Tax deductible expenses

I am in full time employment and pay 40% tax. Last year I also did some weekend jobs, where I paid the basic rate of tax. What expenses can I show on my tax return to reduce the burden?

Pravin Jivan, London

You don't say exactly what work you do, but I assume the jobs were all employments (as opposed to self-employments).

It sounds as if not enough tax was deducted from the amount paid for your weekend jobs, where in your case you should also have been paying 40% tax and not just the basic rate.

Your question suggests that you have realised this and are sensibly looking for ways to reduce the tax bill.

The expenses you can claim depend on the job concerned and what was involved.

The point to remember, where employments are concerned, is that expenses must be incurred "wholly, exclusively and necessarily" in order for them to be tax-deductible.

This test can be difficult to pass but 'necessarily' is key - did all employees in your position have to pay these expenses?

Straightforward business expenses are usually pretty obvious, but will often have been met directly by your employer.

Where the employer pays for expenses you can normally claim those expenses for tax, but the receipt of the expenses also counts as income - so you are no better off.

If you had to use your car for business purposes, or had business travel expenses, there are helpful Inland Revenue leaflets (have a look at the Inland Revenue website), but be aware that your ordinary commuting or private travel will not qualify as business expenses.

Other possibilities include professional subscriptions, protective clothing, uniforms, or telephone calls made in the course of your work.

Don't forget to check with colleagues what they are claiming - corporate human resources or payroll departments will often also know what's usually claimed by those in your role.

If basic expenses aren't feasible, look at making additional pension contributions to reduce your overall charge to tax.

If you contribute before 31 January next year, you could elect to carry the payments back into the previous year (2002/03) and get tax relief for them which could solve your problem.

Talk to an Independent Financial Advisor, who will be able to tell you if you have scope to do this.

Leonie Kerswill, director, private client services, PwC

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