Income Tax Revenue Uk
July 16th, 2008
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Question: In UK is cost of travel between home and workplace added to my wages tax free ?
My wage is £7 per hour worked but I can also claim travel costs at 40p per mile. Travelling costs are getting more and more expensive whether I use train or my own car. But what exactly is the position regarding income tax. Legally should what employer pays me back have income tax deducted by Inland Revenue?
Answer: It somewhat depends on the circumstances of your employment.
If the travel costs are incurred in the course of your business then they are a legitimate business expense, not income and therefore do not attract income tax, this is why there is an agreed amount for travel per mile as at this amount (say 40p per mile) the revenue accepts that this will only cover your costs, not leave you any richer.
Note however that this amount only applies to car travel, any public transport costs should be reimbursed at cost…i.e. the fare you paid. If you get more than that, then the excess is income and taxable.
The above would be true if you were say a repair man or similar who was sent to different locations all the time.
However if your costs are just between home and your ‘normal place of business’, then that is regarded as income and tax must be paid on whatever you recieve.
The above would apply if you were say a security guard who worked in different places from time to time.
Seems harsh I know, but that’s the way it is.
The best thing to do is to ‘phone the revenue and ask, they aren’t demons (well not all of them) and you can then explain the exact detail of your circumstances
Good luck
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