pg.london wrote:Living allowance (A) is a part of my remuneration package. My company gives me option of declaring my actual expenses (B) (like Food, travel, council tax) out of living allowance (A). Hence the actual expenses (B) become non-taxable and tax is charged on undeclared living allowance (A-B). If I do not declare them (B), I would get them anyways as taxable living allowance. I hope this gives a clear picture on my case.
I'm not sure I've understood you right, but from your statements, it sounds like you can actually "declare" your food and travel expenses so they can come out of your "Living Allowances" as a "Non Taxable" Allowance. To me, this comes out as a reimbursement if you are having to declare them as such (which explains why they are then classified as non-taxable allowances).
May I now ask experts to comment whether the components (B like House, food expense, Travel Expense) would be considered as income by home office or not?
From what you said about "declaring" these expenses and they being paid out as "non taxable" items, I doubt they would qualify as income. You really come across as someone who is being reimbursed, but wait for other forum members to comment.