Expenses via PSC Expenses via PSC
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  1. #1

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    Default Expenses via PSC

    Hi,

    Not sure if this is the correct forum to ask, I hope it is.

    I have just recently taken a contract inside IR35 via an umbrella company. I am now not bringing in any money to my limited company, but there are still some funds in there that I would like to use to claim a few expenses. I have asked my accountant and I was told

    "For a new phone and laptop at this stage, HMRC would argue that they are in fact personal purchases as you would not need these for your company at the moment. You should never claim a mobile phone through the company but for the laptop you could either buy it personally now and if you go back to working through your company in a couple of months claim it as a cash expense then or wait to purchase this until you are working through your company again."

    I have put through mobile phones previously, so am a little confused what to do. It is Black Friday and I really wanted to get a new laptop but my contract inside IR35 is going to be until May next year, so I am not likely to be contracting outside IR35 for a while, if ever.

    Sorry for the long post, I really just wanted to know if my accountant's advice is correct? Normally their advice is spot on but these are new circumstances and I really was looking forward to the upgrade

    Thanks

  2. #2

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    Quote Originally Posted by shailesh1 View Post
    Hi,

    Not sure if this is the correct forum to ask, I hope it is.
    Well you are a contractor asking an accounting question in the Accounting section of a contractor website... so erm.. well.....
    I have just recently taken a contract inside IR35 via an umbrella company. I am now not bringing in any money to my limited company, but there are still some funds in there that I would like to use to claim a few expenses. I have asked my accountant and I was told
    "For a new phone and laptop at this stage, HMRC would argue that they are in fact personal purchases as you would not need these for your company at the moment. You should never claim a mobile phone through the company but for the laptop you could either buy it personally now and if you go back to working through your company in a couple of months claim it as a cash expense then or wait to purchase this until you are working through your company again."
    I personally think he's being a bit safe here. Technically the company is still running. Although you are working on an inside gig it doesn't mean the company isn't still working in the background. No sales but still has to work. You could easily argue that it still needs laptops and phones to operate. How can you prepare sales materials and call people without the proper hardware. The inside gig is, after all, only temporary.

    He is wholly wrong about the phone. It's standard stuff to provide a business phone to the directors as long as it's on a business plan. Did you intend to buy a phone through the company outright and put a sim in it thats on a private plan? That's not a good idea as it should be a business plan for a business phone. So yes you can claim a phone through the business but do it properly. No idea what his thinking could be here.

    Are you really sure his advice has always been spot on in the past?

    Disclaimer. I know sweet fanny adams about accounting.
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  3. #3

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    Thank you kindly sir :-)

    That is a good point about the mobile phone. The bill is on the company name but it is on a personal tariff, so the accountant lets me put the monthly bill through the company and I normally buy a phone outright once every two years, in between the contract renewal, so I end up with a new phone every year.

    Yes, my initial thoughts were the same as yours, that the accountant was being on the safe side but I didn't want to do anything that might alert HMRC.

    I might just get a laptop if there is a good deal with the Black Friday sales

  4. #4

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    Well if your current laptop fails how you gonna email the accountant to ask him without a new laptop.

    I think he’s wrong. But then again there still needs to be some business consideration. If the current laptop is old and needs replacing then the lack of revenue into your business is immaterial.

    If you have plenty of working computers and buy a brand new gaming laptop a few months before closing your business then that’s different. But even in that case you’d have to dispose of the laptop correctly.

    In short. Your accountant is wrong IMO
    See You Next Tuesday

  5. #5

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    Quote Originally Posted by shailesh1 View Post
    Thank you kindly sir :-)

    That is a good point about the mobile phone. The bill is on the company name but it is on a personal tariff, so the accountant lets me put the monthly bill through the company and I normally buy a phone outright once every two years, in between the contract renewal, so I end up with a new phone every year.
    Well he shouldn't really let you put it through. The company name means nothing as it's a personal tarif. I also think a new phone every year is taking the piss.

    So I think he's wrong doing what he's doing and he's wrong advising this.. I'd be looking out for a new accountant if I were you.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

  6. #6

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    Thank you both, my mind is at ease now. All I need to see is some good deal on a laptop in the next 24 hours

  7. #7

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    Quote Originally Posted by shailesh1 View Post
    Thank you both, my mind is at ease now. All I need to see is some good deal on a laptop in the next 24 hours
    Plus your PS5


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  8. #8

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    I think your accountant is wrong. You could very easily also claim for mobile phone purchases if you are a software developer. Just means that you develop & test for the latest devices

  9. #9

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    Quote Originally Posted by cannon999 View Post
    I think your accountant is wrong. You could very easily also claim for mobile phone purchases if you are a software developer. Just means that you develop & test for the latest devices
    Be careful with this though.
    If you only develop for clients and they provide the test environment you’ve lost your justification.
    It’s one reason I always use my business devices for proof of concept testing.

    Note: a PS5 could be considered taking the PS unless you’re actually developing for one.
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  10. #10

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    Quote Originally Posted by Lance View Post
    Be careful with this though.
    If you only develop for clients and they provide the test environment you’ve lost your justification.
    It’s one reason I always use my business devices for proof of concept testing.

    Note: a PS5 could be considered taking the PS unless you’re actually developing for one.
    A PS5 or an xbox would actually be useless for development - there are explicit (and rather expensive) development kits for consoles. The only reason for a console itself would be research and that would be hard to argue due to dual purpose if you purchased it and didn't have a separate office.
    merely at clientco for the entertainment

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