Personal Tax Return Client (not self employed) - can my fee be entered as an expense in their tax return?

Personal Tax Return Client (not self employed) ...

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I'm preparing a tax return for a private individual who is paid by PAYE and has no self employment income, property income, etc.  Other than a bit of interest the only income is his PAYE income.

My head tells me that surely he can claim my fee as an expense in the same way that one would recover, say, a subscription to a professional body (that wasn't paid by the employer).  However the only place it would make sense to put this is in box 17 in the Other UK Income section of the self assessment.  The guidance would seem to suggest that this isn't an allowable expense though.  On that basis I was going to exclude it, but this seems a little unfair so wanted to check.

Can my fee be included as an expense or not?

Thanks in advance

Replies (5)

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Teignmouth
By Paul Scholes
17th Jul 2012 13:55

No

Hi Chris - as an expense it has to be related to income, ie his salary, and as your cost is not incurred "in the performance of his duties" it can't be allowed.  You could always become a charity and accept gift aided donations! ;-)

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By landscaper
17th Jul 2012 13:58

so why the tax return

Just wondering??

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By ChrisScullard
17th Jul 2012 14:12

@landscaper - he had a plethora of issues surrounding his tax code and underpaid tax from prior years as a result of his employer not filing a P46(car).  The majority of the work I did was unravelling and understanding that mess, and persuading his employer to foot the bill for the underpaid tax

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Teignmouth
By Paul Scholes
17th Jul 2012 14:16

Did you miss a trick?

Chris - perhaps his employer should also have been persuaded to cover some of your fees as a compensation payment?

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By ChrisScullard
17th Jul 2012 14:24

@Paul Scholes we did think about that but my client decided he had a good enough deal with them as it was.  Asking for my fees to be reimbursed on top might have pushed the boudaries of friendly co-operation!!!  In his words there is time to accept that you've got a good deal

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