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Tax Deductions

[tæks dɪˈdʌkʃᵊnz]



Tax Deductions are a way of claiming tax relief on business expenditure that must have been spent on things that are "wholly and exclusively used for business.

More detail:

Tax Deductions are a way of claiming tax relief on qualifying business expenditure. Business expenditure must be spent on an item or service that is "wholly and exclusively" for business to qualify as a tax deduction.

An individual or business must keep receipts of spending and claim within four years of the end of the Tax Year that the money was spent.

Tax deduction can either be used to reimburse after paying for an expense already, or after an employer has reimbursed an expense but the individual paid tax on it.

Employees can claim some tax relief through the PAYE system. HMRC just changes an employee's Tax Code to give them more Take-home Pay that year.

Self-employed individuals or employees claiming more than £2500 must submit a Self Assessment.

Back to Taxionary

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