is my accountant correct about sub contracting work not being claimable? is my accountant correct about sub contracting work not being claimable? - Page 2
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  1. #11

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    Quote Originally Posted by NotAllThere View Post
    If, as a permie employee, I pay someone to write a small program which I'll use at work, that wouldn't be deductable - it's be paying someone out of your wages. I assume that's the approach the OP's accountant has taken - and it could be right, without knowing the details of the situation.
    If you did that as a permie you would probably get into trouble with your employer unless you had permission. If you had permission then your employer would pay the cost and it wouldn't come out of your wages. Basically what I am saying is that permanent employees are not allowed to get someone else to do their work for them.

  2. #12

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    Quote Originally Posted by NotAllThere View Post
    If, as a permie employee, I pay someone to write a small program which I'll use at work, that wouldn't be deductable - it's be paying someone out of your wages. I assume that's the approach the OP's accountant has taken - and it could be right, without knowing the details of the situation.
    Interesting counterpoint to the "it's obvious" argument above. Strikes me as a bit tenuous but who knows?

    To the OP... does the client know/accept you're doing this or have you done so secretly and claimed the work as your own?
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  3. #13

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    Quote Originally Posted by NotAllThere View Post
    If, as a permie employee, I pay someone to write a small program which I'll use at work, that wouldn't be deductable - it's be paying someone out of your wages. I assume that's the approach the OP's accountant has taken - and it could be right, without knowing the details of the situation.
    The difference here is that the OP is assumed to be a contractor and the case would be trying to prove they were deemed an employee. Placing a subbie would mean their status was NOT of an employee and hence outside of IR35. Therefore, being outside of IR35 means the cost of the subbie is an allowable business expense through their PSC. The contract they had with their client would be a contract for services.

    If a permie employee was to pay for third party costs, and it was agreed with the employer that it would be reimbursable, then the cost would also be allowable in a simple case. It would be claimed via an expenses process and ultimately end up as the employer's cost in their company. Whichever way you look at this scenario though, the permie is still a permie because the employment contract is a contract of services.

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