Chapter 3: Income from employment Flashcards
When are employees taxed?
Including the exception
When they are received.
Exception: when employee becomes entitled to payment, if earlier than the date of receipt
Earlier of date of entitlement and date of receipt.
Directors can manipulate the timing of their earnings, there are extra rules.
When are directors deemed to receive earnings?
Earliest of:
-Received
-Entitled
-When earnings are credited in accounts
-When earnings are determined:
1. Before the end of the period of account = the end of that period
2. After the end of the period of account = date the earnings are determined
Criteria for allowable expenditure for employees
Wholly
Exclusively
Necessarily
Relief is given if an employee travels directly from home to temporary workplace
-How long is a temp work place?
-Is relief available if an employee passes permanent work place on the way to the temporary work place provided?
Temp work place - under 24 months
Yes if the stop at permanent work place is incidental
If employee performs duties in more than one work place for one employer, is relief available?
Cost of travelling between the places are allowable
Allowance for employees who have passengers in the car?
5p per mile for each fellow employee who is a passenger
If payments are less than statutory amount for travel
Allowable deduction on shortfall
An allowable deduction is not available in respect of passenger payments if employer rate is less than 5p per mile
Bicycle allowance
20p per mile
Occup Pension contributions and contributions under payroll scheme
Deduct from gross salary
Professional subscription and Employment related insurance premiums
Deductible from taxable income if paid by employee
Paying PAYE electronically
Large employers over 250 ee’s pay electronically
Deadline is 22nd of the month following the tax concerned. Tax months run 6th to 5th
Paying PAYE quarterly
If doesn’t exceed £1,500
