How to mitigate PAYE

[PugwasHDJ80]

apart from any mileage claims, and cost of professional fees required for my job, what else can i do to mitigate my PAYE payments?

[Eric Mc]

Take a salary reduction?

Are you an employee or a director of your own limited company?

[PugwasHDJ80]

Employee. Haven't been one for a while, and no chance of going ltd co unfortuantely- contract precludes that.

not so keen on the first option

[MagicalTrevor]

Pay more into your pension?

[Eric Mc]

Does you employer offer any salary sacrifice schemes that you could make use of -

child care costs?
bicycle scheme?

[PugwasHDJ80]

possibly- will have to investigate.

What about claiming back susbsistence for food not reimbursed by the company whilst staying away?

[sparkypups]

Additional ideas No. 1

Have work shirts that are embroidered with the company name and then claim weekly laundry expense

[Eric Mc]

PugwasHDJ80 said:

possibly- will have to investigate.

What about claiming back susbsistence for food not reimbursed by the company whilst staying away?

An expense is only claimable if it is incurred "Wholly, excluisvely and NECESSARILLY" for the purpose of the employment. Most costs fail the "necessarilly" test.

This is different for self-employment where the "necessarilly" element does not apply.

[Kudos]

sparkypups said:

Additional ideas No. 1

Have work shirts that are embroidered with the company name and then claim weekly laundry expense

Worth something like £50-60 a year, I suspect the shirts will cost more!

[Eric Mc]

If you are paying the laundry bill for your work uniform - and keeping them clean is a job requirement - then yes, you can make a tax relief claim for the cost of the cleaning.

It meets the "necessarilly" test, you see.

[davethebunny]

Can you do this even if you don't pay any tax?

My Mrs works part time delivering pizzas and is earning under the allowance so doesn't have any tax deduction.

Can she expect a cheque from HMRc?

[Eric Mc]

davethebunny said:

Can you do this even if you don't pay any tax?

My Mrs works part time delivering pizzas and is earning under the allowance so doesn't have any tax deduction.

Can she expect a cheque from HMRc?

HMRC is not Santa Claus. They will refund tax to you if you have paid too much in any given tax year. How can they refund tax that you haven't paid in the first place?

(Edited to insert a crucial word - i.e. "not").

Edited by Eric Mc on Wednesday 14th March 09:34

[Jonathan27]

You can offset losses in a small business, against you PAYE. HMRC requires all companies to intend to make a profit, but you can help it if you co has a lot of expenses like cars, meals ... Yet fails to win a customer!

Read between the lines

[RizzoTheRat]

MagicalTrevor said:

Pay more into your pension?

This. I've started bunging left over money at the end of the year in to a private pension scheme. I pay in a chunk, the tax man pays in a further 25% as I've paid basic rate tax on it, and I'll then get a tax rebate as well to cover the higher rate tax.

[Eric Mc]

Jonathan27 said:

You can offset losses in a small business, against you PAYE. HMRC requires all companies to intend to make a profit, but you can help it if you co has a lot of expenses like cars, meals ... Yet fails to win a customer!

Read between the lines

Don't use the word company when you don't really mean "company". If a business is run through a limited company, then it's losses can only be used against company income and profits. The proprietor's tax affairs are completely separate.

It's losses in sole traderships and partnerships that can be ioffset against other PERSOMAL taxed income.

[98elise]

Eric Mc said:

An expense is only claimable if it is incurred "Wholly, excluisvely and NECESSARILLY" for the purpose of the employment. Most costs fail the "necessarilly" test.

This is different for self-employment where the "necessarilly" element does not apply.

Its a shame you can't claim for suits/shirts. I wear a suit outside of work probably once every 3-4 years, yet half my wardrobe is suits and shirts. I have no choice in wearing one at work, its simply a uniform that I'm expected to pay for.

[sparkypups]

98elise said:

Eric Mc said:

An expense is only claimable if it is incurred "Wholly, excluisvely and NECESSARILLY" for the purpose of the employment. Most costs fail the "necessarilly" test.

This is different for self-employment where the "necessarilly" element does not apply.

Its a shame you can't claim for suits/shirts. I wear a suit outside of work probably once every 3-4 years, yet half my wardrobe is suits and shirts. I have no choice in wearing one at work, its simply a uniform that I'm expected to pay for.

I think it is fair to say that if it is written into your employment contract that you have to purchase and maintain a uniform (that consists of a suit and shirt). The suit and shirt becomes a uniform by the addition of some form of discrete embroidery that indentifies the company for example) it then becomes "Wholly, exclusively and NECESSARILY".

[Eric Mc]

Correct. A permanenetly attached (but nota badge) corporate logo will do the trick.

[RizzoTheRat]

Wasn't there a court case over this with a barrister claiming he should be able to claim suits as a work expense but the hmrc won?

[Eric Mc]

RizzoTheRat said:

Wasn't there a court case over this with a barrister claiming he should be able to claim suits as a work expense but the hmrc won?

There have been numerous cases like this. There was case concerning a barrister's gown and wig as well.