January Questions and Answers

Newsletter issue – January 2023

Q. We hire casual labour to work alongside our permanent staff over busy periods such as Christmas. If an individual works only one shift and earns say £90, do we need to add that person to the payroll to process their pay?

A:As you run a PAYE scheme to pay your permanent staff, you do need to include any casual labour in that payroll, even if you only pay the person on one occasion.

Q. I let out a room in my home to a lodger, and I also run my self-employed business from another room in the same property. When I sell the property, will I be taxed on a portion of the gain that relates to the rooms that have been used for my business and by the lodger?

A:The gain you make from selling your own home is generally free of capital gains tax (CGT) if you have occupied the property for the entire period of ownership, with an exception for the last nine months of ownership. You are right to assume that where part of the property is used for business purposes, a proportional amount of the gain may be taxable.

However, this only applies if part of the property is used exclusively for business purposes. Where your workroom is sometimes used for another purpose, say as a space for your children to do their homework, the room will not be exclusively used for business, so the gain on that portion of the house is exempt from CGT.

Where the lodger shares some living space with you, such as the kitchen, the letting of the room to the lodger is fully covered by the exemption from CGT.

Q. While I was unemployed, I trained to be an HGV driver. I have now been employed as an HGV driver. Can I claim the cost of the training course and the HGV licence against my wages to reduce the tax due on that income?

A:The tax law specifically allows you to claim a deduction for the cost of the HGV license and any medical examination you may have had to undertake in order to be granted that licence. However, you can‘t claim a deduction for the cost of the training course.