New guidance on commuting expenses for hybrid workers
You probably know that you can’t claim tax relief for the expenses associated with travelling to your usual place of work. However, what is the position if you're a “hybrid” worker? The guidance on this has recently been updated for clarity, so what's the answer?
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Accounting for VAT if there is no cash payment
Your business has submitted repayment returns for the last two quarters and you are concerned that you might have underpaid output tax on some supplies where no money has changed hands. Are your concerns justified?
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Treatment of distributions under review
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Tax relief on equipment you haven’t paid for (yet)
The timing of tax relief for purchases of equipment isn’t straightforward when payments are delayed or goods are purchased through hire purchase (HP) agreements. How can you use these rules to your advantage and get tax relief before you’ve paid the final invoice?
The rules surrounding which journeys you can and cannot claim tax relief for travel expenses are complex, resulting in HMRC publishing guidance with over 50 examples. As a general rule, there is no tax relief for the cost of a journey which is ordinary commuting or private travel. Ordinary commuting means travel to and from a permanent workplace.
For hybrid workers, a question arises as to whether their home or their office should be considered to be their permanent workplace. The guidance on the tax deductibility of commuting expenses for hybrid workers (those who have the flexibility to choose whether to work from home or in the office) has been updated. This puts beyond doubt that journeys from home to a base office will be ordinary commuting. Therefore, tax relief is not available for such costs.
Note that the situation is different if the homeworking arrangements are not voluntary. For example, if you must work from home as a requirement of your job, you should be able to claim tax relief for expenses incurred travelling to your employer.
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