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  • Living allowances vs Salary

    Hello, I am an international consultant with the World Health Organization. For this reason, I registered as self employed this financial year, as I am expected to do other such consultancies, too. My pay has two components: a) the salary itself, paid monthly, b) the living allowances, from which I then have to pay for any accommodation, food, drinks, or travel in-country when deployed internationally. The living allowances are paid for the time that I am deployed only (e.g. I started this consultancy in late June 2021, but deployed overseas from 20 August - 31 October 2021 only, so living allowances are only paid only for the period 20/08-31/10, not for the whole duration of the contract). Unfortunately, payments come in a single transaction every month (e.g. for September I received a payment that had both the salary for the last 30 days, as well as the living allowance for the month). Obviously the contract says how much the salary component and how much the living allowance component is, and pay slips also show payments in two pieces. I know that all international consultants pay tax on the salary bit, but not the living allowance bit, as living allowances are only paid by definition in conjunction with international deployments and expenses incurred during these. This happens internationally, but obviously I do wonder how this is supported in HMRC guidance for when self assessment time comes. Thanks in advance.
  • Working from home part of rent as expense?

    Dear HMRC, I registered as a sole trader recently and have started trading. I see queries about rental costs, so I would like to ask a couple of questions, please. I am sharing accommodation with two other people in London, so I pay part of the overall rental costs. I work from home most of the time. Can I claim part of my share of the rent as a business expense? Do I need to do anything else for that? I do not have any other business premises. Thanks in advance.