Contractors' Questions: Can I claim interview expenses?

Contractor's Question: I've been asked to cover my own interview expenses for my first IT contract, which is based abroad. The total expense, which will cover a test and face-to-face interview, will be around £200. Should I foot the bill and, if so, what would be the most tax-efficient way to shoulder the costs myself?

Expert's Answer: If you are working through a umbrella company then the expense has to be incurred in the performance of the duties of the employment. Unfortunately, HMRC would argue that attending an interview will put the person in a position to possibly obtain the employment and not be incurred whilst performing the duties.

Moreover, expenses have to be paid out of income and if there is no income (as the job has not materialised) then there is nothing against which the expense can be set.

On the other hand, if you are working through your own limited company and the company foots the bill, then the test is less strict - namely it has to be 'for the
purposes of the trade.' In this instance, the £200 costs could very well qualify as an allowable expense in the accounts of the company.

The expert was Bob, the retired tax inspector. 

Further Reading: More information on contractor expenses here.