Need receipt from flights 2-3 years ago
Aug 22, 2018, 1:34 am
#16
Join Date: Jul 2011
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The cost of an upgrade would not meet the ‘necessary’ test where the cost of the lower class ticket was borne by the employer unless there was a medical reason why the employee could not travel in the lower class cabin. The ‘necessary’ test applies to the additional spending in question and not the requirement to travel.
No. The test is whether the travel is necessary, not that the particular class of travel is necessary. This is a direct quote from HMRC;
Fiona has to travel on business. Her employer pays her a travel allowance sufficient for the purchase of a standard class railway ticket. Fiona buys a first class ticket. The allowance paid is taxable but tax relief is available for the full expenditure actually incurred – the cost of the first class ticket.
Aug 22, 2018, 2:04 am
#17
Join Date: Dec 2014
Programs: BA (silver)
Posts: 12
You have justified why travelling in business class is a valid business expense. I do not see why HMRC would distinguish between who paid what, but that is a personal view. HMRC disallowing certain classes of employees from flying on the same business in a higher cabin is surely some form of discrimination (even though they will be paying a good portion out of their own pocket)?
Indeed the views across the tax profession alone seem to differ following a brief Google search. I guess submitting these claims is to be considered in line with your risk profile.
Apologies in advance for straying a tad off-topic!
Aug 22, 2018, 2:20 am
#18
Join Date: Dec 2014
Programs: BA (silver)
Posts: 12
I think I meet the "necessary" test since the guide mentions that it has to do with the fact that a trip is required and doesn't mention anything regarding class of travel to meet that requirement.
Additionally, the guidance is clear that HMRC wouldn't consider an expense unreasonable just because a cheaper alternative is available. The guide goes as far as giving an example of an employee who gets reimbursed by the employer for standard class travel and buys a First class ticket, making it clear that the difference is eligible for tax relief.
Also, other people, including c-w-s said in the thread quoted above that they successfully done this.
I've resubmitted my self-assessment for last year as I had those receipts available and will update this thread when I hear more.
Additionally, the guidance is clear that HMRC wouldn't consider an expense unreasonable just because a cheaper alternative is available. The guide goes as far as giving an example of an employee who gets reimbursed by the employer for standard class travel and buys a First class ticket, making it clear that the difference is eligible for tax relief.
Also, other people, including c-w-s said in the thread quoted above that they successfully done this.
I've resubmitted my self-assessment for last year as I had those receipts available and will update this thread when I hear more.
HMRC's manuals can't cover every scenario. Look at the legislation (ITEPA 2003):
336. Deductions for expenses: the general rule
(1)The general rule is that a deduction from earnings is allowed for an amount if—
(a)the employee is obliged to incur and pay it as holder of the employment, and
(b)the amount is incurred wholly, exclusively and necessarily in the performance of the duties of the employment.
(2)The following provisions of this Chapter contain additional rules allowing deductions for particular kinds of expenses and rules preventing particular kinds of deductions.
(3)No deduction is allowed under this section for an amount that is deductible under sections 337 to 342 (travel expenses).
337Travel in performance of duties
(1)A deduction from earnings is allowed for travel expenses if—
(a)the employee is obliged to incur and pay them as holder of the employment, and
(b)the expenses are necessarily incurred on travelling in the performance of the duties of the employment.
(2)This section needs to be read with section 359 (disallowance of travel expenses: mileage allowances and reliefs).
Unless you were (a) obliged to incur the costs of an upgrade, and (b) the cost was necessary for the performance of your duties, then no deduction is available.
Aug 22, 2018, 3:04 am
#19
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Just to clarify, I'm on self-assessment, and PAYE, however (a) my tax affairs are complex and (b) my claimed upgrades in 2012 would relate to spending against a travel allowance.
