Expense Guide for Limited Company Contractors

If you run a Contractor Limited Company you will be able to deduct certain ‘tax deductable’ business expenses from company billings. Contractors working at remote work sites normally incur a good few expenses however care should be taken to comply with HMRC expense claim rules (including Site Based Rules).

Are you a highly skilled IT Consultant? Would you like to open your own Contractor Limited Company in the UK? If so Commonwealth Contractors may be able to help!

At Commonwealth Contractors we work with Chartered Accountant Partners who can help you to go into business with your own Contractor Limited Company and maximise contract earnings.

To discuss your situation with an experienced advisor call Commonwealth Contractors now on 0330 390 9021 or Submit your Details and we will get right back to you!

Claimable Expenses

As a professional contractor you may claim all sorts of expenses including;

  • Accommodation – If you have a permanent base in (for example) London and you are engaged to deliver a 3 month IT project in Edinburgh you may be able to claim accommodation expenses associate with the temporary site (i.e. Hotel / B&B expenses)
  • Site Based Subsistence – reasonable subsistence costs may be claimed so long as the workplace is considered to be ‘temporary’
  • Site Based Travel – travel expenses (including public transport, mileage and even cycling) to and from the temporary workplace may be claimed. Make sure you retain detailed records and fuel bills for mileage claims
  • Business Telecoms – you cannot claim line rental however you can claim the value of business calls further to an itemised receipt
  • Computer Costs – it is always advisable to use during the course of the project a company laptop to help to validate that you are outside IR35. Computer costs can be claimed however you must account for depreciation 
  • Professional Training
  • Professional Manuals & Textbooks
  • Postage & Stationary
  • Accountancy Costs

Expense Claim Requirements

When claiming business expenses you need to ensure that;

  • All expenses claimed are wholly, exclusively and necessarily incurred in the performance of your duties, AND
  • You have retained original receipts and have completed expense claim records to validate the claim, AND
  • The expense is allowable by the HM Revenue and Customs (HMRC), AND
  • If the expense’s validity is contingent on your work being at a temporary workplace, you have complied with Site Based Rules (i.e. the 24 month rule for site based expenses)

If at an HMRC audit you are unable to produce suitable documentation to validate the claim you could find that you have to pay backdated income tax and national insurance on the value of the expense.

Find out More

To find out more about Commonwealth Contractors call now on 0330 390 9021 or Submit your Details and we will get right back to you!