Reply to: Expenses you are claiming

[boredsenseless]

Hmm.. I've been claiming 7 day london travelcards for ages and my (normally good) accountants haven't told me not to. What happens if it does get ruled as a BIK? Do you just pay tax on it or are they likely to add a fine as well?

The biggest issue here is do you use it for your own private travel? If you do then you have three options

1) Keep quiet and hope
2) Document all journeys and claim the percentage used for work not the full face value
3) Buy a second ticket for private travel (but then you wouldn't need the work one would you?)

[Lucifer Box]

Hmm.. I've been claiming 7 day london travelcards for ages and my (normally good) accountants haven't told me not to. What happens if it does get ruled as a BIK? Do you just pay tax on it or are they likely to add a fine as well?

Most likely is a bill for tax plus interest. Fines are normally reserved for deliberate fraud (e.g. claiming expenses without receipt). Of course, you may never get investigated and no one will be any the wiser. Don't lose any sleep over it unless we're talking serious wonga - just start documenting business travel fully and correctly in future.

[GeorgeGregan]

Denny is correct. Season or period tickets are not kindly viewed by HMRC as legitimate expenses and stand a chance of being reclassified as a benefit in kind come the next inspection.

Take the hit and buy daily tickets to be on the safe side.

Hmm.. I've been claiming 7 day london travelcards for ages and my (normally good) accountants haven't told me not to. What happens if it does get ruled as a BIK? Do you just pay tax on it or are they likely to add a fine as well?

[Lucifer Box]

Or a good tax avoidance measure could be to bicycle to work and pay some poor sod half price for their travel ticket at the end of a working day.

You can claim a mileage allowance if you cycle to work (20p/mile).

[Denny]

Absolutely right, Malvolio, that is a different kettle of fish altogether.

Anyways, to whoever originally asked the question, claiming a one week/month/whatever London travelcard when you live in London anyway ain't going to stand up to scrutiny and will almost certainly be ruled to be a BIK with tax to pay. Buy a daily return and keep the receipt, then there's no argument.

Or a good tax avoidance measure could be to bicycle to work and pay some poor sod half price for their travel ticket at the end of a working day.

[Lucifer Box]

Absolutely right, Malvolio, that is a different kettle of fish altogether.

Anyways, to whoever originally asked the question, claiming a one week/month/whatever London travelcard when you live in London anyway ain't going to stand up to scrutiny and will almost certainly be ruled to be a BIK with tax to pay. Buy a daily return and keep the receipt, then there's no argument.

[malvolio]

Unless, like me, you're the sort of sad plonker that commutes an infeasible distance (Bath to the City in my case, 3-4 days a week) which is defensible as a bloody necessity and not a BIK.

[Lucifer Box]

Denny is correct. Season or period tickets are not kindly viewed by HMRC as legitimate expenses and stand a chance of being reclassified as a benefit in kind come the next inspection.

Take the hit and buy daily tickets to be on the safe side.

[Denny]

surely if a 7 day train ticket is cheaper than 5 x 1 day then they can't complain about that? It's in your companies interests to go for the cheaper option.

No they would rather you paid £40 return to get to the business site and then claim it as tax deductable than allow you to pay £20 that permits you to use the same ticket to roam across town free of charge to the cinema after work.

Sad, but true! Since when did the Whitehall pen pushers in grey suits have any common sense?

[boredsenseless]

surely if a 7 day train ticket is cheaper than 5 x 1 day then they can't complain about that? It's in your companies interests to go for the cheaper option.

Oh dear you assumed that Common Sense might prevail in the machinery of allowable expenses!

[~Craig~]

surely if a 7 day train ticket is cheaper than 5 x 1 day then they can't complain about that? It's in your companies interests to go for the cheaper option.

[boredsenseless]

I would not travel by using any kind of ticket that embraces a 7 day a week all-in price. Otherwise the IR could view it as a private use ticket too. It's virtually impossible to justify a pro-rate public travel rates based on the ticket price overall because the travel flexibility ensures that you could done anything and gone anywhere that day not just attended work.

Always keep your travel expenses separate from your private use travel expenses then you can unequivocally prove that you can make a full claim with tickets to prove it.

The IR don't take kindly to tariffs on mobile phones either for claiming phone calls because inclusion minutes could also be used for private calls and technically speaking you're not paying for the individual calls anyway you're only paying for the privilege of not paying for them!!!

Agree in principle - although if your seven day ticket is for London and you can prove that you live in Newcastle and come down Monday and go home Friday it won't be an issue.

The best way to get round Mobile tariffs is to switch to a business tariff instead of claimimg back a personal line.

[Denny]

I would not travel by using any kind of ticket that embraces a 7 day a week all-in price. Otherwise the IR could view it as a private use ticket too. It's virtually impossible to justify a pro-rate public travel rates based on the ticket price overall because the travel flexibility ensures that you could done anything and gone anywhere that day not just attended work.

Always keep your travel expenses separate from your private use travel expenses then you can unequivocally prove that you can make a full claim with tickets to prove it.

The IR don't take kindly to tariffs on mobile phones either for claiming phone calls because inclusion minutes could also be used for private calls and technically speaking you're not paying for the individual calls anyway you're only paying for the privilege of not paying for them!!!

[~Craig~]

I think you might find the one in orange above is usually counted as a disallowable expense since it can be seen to be non-inclusive of all genders and sexual orientations!

Never been in one myself but don't you get quite a few women in there these days?

[boredsenseless]

I would disagree with this, although I also run direct contracts and partner with vendors so this may make a difference. I regularly meet clients/suppliers etc and claim the expense of the 'entertainment'. This could be a curry, a few beers, a night in a cocktail bar or even a bottle of champagne in a lap-dancing club. This is all 'relationship-building'.

All goes through the books...

I think you might find the one in orange above is usually counted as a disallowable expense since it can be seen to be non-inclusive of all genders and sexual orientations!