Per Diem as an expense? Per Diem as an expense?
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  1. #1

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    Default Per Diem as an expense?

    My current client pays a per diem allowance (£40 / day)

    Can I claim this as an expense - ie. not included in company profits and therefore not subject to corporation tax?

  2. #2

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    Client gives you money and that's an expense?
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    It's income. You can only claim expenses you've actually incurred.

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    Quote Originally Posted by northernladuk View Post
    Client gives you money and that's an expense?
    It is to cover my food and beer expenses so I thought maybe.

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    Quote Originally Posted by genius View Post
    It is to cover my food and beer expenses so I thought maybe.
    Maybe income will turn in to a expense?
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    Quote Originally Posted by genius View Post
    It is to cover my food and beer expenses so I thought maybe.
    What your client contributes towards your daily costs has no bearing on what you can claim as expenses from YourCo. If you're claiming subsistence whilst at a temporary workplace or travelling for business then that's fine.

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    The Per Diem counts as income to your company, subject to Vat and Corporation Tax.

    You can deduct your own allowable expenses, subject to general principles including 24 month rule.

    There is in practical terms no link between the two.

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    Hmmm...if it wasn't taxable, we'd stop charging fees altogether. We'd instead get all clients to pay us the same amount as a per diem, no tax for us, hurrah!

    Sounds like they're giving you an allowance basically. No different to some employees get a salary of £X plus a car allowance of £Y. From a tax perspective it's all the same (well, yours is business income not a salary...but you get the gist).

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    Quote Originally Posted by genius View Post
    My current client pays a per diem allowance (£40 / day)

    Can I claim this as an expense - ie. not included in company profits and therefore not subject to corporation tax?
    is that £40 + VAT, or inc. VAT?
    If you're VAT registered you must charge VAT, and you must have some form of invoice record. Talk to your accountant about the most appropriate way to handle this money.

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    With any client expense of this nature, its always another line on the client invoice for me, with VAT on top.

    This has been the case for all expenses charged back to the client, flights, hotels, food etc.

    As others have stated, its purely company income.

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