spent and the tax man will give you relief on that amount. Unless of course your company enters into an agreement with the IR as already stated.
It is unlikely you will have to produce receipts to the IR, but will need to keep track of them if you are ever audited. The trick is to put in a reasonable number, and the tax man generally leaves you alone.
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I thought allowances were calculated as lower taxable amount (ie. only part of them is taxable) as the rest is for flight time outside of the country (ie. monies earned abroad).
Is this not the case?
Why have we not heard about this before?
Does this mean 100% of all allowances will be taxed at 40%?
Is this not the case?
Why have we not heard about this before?
Does this mean 100% of all allowances will be taxed at 40%?
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I'm surprised Gordon has let you get away with this for so long. Standard tax rules are that any 'allowance' is a payment from employer to employee, and is therefore income, and is therefore taxable.
Re-imbursement of expenses is simply the employer paying the employee for expenses encountered 'wholly and necessarily' incurred in doing their job - hotel bills, meals etc. These are not, therefore, taxable.
To ensure that the expenses are genuine, the taxman may ask to see receipts. But in most cases (certainly the company I work for), the expenses will only be reimbursed by the company on production of receipts.
SSD
Re-imbursement of expenses is simply the employer paying the employee for expenses encountered 'wholly and necessarily' incurred in doing their job - hotel bills, meals etc. These are not, therefore, taxable.
To ensure that the expenses are genuine, the taxman may ask to see receipts. But in most cases (certainly the company I work for), the expenses will only be reimbursed by the company on production of receipts.
SSD
