Tool and Transport Expenses

Discussion in 'Accounts & Finance' started by Gareth83, Oct 13, 2020.

  1. Gareth83

    Gareth83 UKBF Newcomer Free Member

    25 0
    A few of my boys on the books provide their own tools and transport. Can I pay them a flat rate expense of say £250 per month to include their own transport and use of tools?

    I understand this may be allowable under direct expenses?
     
    Posted: Oct 13, 2020 By: Gareth83 Member since: Dec 18, 2019
    #1
  2. Scalloway

    Scalloway UKBF Legend Free Member

    16,477 3,486
    An employee can be reimbursed for use of their own vehicle at the rate of 45p per mile. This is not taxable. Anything else would be part of their taxable pay.
     
    Posted: Oct 13, 2020 By: Scalloway Member since: Jun 6, 2010
    #2
  3. Gareth83

    Gareth83 UKBF Newcomer Free Member

    25 0
    Are you sure:

    Check:
    Exemption for paid or reimbursed expenses (480: Chapter 2)

    2.1

    Section 65

    From 6 April 2016 all dispensations stopped. Almost all expenses or benefits that might previously have been covered by a dispensation will be within an exemption and will not need to be reported. Where the employer is satisfied that either all the expenses or benefits, or both, that they provide would be fully covered by the expenses exemption they do not need to show these on forms P11D or deduct tax if they payroll benefits.

    Common items that will be covered by the exemption include:

    • travel, including subsistence costs associated with business travel
    • business entertainment expenses
    • credit cards used for business
    • fees and subscriptions
     
    Posted: Oct 13, 2020 By: Gareth83 Member since: Dec 18, 2019
    #3
  4. Surinder Singh

    Surinder Singh UKBF Newcomer Free Member

    6 1
    If they can provide you transport expenses such as train ticket etc. you can pay them the expenses. Otherwise they can claim 45p per mile up to 10000 miles.

    It is not clear from your quote if they are employed or self employed. Gareth83 reply will suit you if they are employed.
     
    Posted: Oct 13, 2020 By: Surinder Singh Member since: Oct 13, 2020
    #4
  5. bodgitt&scarperLTD

    bodgitt&scarperLTD UKBF Regular Full Member

    385 161
    'On the books' is tradie speak for directly employed.
     
    Posted: Oct 13, 2020 By: bodgitt&scarperLTD Member since: Nov 26, 2018
    #5
  6. UK Contractor Accountant

    UK Contractor Accountant UKBF Legend Full Member - Verified Business

    5,098 899
    yes - not to be confused with off the books which they also use for tradie speak;)
     
    Posted: Oct 13, 2020 By: UK Contractor Accountant Member since: Sep 18, 2013
    #6
  7. Gareth83

    Gareth83 UKBF Newcomer Free Member

    25 0
    I am talking on the books. Majority I use are subbies so they can sort their own expenses

    The two who work 4 days a week for me via PAYE require reimbursing for travel, providing their own power tools, sundries and so forth.

    I was wondering if I could pay them a flat rate of say £200 per month to cover 'expenses' as an agreed rate?
     
    Posted: Oct 13, 2020 By: Gareth83 Member since: Dec 18, 2019
    #7
  8. Adam93

    Adam93 UKBF Regular Free Member

    373 80
    The bench mark for employees expenses is far higher. You can pay 45p per mile for the first 10,000 miles then 25p thereafter, per tax year.

    There are other flat rate expenses, but not for tools. You would have to increase their taxable pay to compensate.

    For an employee to be entitled to tax relief, the expenses have to be incurred ‘wholly, exclusively and necessarily’ for the reason of employment which is a very high benchmark.

    you could remind them of their additional benefits of being an employee such as pensions, holiday pay, SSP and statutory protections.
     
    Posted: Oct 13, 2020 By: Adam93 Member since: Jan 18, 2018
    #8
  9. UK Contractor Accountant

    UK Contractor Accountant UKBF Legend Full Member - Verified Business

    5,098 899
    There is a flat rate tool allowance for certain trades which the employee can claim without the need for receipts.

    This is given by increasing their tax code allowance which is used to calculate tax deductions each pay period.
     
    Posted: Oct 13, 2020 By: UK Contractor Accountant Member since: Sep 18, 2013
    #9