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Contractor Expenses
If you intend to make a business expense claim you must ensure that the expense was incurred wholly, exclusively and necessarily in the performance of your duties. Where you’re claiming an expense linked to work undertaken at a temporary client site you must also ensure you comply with site based rules.Store all receipts in a safe place and tabulate them so they can be found easily. The HMRC may wish to go back 6 years if inspecting an expense payment.
Claimable Business Expenses:
Travel ExpensesClaimable contractor expenses include the cost of Public Transport and Business Mileage. Parking and Congestion charges may also be allowed where a suitable business reason can be shown.
Public Transport
Includes Trains, Tubes, Buses, Planes, Trams etc. A VAT receipt and ticket should be requested ideally showing the start and end locations, date, time and full price. Public Transport claims should be made against a valid receipt.
Business Mileage
Business Mileage includes transport by car, motorcycle and bicycle. You should create a mileage log to record journeys. The HM Revenue and Customs allows an allowance per mile. The allowance includes the cost of fuel and running costs of the vehicle.
- Car Allowance: 40 pence per mile for the first 10,000 miles, 25 pence per mile thereafter
- Motorcycle Allowance: 24 pence per mile
- Bicycle Allowance: 20 pence per mile
Subsistence Expenses
Meal costs can be claimed where you work on a temporary and remote site away from your normal place of work. Receipts should be provided to prove a claim. There are no subsistence claim rates but you must ensure that the claim is for reasonable meal costs. If you pay for a meal for three only claim your portion.
Accommodation Expenses
The cost of Hotel and Bed and Breakfast accommodation may be claimed where you are required to stay overnight near to a temporary client site. Subsistence linked to the accommodation may also be clamed where reasonable. It is important to make reasonable claims, staying in a 5 star hotel may seem excessive to the HMRC (and thus be treated as, and taxed as, a benefit in kind to the individual).
Business Telecoms
If claiming a home business telecoms line the account should be in the name of the company. An itemised bill should be requested. Any personal calls should be removed from the bill. Mobile phone line rental is not claimable unless the phone is in the name of the limited company, an itemised bill should be requested
Trade Journal Subscriptions (books, magazines and publications)
Trade Journal subscriptions are claimable further to a valid receipt. The book, magazine or publication should be linked to your career.
Business Courses
Courses undertaken to further your career may be claimable. I.e. training in cutting edge technology skills for high level IT Consultants
Business Bank Account Charges
Bank Account charges applied to the business bank account may be claimed.
Business Insurances
Business Insurance expenses may include Professional Indemnity, Employers Liability and Public Liability Insurance.
Computer Costs
Computers should be purchased using the limited company bank account and registered in the name of the business. A suitable business reason for the purchase should be provided for each item. The computer must be for business purposes.
Accountancy Fees
Accountancy fees and payments to other professional service providers may be claimed. VAT invoices should be filed to prove payments
Home Based Office Expenses
See
Contract finding Costs
It may be possible to expense contract finding costs e.g. you are required to travel on the train from London to Manchester to discuss a possible project with a potential client. Full receipts should be provided.
Postage, Stationary and Printing
The cost of postage stationary and printing costs may be claimed only where full receipts are provided
Pre Trading Start up Expenses
Pre Trading Start up Expenses can be claimed. Start up expenses may include travel, advertising, web site production and hosting, legal fees, business insurance, office costs etc. Full receipts should be provided.
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