Searching for relief

It is a truth universally acknowledged that self employed people find it easier to get tax relief on their business expenses. For example, let's assume you go on a course to update your skills or knowledge. Those who are self employed can claim tax relief on 100 per cent, for the employed it is a bit more tricky.

You can only have tax relief if that course was necessary, for the rules state that if you are self employed you can have tax relief if the expenditure is wholly and exclusively for business purposes, but if you are employed, it must be necessary as well as wholly and exclusively for business purposes. Arguing that something is necessary is always tricky. It is quite clearly going to apply for things like professional indemnity or a professional subscription – but anything else and you start getting into murky water.

Does it make any difference to the person or entity employing your services, perhaps a practice? Yes. If you are employed, they must deduct tax and employees national insurance from your pay which means that they must operate a PAYE system. They also have to pay employers national insurance, which, at 13.8 per cent isn't exactly cheap.