Am i costing myself money

[ContractorUK99]

Previous have been through a Limited Company but am temporarily using an Umbrella

I currently travel from London to North by Train weekly and stay away.

I have been travelling standard class and been using discount websites to get train tickets as cheap as possible.

However i am not sure what happens in regards to Tax am i actually costing myself money here?

Should i be actually be getting the most expensive ticket therefore giving myself largest expenses and better Tax Relief.

I thought that at the end of the day i would receive relief on the expenses but it wouldnt affect my take-home pay. It would just be claimed back out of the same pot and therefore if i spent more it would come out of my money once all calculated?

Thanks

[TheFaQQer]

The more money you spend as expenses, the less money can be paid out as income.

Why not try first class travel and see what impact that has on your take home pay?

[Clare@InTouch]

You're still paying for the ticket, so buying something more expensive may result in less tax but also less income.

In a very simple example to show how it works:

Say you have income of £100.
Buy a train ticket for £20 and you have £80 left. You'll pay tax on that £80 at say 20% = £64 in your pocket
Buy a ticket for £40 and you'll have £60 left. You'll pay tax on that £60 at say 20% = £48 in your pocket

You have paid £4 less in tax, but your overall income is less because the ticket was more expensive.

In other words don't spend more money to save tax, it doesn't save you money overall.

[Contreras]

Previous have been through a Limited Company but am temporarily using an Umbrella

I currently travel from London to North by Train weekly and stay away.

I have been travelling standard class and been using discount websites to get train tickets as cheap as possible.

However i am not sure what happens in regards to Tax am i actually costing myself money here?

Should i be actually be getting the most expensive ticket therefore giving myself largest expenses and better Tax Relief.

I thought that at the end of the day i would receive relief on the expenses but it wouldnt affect my take-home pay. It would just be claimed back out of the same pot and therefore if i spent more it would come out of my money once all calculated?

Thanks

Think of it as you are getting a percentage discount on every rail ticket. First class ticket will still cost more than standard class but only you can decide if it's worth it.

It's kind of answered here already:
http://forums.contractoruk.com/busin...ml#post1956981

[Wanderer]

Make sure you also claim for the flat rate meal allowance of £5/£10/£15 if you are travelling on business and you have incurred an expense for food (however small the expense was) because this reduces your tax too.

[LisaContractorUmbrella]

You should also bear in mind that, if you are using an umbrella company 'temporarily' and it will only be for a single assignment you will have no entitlement to tax relief on travel costs anyway

[northernladuk]

Should i be actually be getting the most expensive ticket therefore giving myself largest expenses and better Tax Relief.

That's a classic!!

I would hate to see your LTD's books if that's your understanding. Hope you haven't been booking rooms at the Dorchester as well!!

This isn't a journey you have been doing for over 2 years is it?

[LisaContractorUmbrella]

That's a classic!!

I would hate to see your LTD's books if that's your understanding. Hope you haven't been booking rooms at the Dorchester as well!!

This isn't a journey you have been doing for over 2 years is it?

If you're going to do it properly you get a suite at the George Cinq and then get flown to the gig each day by private helicopter

[northernladuk]

If you're going to do it properly you get a suite at the George Cinq and then get flown to the gig each day by private helicopter

Bloody show off

[LisaContractorUmbrella]

Bloody show off