Travel expenses - accountant seems useless Travel expenses - accountant seems useless
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  1. #1

    Nervous Newbie


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    Default Travel expenses - accountant seems useless

    Hi

    Although my limited company is in the UK, I have long term contracts in France and Belgium. I travel back to the UK to be with my wife and kids every weekend.

    My accountant says that the total travelling expenses we accumulate cannot be deducted but for every 1000 pounds maybe 19% can be taken off corporation revenu.

    Is he right? Is this normal??? I get the impression that my accountant is working for HMRC.

    I don't want to swindle HMRC, but I feel that the way the taxes are being done is totally unfair. My Corp Tax now is so high, I'm having trouble paying it.

    Thanks,
    CP

  2. #2

    More time posting than coding


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    Quote Originally Posted by Certifiedpro View Post
    My accountant says that the total travelling expenses we accumulate cannot be deducted but for every 1000 pounds maybe 19% can be taken off corporation revenu.
    What did you accountant actually say?

    Since 19% is the corporation tax level, I wonder if there's simply some confusion over words going on here?

    And, do you realise that saying "for every £1000, 19% can be taken off as CT" is the same as saying "for every £1, 19% can be taken off as CT"

    Can you post the actual wording?

    Quote Originally Posted by Certifiedpro View Post
    I don't want to swindle HMRC, but I feel that the way the taxes are being done is totally unfair. My Corp Tax now is so high, I'm having trouble paying it.
    This us more worrying - Business 101 is to have money in your bank account (or easily accessible) that covers government taxes.

  3. #3

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    Quote Originally Posted by Paralytic View Post

    This us more worrying - Business 101 is to have money in your bank account (or easily accessible) that covers government taxes.
    Hello

    Well, the travel expenses were so high that it has reduced any profits. For some reason , my accountant said that these cannot be taken into account. For the actual wording, I cannot remember exactly, it was over the phone.

    They're not very good at explaining.

    But the point is this:

    Are my travel expenses to mainland Europe deductible? 100% or only partially?

    Thanks

  4. #4

    TPAFKAk2p2

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    Yes, subject to the 24 month rule (i.e. you're not expecting to work in the same location for 24 months)

    I think it is just a confusion on wording - the 19% is the corp tax you won't have to pay.

    So if yourCo earns £1000 profit, the CT would normally by £190 - leaving £810 to be distributed as dividends

    If your expenses from that are £200, the profit is £800 and your CT would be £152 - leaving £648 to be distributed as dividends.


    If you were thinking that the whole expense was paid by HMRC, then you are mistaken.

  5. #5

    Contractor Among Contractors


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    Quote Originally Posted by Certifiedpro View Post
    Are my travel expenses to mainland Europe deductible? 100% or only partially?
    Assuming these are valid business expenses, then they are fully deductible. I think the 19% has confused you. I highly doubt the accountant was saying you can only claim 19% of your travel costs. I imagine what they meant was you can claim all the travel costs, all of which will get corporation tax relief, and as the corporation tax rate is currently 19%, that means 19% of what your company spends on travel will come off your corporation tax bill.

    Same way all of your income is taxable. This doesn't mean if you get an extra £1,000 in income you pay an extra £1,000 in corporation tax. CT rate is currently 19% so an extra £1,000 in income will (all else being equal) lead to an extra £190 corporation tax liability.

  6. #6

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    Quote Originally Posted by Maslins View Post
    then they are fully deductible.
    I suspect the OP is really saying "Are these paid without attracting benefit-in-kind income tax?". UK travel is not deductible nowadays. Are you saying overseas travel is different?
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  7. #7

    Prof Cunning @ Oxford Uni

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    Quote Originally Posted by Certifiedpro View Post
    Well, the travel expenses were so high that it has reduced any profits. For some reason , my accountant said that these cannot be taken into account.
    Can I just check: you say your travel expenses are very high and have reduced any profits. Are your travel expenses more than the money left in your company, after allowing for NIC, etc?
    e.g. Your company invoices £6k per month, you take £3.5k as div, £700 as salary, pay £100 NIC and then you try to claim £1.8k in expenses. That means your company is losing money.

    If Money out > money in, then your accountant is advising that you need to take less money out, or increase the amount of money coming in.

    Or have I read it wrong? Perhaps if you gave figures (even made up ones) that might help.
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  8. #8

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    Quote Originally Posted by Cirrus View Post
    I suspect the OP is really saying "Are these paid without attracting benefit-in-kind income tax?". UK travel is not deductible nowadays. Are you saying overseas travel is different?
    UK travel is not deductible? Why not (assuming OP is outside IR35)?

  9. #9

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    Surly OP should be paying his tax in France or Belgium if he works there during the week ?


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  10. #10

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    Quote Originally Posted by Cirrus View Post
    UK travel is not deductible nowadays. Are you saying overseas travel is different?
    Back in the mid 90s, it was. Happy days.
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