Blog

Unexpected Tax Deductions

PAYMENTS AND BENEFITS WHICH ARE NOT TAXABLE

Covid-19 has drastically changed our economic life. It is very likely that this disaster has affected your household income.  You want to save every single coin and you try to do without the things that you got used to. Yeah, you probably, don’t need that gym membership… Of course, you do!

Whole and exclusive condition

In general your expenses could be deducted  only when they are “wholly and exclusively” for your business. In fact, some expenses have more than one purpose.

Let’s say, your shoes. You do need your shoes to leave your home and go to work, but that is not  “wholly and exclusively” for your business. So, this one will not work! A different example would be your car. Imagine you are a lorry  driver and you deliver goods around your country. In that case, a lorry will be “wholly and exclusively” for your business. Here you can apply the tax deduction.

Well, sport, may also be a necessity for your business. Training  is “an incidental or unavoidable private advantage”. On the other hand, it could be an exclusive business purpose. No doubt, there is a personal advantage, but at the same time the special training enables you to do your  job.

Theoretically a deduction is possible, but it may be a difficult task to complete. If the expenses are directly related to the requirements of your job, they are most likely probably tax-deductible. Show a clear business need and that any personal benefit is just an unavoidable side effect.

Medway accountant
More questions call us