CH 16 - Expenses of employment

Question 1

When deduction of expenses is allowed from taxable earnings?

Answer 1

when;
* the employee is obliged to incur and pay the expense as holder of the employment
* the amount is incurrecd wholly, exclusively and necessarily in the performance of the duties

ITEPA 2003, s.336

Question 2

When temporary work place is no longer considered as temporary work place for travelling cost puposes?

Answer 2

• When comute to a temporary work place from home exceeds 24 hours
  or
• empl.contract is one below 24 months

(ITEPA 2003, ss.337 and 338)

Question 3

When deduction for client entertaining can be claimed from taxable earnings of an employee?

Answer 3

if the amount has been disallowed in the employer’s tax calculation
and
the employer has either reimbursed the employee’s expenses
or
paid a round sum allowance specifically for entertaining

(ITEPA 2003, ss.356–357)

Question 4

How is treated employment income originating from reimbursment of fully allowable expense by employer?

Answer 4

is exempt income

(ITEPA 2003, s.289A)

Question 5

How are taxed round sum allowance on employee?

Answer 5

• usually exempt from tax if only reimburses business cost incurred
• if not, its taxable at first instance with deduction that can be claimed on allowable expenses (excl. client entertaining)