Contractor Expenses

Guide to Expenses and Travel

24 Month Rule

Bob Jones explains how the time is calculated with regards to contractor expenses.

What expenses can I put through my Limited Company company?

Checklist of allowable IT contractor expenses.

Expenses without the scandal: tax deductible expenses for IT contractors

For IT contractors operating their own limited company, understanding the intricacies of tax-deductible expenses can mean the difference between just getting by and real profitability.

Charging expenses back to your client

Charging expenses back to the client is common, but there are important ground rules that have to be followed if you wish to avoid falling foul of VAT regulations.

IT contractor guide to training expenses

The who, what and when of claiming expenses for training, by tax expert Bob Jones.

Expenses guide to umbrella contracting from home

Ex-taxman Bob Jones on the allowable expenses when working at home part-time.

Umbrella contractor mileage allowances - an overview

Former taxman Bob Jones on how to make the most of relief on the road.

Travel expenses checklist for freelance contractors

What you can claim and how – an overview for on-the-road contractors working for themselves.

Contractor mileage log - free template

Downloadable chart to keep track of your contractor business when it’s on the road.

Contractor travel expenses guide

Fifth in a CUK download series of 2-minute guides, by experts for IT contractors.

Travel Expenses: Travel to temporary workplace rules for IT contractors

Ex-tax inspector, Bob Jones, explains in detail how Sections 338 and 339 Income Tax and Pensions Act 2003 affect IT contractors.

1 - An overview of the legislation

The “new” legislation aims to grant relief to a person who, with one employment, works at temporary locations within that employment provided no more than 24 months is spent at the one location.

2 - Workers who move from employer to employer – one site per employment

In order to qualify the workplace has to change and in this case the workplace doesn’t change – it is the employment that changes – it is the employment that is temporary and not the workplace.

3 - Fixed term appointments

If you are engaged for a specific period of time, or you are taken on to work on a specific project without specific time limit, the contract is “Fixed Term”.

4 - Workers who work for one employer and are moved from site to site within that employment

Following on from the general principles it is likely that under these circumstances a claim will be valid provided the 24 month rule is not broken.

5 - Expectation / likely to move / likely to remain

If you have worked for an employer for some time and you have moved from site to site during that period then it is reasonable to assume that you will continue to move from site to site in the future.

6 - Agency workers

The general view of HMRC is that working for an agency does not qualify for travel expenses.

7 - Umbrella Companies and travel expenses

An Umbrella company, by using an overarching contract of employment, does offer a worker continuity of employment and provided the Umbrella is set up correctly this is perfectly legal.

8 - Running your own Limited Company: Travel Expenses

As long as the 24 month rule is not broken and the new work is at a location which involves a significantly different journey it is unlikely there will be a problem.

9 - Composite Companies / Managed Service Companies

Legislation has been introduced which has put an end to the above – any companies that still operate on this basis do so outside the law.

10 - Travelling time payments

These are taxable and should be taxed under PAYE by the employer when paid.

11 - Reimbursements based on mileage

Any contributions from your employer are generally paid free of tax and must be deducted from any claim to HMRC.

12 - What if I could have claimed reimbursement but didn't – can I claim from HMRC?

In the case of travel expenses - yes you can…... in the case of other expenses probably not …

13 - Transport provided but used own vehicle

HMRC sometimes argue personal choice but there is a limit to how far even they can go with personal choice.

14 - Record keeping

The law requires that records shall be kept…there is the onus of proof on you, the claimant, to prove the claim.

15 - The 24 month rule

If you know that you are going to be at a location for 24months then you cannot claim from the date that you know that the 24 months will be exceeded.

16 - The 40% rule

First of all this is linked to the 24 months rule – you need to have a 24 month period before the 40% rule comes in …

17 - Contentious Tax Tribunal Hearings

If you have a dispute with HMRC that cannot be resolved then the resultant appeal can be taken before the Tax Tribunal.

18 - Travelling abroad

The travel rules that I have been describing apply equally for travel abroad.

19 - Depots

Where a person has to report to a depot every day to receive instructions and then travel on to the workplace HMRC will most likely argue that travel to the depot is ordinarily commuting.

20 - Based at a location

If you are based at a location travel to and from that location is ordinarily commuting and not allowable. However, if you travel to other locations then that travel is most likely to be allowable.

21 - Areas

If a person's job is defined by a particular area, for example, the “Cheshire representative”, then travel to the area is not allowable but travel within the area is allowable.

22 - Moving to a site a short distance away

The general principle is that where there is a change of workplace and the journeys are substantially the same the change of workplace will be ignored.

23 - Meal Allowances

To be allowable, a meal allowance has to be an expense of travel.

24 - Dispensations

Employers often make an issue of the fact they have a dispensation. This does not mean that the employer has received some form of HMRC approval.

Contractors' Questions

Contractors' Questions: Can my 'Ltd' submit expenses I claimed as an employee?

Expert aid on the 24-month rule for an IT contractor going 'Ltd' to supply a previous employer.

Contractors' Questions: Can I bill my client for overseas weekends?

Tips for IT freelancers on overseas contracts facing costs on non-business days.

Contractors' Questions: Can I use my credit card to buy company kit?

Tax guidance for putting company purchases on your personal credit card.

Contractors' Questions: How to claim for kit bought before my 'Ltd' began?

Expert tax advice for IT contractors who buy equipment prior to incorporating.

Contractors' Questions: Can I claim travel expenses from home in France to the UK?

Advice on expenses for an IT contractor in France travelling back to the UK each week.

Contractors' Questions: Can I claim interview expenses?

Expenses aid for IT contractors asked to fork out for their own interview.

Contractors' Questions: How to claim old expenses?

Accounting aid for a contractor with client receipts dating back to 2007.

Contractors’ Questions: Can I claim travel expenses?

Tax aid for a self-employed techie sitting on four years of allowable receipts.

Contractors' Questions: Can I claim expenses for networking?

Why an 'inspirational' trip for your freelance business won’t wash with the taxman.

Contractors’ Questions: Least taxing way to buy a computer?

Tax aid for when sole traders or limited company owners buy kit for their business.

Contractors’ Questions: When can I expense private, business and capital spending?

Understanding the main types of costs you’ll incur is key to knowing what’s recoverable.

Contractors’ Questions: Can I claim use of home as an expense?

‘At-home’ consultants could shave 25% off their house’s running costs.’

Contractors’ Questions: Can I claim expenses for a credit card purchase?

‘On your credit card, out your pocket or from petty cash? It’s all the same to HMRC.’

Contractors' Questions: How to cut tax and other costs when setting up?

Ex-taxman on what’s best for a cost-conscious contractor looking at Plan B.

Contractors’ Questions: How to keep a hassle-free mileage log?

Daily updating isn’t necessary if it’s the same road and role every day.

Contractors’ Questions: What are scale rates & benchmark scale rates?

How contractors can still claim expenses when they don’t have receipts.

Contractors’ Questions: Can I avoid the taxman at my Christmas party?

Timely advice for when ‘one for the road’ pushes you over the limit.

Latest Expenses News

New Year, new rules - same taxman

Fresh attacks on contracting appear high on HMRC's resolutions list, writes former taxman Ray McMahon.

Taxman to get tough on umbrella companies

Revenue vows action against umbrellas and agencies bending wage or tax rules.

Tough times compel more to fiddle expenses

Quarter of the workforce on the make with meals, mileage and entertainment.

Government warned over IT contractor expenses

The state's heavy-hand could make umbrella companies 'unviable'.

Where the taxman catches the self-employed

Tax expert reminds how the self-employed unknowingly pop up on the Revenue's radar.

Government 'consults' on IT contractor expenses

New laws may stop agencies and umbrellas fiddling temps' tax.

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