Chapter 16 & 21: Employment Income

Question 1

Employment Income

What Does ITEPA 2003 Deal With?

Answer 1

The Taxation of Employees & Their Employment Income.

Question 2

Employment Income

Who Can The Term ‘Employee’ Refer to?

Answer 2

Office Holders.

Such as Company Directors.

Question 3

Employment Income

What Figure Represents ‘Employment income’ in The Tax Computation?

Answer 3

‘Net Taxable Earnings’.

Question 4

Employment Income

For Cash Payments, Employees Are Taxed The Earlier of:

Answer 4

• ‘Rule 1’ - The Date Payment is Physically Made; or
• ‘Rule 2’ - The Date Legal Entitlement Arises.

For Most Employees, These Dates Are Similiar.

Question 5

Employment Income

What Can The Date of Receipt Differ From?

Answer 5

The Date Services Were Performed.

Most Notably, Bonuses.

Question 6

Employment Income

What Does Section 336 of ITEPA 2003 Lay Out?

Answer 6

The General Rules For Deductions From Taxable Earnings.

Question 7

Employment Income

When is a Deduction From Employment Income Allowed?

Answer 7

When it’s ‘Wholly, Exclusively & Necessarily’ Incurred For Employment.

Question 8

Employment Income

‘Ordinary Commuting’ is Defined as Travel Between:

Answer 8

The Employee’s Home & Permanent Workplace.

(Section 338 ITEPA 2003 - Denied Deductions)

Question 9

Employment Income

What is The Definition of a ‘Temporary Workplace’?

Answer 9

A Place an Employee Attends:
* To Perform a Task of Limited Duration; or
* For Some Other Temporary Purposes.

Allowable Travel Expenditure.

Question 10

Employment Income

What Can The Cost of Business Travel include (Besides The Travel itself)?

Answer 10

Subsistence Costs Attributable to Travel.

(Accomodation, Sustenance Etc )

Question 11

Employment Income

Professional Fees & Subscriptions Are Deductible Provided They:

Answer 11

• Relate to Employment; and
• Paid to an ‘Approved Body’.

Question 12

Employment Income

How Are Allowable Expenses Often Dealt With?

Answer 12

Submission of an Expense Claim to The Employer.

Question 13

Employment Income

When Should Allowable Expenses Not be Deducted?

Answer 13

If Reimbursed For The Personally Incurred Expense.

Exempt Income.

Question 14

Employment Income

What Are ‘Round Sum Allowances’?

Answer 14

A Fixed Amount of Cash Paid to Employees in Advance.

To Cover Their Expenses For a Particular Period.

Question 15

Employment Income

A Round Sum Allowance is Chargeable to Tax if Either:

Answer 15

• It Contains a Profit Element; or
• Reimburses Non-Qualifying Expenses.

Question 16

Employment Income

When is A Deduction Against an Allowance Disallowed?

Answer 16

If Part of a Round Sum Allowance is Spent on Client Entertaining.