Example 1 Kerry uses her own 1800cc motor car for business travel. During 2022/23 she drove 12,000 miles in
the performance of her duties. Her employer pays her 30p per mile.
Compute the allowable deduction that the Kerry can claim against her employment income.
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6. Employment income pro forma £
Salary
X
Bonus/commission
X
Benefits
X
Reimbursed expenses
X
Cash vouchers
X
–––
X
Less: Allowable deductions
Expenses incurred wholly, exclusively and necessarily
(X)
Contributions to employer’s occupational pension scheme
(X)
Subscriptions to professional bodies
(X)
Charitable donations: payroll deduction scheme
(X)
Travel and subsistence expenses
(X)
Use of own car – mileage allowance
(X)
(X)
–––
Employment income
X
–––
Allowable deductions: Expenses incurred by an employee are allowable deductions if the expense is incurred wholly,
exclusively and necessarily in the performance of duties of the employment.
Examples of deductible expenses incurred by the employee include:
๏
Professional subscription fees
๏
Charitable donations under the payroll deduction scheme
๏
Contributions into an occupational pension scheme
๏
Travel (see below) and other business related expenses
๏
Capital allowances for plant and machinery necessarily provided for use in the employment
duties.
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