COMMUTING AND TAX

In the U.K. you do not get a tax credit for the cost of commuting. Schedule E taxes income from employment; and because of a court case a long time ago, that income is not reduced for tax purposes because you have to pay to take the train or drive a car before you can start that work.

In Denmark, the rules are different. Anybody travelling more than 24km a day (i.e. 12km each way) gets a tax deduction. This year, it is kr.2.10 for every daily km between 25 and 120, then it falls to kr.1.05 per km.

All this adds up. Even though I don't work full-time, I will still get a tax deduction this year for commuting of around kr.26.000, which (in high-tax Denmark) is quite a lot when compared with the basic personal allowance of kr.42.800.

In addition to the above, there are also rules about using your car while at work. If, for instance, my employer sent me to Copenhagen to visit a trade fair (as he did a month or two back), then he pays me kr.3.73/km for me to use my own car, the rate falling to kr.2.10/km if I do more than 20,000 km a year. Furthermore, this rate is tax-free.

If all this seems complicated, the answer is that it is. I have just adjusted my tax projection for 2014, including up to date commuting costs and various other deductions (including some for the kitchen project). The happy outcome is that December's paycheck is likely to be tax-free, which should make Christmas more enjoyable.

Walter Blotscher