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Where Taxpayers and Advisers Meet

Allowance/expenses

Riverbank
Posts: 23
Joined: Thu Jul 19, 2018 1:20 pm

Allowance/expenses

Postby Riverbank » Sat Jun 08, 2019 9:36 am

Good morning! I am a sole trader. I have recently been away for business on a short contract where I was paid a fixed weekly allowance to cover meals & accommodation. The allowance was not enough to cover accommodation so I paid the excess myself.

My question is for tax, can I claim all of my expenses for the week or some of them that took me over the allowance limit?

Thank you!

bd6759
Posts: 3090
Joined: Sat Feb 01, 2014 3:26 pm

Re: Allowance/expenses

Postby bd6759 » Mon Jun 10, 2019 7:07 pm

The income, expenses and allowances that you received are all part of your self employment turnover, and should be included as income in your accounts.

The expenses in your accounts (for tax purposes) are those that you incured solely for the purposes of your trade. There is not nearly enough information about your trade to determine if the travel expenses are allowable. (Travel includes accommodation and subsistence). The default view is that travel to and from your home is generally not an allowable expense unless your role is itinerant in nature, or the journey was out of the ordinary.

Riverbank
Posts: 23
Joined: Thu Jul 19, 2018 1:20 pm

Re: Allowance/expenses

Postby Riverbank » Mon Jun 10, 2019 10:37 pm

Thank you for responding.

The 7 day one off trip was solely for trade purposes at the other end of the country so there was no commuting back and forth to home.

I will include the allowance payment in my income. My query is can I claim the excess hotel expense that was over the allowance paid?

bd6759
Posts: 3090
Joined: Sat Feb 01, 2014 3:26 pm

Re: Allowance/expenses

Postby bd6759 » Mon Jun 10, 2019 11:19 pm

Thank you for responding.

The 7 day one off trip was solely for trade purposes at the other end of the country so there was no commuting back and forth to home.

I will include the allowance payment in my income. My query is can I claim the excess hotel expense that was over the allowance paid?
Of course. The amount you paid goes into your accounts as an expense.

Riverbank
Posts: 23
Joined: Thu Jul 19, 2018 1:20 pm

Re: Allowance/expenses

Postby Riverbank » Mon Jun 10, 2019 11:25 pm

Thanks but I’m asking about the amount I have personally paid for business accommodation away from home over and above the allowance that’s been paid into my account. Can I claim this excess amount as an expense?

bd6759
Posts: 3090
Joined: Sat Feb 01, 2014 3:26 pm

Re: Allowance/expenses

Postby bd6759 » Mon Jun 10, 2019 11:33 pm

You have personally paid the whole amount out of the income given to you. That is the amount you put in your accounts.

Riverbank
Posts: 23
Joined: Thu Jul 19, 2018 1:20 pm

Re: Allowance/expenses

Postby Riverbank » Mon Jun 10, 2019 11:42 pm

Thanks for responding. I have paid more than the allowance I have been given for accommodation as it wasn’t enough in an expensive city. Can I claim this excess amount as an expense?

bd6759
Posts: 3090
Joined: Sat Feb 01, 2014 3:26 pm

Re: Allowance/expenses

Postby bd6759 » Tue Jun 11, 2019 7:51 am

I'm not sure how many different ways and say that.

YES!

robbob
Posts: 2800
Joined: Wed Aug 06, 2008 4:01 pm

Re: Allowance/expenses

Postby robbob » Tue Jun 11, 2019 8:10 am

Good morning! I am a sole trader. I have recently been away for business on a short contract where I was paid a fixed weekly allowance to cover meals & accommodation. The allowance was not enough to cover accommodation so I paid the excess myself.

My question is for tax, can I claim all of my expenses for the week or some of them that took me over the allowance limit?
Basically when you are sole trader anything you and paid relating to duties performed or associated costs is normally classified as sales for tax and vat purposes (note there can be exceptions to this general rulehere)
Practicably speaking you shouldn't really refer to the money received as a "fixed weekly allowance" - this is basically additional sales that are added onto your other sales when calculating your turnover.

Ok now that is taken care of as bd6759 advises your expenses are what they are and they are claimed based on what you have paid out - it makes no difference if your actual expenses are more than your "received allowance sales income" . That's business sometimes costs outweigh income for certain items hmrc don't have a problem with that as long as everything is on a commercial basis.

Riverbank
Posts: 23
Joined: Thu Jul 19, 2018 1:20 pm

Re: Allowance/expenses

Postby Riverbank » Tue Jun 11, 2019 8:18 am

Thank you! That is clear now.

The “allowance” is what the company contracting me calls it - a separate amount in addition to the fee for the work. So when I invoice I need to add VAT to the allowance element as well as the fee.


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