Tax Tips > Tax Allowable Payments

  • More Tax Relief Private Cars If your employer does not pay you the full rate for the use of your car for his business, you may be entitled to more tax relief. Give us a call and we will make a claim for you.
  • Business Gifts up to £50 are now allowed providing the gift is not food, drink or tobacco. The gift must also bear a prominant advert or logo!
  • Claim up to a possible 100% tax allowance if your business invests in any plant or other equipment. From 6 April 2012 the annual limit you can claim under this allowance is reducing from £100,000 to £25,000.
  • Include a claim for a proportion of your mortgage interest, as well as cleaning, gas and electricity, if you work from home.
  • Donate money personally to your favourite charity under a Deed of Covenant and the Charity can increase your giving by claiming a refund from the Inland Revenue. Also, if you pay tax at higher rates you will gain a tax advantage.
  • Subscribe to a professional organisation and you may be able to claim a deduction for income tax purposes. Relief will be given providing the organisation is on the Inland Revenue approved list.
  • Pay your own car running costs and claim for your business mileage at the Inland Revenue approved rates. Expenses claimed in this way are tax-free! From April 2011 the rates are 45p per mile for the first 10,000 business miles, thereafter at 25p per mile.
  • Claim an allowance for any shortfall between the rates per mile your employer pays you for the business miles you travel in your own car and the approved Inland Revenue rates. Rates are as noted in the previous paragraph for payments from April 2007.
  • Payment of wages to your spouse must be commercially justifiable (an agreed number of hours at a commercial rate), and the payments must be evidenced in the business records, i.e. regular wage cheques should be drawn. Annual adjustments to the accounts will not be allowed!
  • Claim a flat rate allowance if you bear the cost or upkeep of work tools or special clothing. Ask the Inland Revenue for the agreed allowance for your trade.
  • Organise a tax-free trip for your spouse. If you are unable to travel abroad on business unaccompanied due to ill health, your employer should pay no tax on your spouses expenses reimbursed. Quote Inland Revenue concession A4 (d).
  • Consider granting yourself a long service award, tax free, for 20 years or more of continuing employment in your own business. You have to take the award in goods, how much are those golf clubs? Quote Inland Revenue concession A22.
  • Payments to employees made under an approved suggestion scheme are tax-free. Quote Inland Revenue concession A57.
  • Claim tax relief if you pay your own training fees for courses related to your employment. Check out Inland Revenue concession A64.
  • Working late? After 9pm? Your employer can meet the cost of a taxi or other appropriate transport between work and home with no tax consequence. Check out Inland Revenue concession A66.
  • Give an employee a bicycle and/or cycle safety equipment and the transaction is tax free provided all staff are treated the same, and the bike is used for home to work journeys.
  • Cover your employees medical treatment or insurance while they are working abroad and there is no tax charge to the employee as a benefit.
  • Receive up to £15,000 a year tax-free, if you are paid by your employer to attend a full time or sandwich course at university or college. New rules are to be applied from the 1 September 2005 that will allow these payments to be made tax and national insurance free.
  • Employ your teenage kids in the family business, especially if they have University fees to meet! As long as you pay them a commercial rate per hour for the time they work you should have no problem with the Inland Revenue.
  • Work away from your normal place of employment, with the expectation that you will resume employment at your normal place of work within a year, and you can claim travel expenses, and overnight accommodation against your tax.
  • Take on a new employee and you are responsible for deducting their tax and NIC. Without a P45 from a previous employer, get them to fill in a P46 form and keep a copy. This is the only evidence the Inland Revenue will accept that the amounts you have deducted for tax and National Insurance are correct.
  • Consider employing your children part-time in your business for a commercial rate and include your children as co-owners of assets that are likely to be sold at a capital profit.
  • Invest in new plant and equipment shortly before your year-end, rather than shortly afterwards. This will speed up the tax relief you can claim.
  • Pension contributions remain one of the few tax-deductible payments that benefit you or your family in the long term. Speak to your independent financial advisor, and make sure that your pension planning is adequate.

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