Posted by
cd
18 yrs ago
My husband pays tax on his housing allowance, even though we never actually get it, it goes direct to landlord.
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TC
18 yrs ago
cd: And so he should! He has received a benefit (the value of the rent) regardless of to who it was paid by the company.
Christian: I understand that company tax is based on profits - and certain deductions are allowed for expenses incurred in the generation of that profit. However, housing allowances are specifically denied as allowable deductions. So by default tax is paid on them. But best to get advice from a tax professional.
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cd
18 yrs ago
To TC, I just meant it shouldn't cost the company any more money as its the employee who has to pay the tax.
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dasia
18 yrs ago
Christian, no the company does not pay tax on this benefit it goes into their books as an expense to the company.
When the company submits the information to the Tax Dept they disclose your salary and then the benifits on separate lines, e.g.
salary xxxx
Housing allowance yyyy
Utilities allowance zzzz
travel allowance 0000
total xyz0
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Totty
18 yrs ago
Correct me i'm wrong but got this form the website:
If it written as housing allowance you get taxed on it
If it written as rental reimbursement and you and your company have alll receipts and have a system in place (simple files will suffice) to record this then it's tax deductable.
It's all in the wording, don't want to pay tax write RENTAL REIMBURSEMENT.
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