i Believe tax is deducted , but want to double check this is correct-
Assuming that HMRC have verified the subcontractor as a '20%' subcontractor then tax should indeed be deducted at 20% from the travel element of the payment. The list of items (materials etc) to be excluded when calculating the tax deduction is specific and does not include travel costs.
Thanks for clarification
Wilson thank you for your valuable contribution yet again. I understood perhaps wrongly that round sum allowances were taxable as possibly disguised remuneration and that specific payments were ok. I apologise if I am wrong. Where the subcontractor is a limited company do the same rules apply?
It doesn’t matter if the subcontractor is an individual or a limited company - the rules for calculating the tax deduction are the same.
Not that it should make any difference, the questioner did not mention round sum allowances - I read it as reimbursement of actual travel costs.
Take away the amount the subcontractor has paid for . . . fuel used EXCEPT for travelling.
Thanks Andy delphic to the end :-)
and if there is no contractual obligation to pay the travel?
The Scheme operates on a payment basis - if the subcontractor is paid then the tax deduction is based on that payment, subject to exclusion of specified items. I don’t see that contractual obligation is at all relevant.
what HMRC state is the law is sometimes questionable. i was quoting the FA, any thanks again enough for the night my brain hurts
I vote yes.
"fuel except for travelling" means for example gas for fag lighters for those think of the environment and re-fill