Non-business expenses

Produced by a Tolley Employment Tax expert

Employment Tax

Guidance

$imgtext$

Introduction

In order for an expense to be tax deductible it must be incurred because of an employee’s employment. Any non-business related expense is, therefore, not relievable except in some very particular circumstances.

This guidance note deals with three separate issues. The first is where an expense has both a business and private element. In this case some, or indeed all, of the expense may be allowable. The second case is where an expense must be treated as a non-business expense and is not deductible for tax purposes. The third is expenditure which appears on principles to be non-business yet qualifies as non-taxable, usually due to statutory provision or HMRC concession.

Dual purposes

In order to claim a deduction for tax purposes, the expenditure must be incurred ‘wholly, exclusively and necessarily in the performance of the duties of the employment’. This is discussed in the Expenses ― general rule guidance note. If an expense is not incurred for these reasons then it is disallowed.

However, despite the strictness of this test, it is understood that there are instances

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

TAKE A FREE TRIAL

Popular Articles

Owner-Managed Businesses

First year allowances

First year allowancesFirst year allowances (FYAs) are available on the following items:•first-year relief on qualifying new main rate plant and machinery (at 100%, which is described by HMRC as ‘full expensing’) and special rate assets (at 50%) from 1 April 2023 (companies only). These FYAs were

14 Jul 2020 11:41 | Produced by Tolley Read more

Spring Budget 2024

Corporation Tax

Research and development (R&D) relief ― overview

Research and development (R&D) relief ― overviewThis guidance note provides an overview of the research and development (R&D) tax reliefs for companies.See the Research and development tax relief summary diagram which summarises the R&D tax relief.See also Simon’s Taxes D1.401.For a factsheet which

14 Jul 2020 12:22 | Produced by Tolley in association with Will Sweeney Read more

Employment Tax

Parking provision and expenses

Parking provision and expensesCar parking facilities at or near to the employee’s workplaceThere is an exemption from tax and NIC where an employer provides parking, or pays for or reimburses an employee for the costs associated with car parking at or near the place of work; there are no reporting

14 Jul 2020 11:09 | Produced by Tolley Read more

UU��ֱ��