According to an article in the Financial Times this weekend, the soaring cost of tax refunds for work expenses such as travel, including mileage payments, & professional subscriptions has attracted the attention of HMRC.
The cost of tax relief on such expenses increased by a quarter to £800m in the five years to 2014-15.
HMRC said it had no plans to remove the tax relief on employee expenses but it described the cost as “significant” and said it wanted to understand it better. It has asked for input from employers and others “to ensure the relief is being used in the way it was intended”.
One area that we feel may be on HMRC’s radar is the use of own cars for business mileage.
A claim can be made for the difference between 45p a mile (the maximum allowed by HMRC) and the amount reimbursed by your employer. It is very important that you retain records showing the business miles that you have driven, to support of any claim that you make. It sounds to us like HMRC may start asking to see the records very soon!
For more information, please contact Lesley Sutton on 01484 550037 or email email@example.com.