EIM31935 - Travel expenses: general: directors' travelling expenses: Extra-Statutory Concession A4: directors who are acting on behalf of a professional practice

Extra-Statutory Concession A4(c)

Professional people, such as solicitors, sometimes become directors of companies on behalf of their professional practice and for no other reason. In these cases they will have no direct or indirect financial interest in the company.

Any expenses that are incurred in carrying out his or her duties by a director who is acting on behalf of a professional practice are treated for tax purposes as expenses incurred by that practice. The expenses are deducted in computing the practice profits for trading income purposes.

Extra-Statutory Concession A4(c) applies if the director is paid travelling expenses. If the travelling expenses are reasonable the director is not assessed on the payments as employment income, provided that the practice does not deduct the expenses in calculating its profits for trading income purposes.

The application of this part of the concession is illustrated by example EIM31940.

This part of Extra Statutory Concession A4 has effect in relation to expenses incurred before 6 April 2014. For expenditure incurred on or after 6 April 2014, section 241A ITEPA 2003 will apply.