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Expenses when working away from home Mon-Fri staying overnight

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    Expenses when working away from home Mon-Fri staying overnight

    I've been reading this rather lengthy thread on subsistence allowance and, as it is now over three years old, I just want to bring the issue up again, but specifically for my situation where I'm working away from home on-site, only returning home at weekends. I was particularly interested in THEPUMA's post and also this post, and the conversation in between.

    Basically, I'm trying to work out what I can claim as an expense and what I can't, so, in addition to subsistence, I'm also looking at other things, too. The following are the general expenses I'm incurring as a result of working as a software contractor. Which ones would be considered reasonable tax-deductible expenses, and which would be considered by HMRC as taking the pee?
    • Morning snack/coffee purchased from "staff" canteen
    • Lunch purchased from "staff" canteen
    • Lunch/coffee at local cafe such as Costa or Starbucks
    • Pre-packed snack purchased from local supermarket such as Sainsbury's
    • Drycleaning of suits worn for work
    • Evening meal purchased on outing with "colleagues" (business clients)
    • Drinks purchased on outing with "colleagues" (business clients)
    • Short-term rented accommodation
    • Utilities bills such as electricity, water, Council Tax on said rented accommodation
    • Groceries from supermarket for use in said rented accommodation


    Also, I do not have the receipts for some of my lunch expenses (all less than £3) for the first few weeks of my contract - would it be reasonable to put these in anyway as a daily £3 expense and attach receipts for everything after?

    And there are some expenses (particularly the odd evening meal where I've shared a table bill with my colleagues) where I just have the credit card sales voucher rather than the VAT/till receipt - would this be sufficient for HMRC if it's just the occasional one?

    To give an idea of geography, my home is in Camberley, Surrey (west of London) and I am working on a contract near Cambridge (north of London). I am claiming mileage for travelling at the beginning and end of every work week. However, I occasionally have to travel to London mid-week by train (for interviews for potential future contracts or for social or domestic reasons). Obviously, I can claim for the interviews, but what about the other reasons? If I were not based near Cambridge, the trip to London would be a lot shorter and cheaper from my home, so can I claim the whole amount or just what the difference would be? Does it matter?

    Regarding mileage, I am on the VAT Flat Rate Scheme, so I don't need to keep my fuel receipts, do I, as I'm not claiming VAT back on them and mileage doesn't require receipts; so I can throw them away?

    I see from here (middle column, page 588) that keeping a digital scan of my receipts is fine for HMRC purposes. Can someone confirm this before I throw all my receipts in the bin?

    Thanks for any help you can give on this.

    #2
    Sigh...

    If you've read the other threads, then you will have noticed the phrase "wholly and exclusively". So getting to work qualifies as a business expense. Groceries and dry cleaning don't on the basis that you would be buying them anyway. Social travel certainly doesn't. (Also it's not about what YourCo pays for, it's about what taxes you pay on the money it gives you). And you need to keep company records for 6 years, including all proofs of purchases made on its behalf, either directly or expensed.

    So close but no banana. How about you hire a good accountant?
    Blog? What blog...?

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      #3
      Morning snack/coffee purchased from "staff" canteen - yes, but only if you're working unusually early
      Lunch purchased from "staff" canteen - yes, if you're on business and within the 24 month rule
      Lunch/coffee at local cafe such as Costa or Starbucks - as above
      Pre-packed snack purchased from local supermarket such as Sainsbury's - as above
      Drycleaning of suits worn for work - No
      Evening meal purchased on outing with "colleagues" (business clients) - yes, but it will be entertaining and therefore not tax deductible
      Drinks purchased on outing with "colleagues" (business clients) - as above
      Short-term rented accommodation - yes, if it's for business and isn't your only home
      Utilities bills such as electricity, water, Council Tax on said rented accommodation - as above

      Scans of receipts are fine, apart from dividend vouchers and any other certificates showing a deduction of tax, which must be originals.
      ContractorUK Best Forum Adviser 2013

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        #4
        As Mal and Clare have said the key with any expense is to question whether or not you have only incurred the cost because of your business activities and for no other reason and also whether your purchase could be used for anything other than for your business - otherwise known as 'duality of purpose'. The rules surrounding expenses are complex and the best thing you can do before you start claiming lots of them is to get yourself a really good accountant.
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          #5
          Thanks for the replies. Just to clarify, I am in the process of getting an accountant with DANBRO and have been in talks with them. However, they're turning out to be quite unresponsive to e-mails, so I am considering going with Nixon Williams or SJD now!

          Therefore, meanwhile, I thought I'd post the question on here seeing as DANBRO are dragging their heels a bit and I'm building up quite a large pile of receipts.

          Clare@InTouch, thanks for the quick breakdown, much appreciated. Regarding the evening meal out with colleagues, you wrote "yes, [it is tax-deductible] but it will be entertaining and therefore not tax deductible". Is it tax-deductible or not? Also, is this really entertaining, because my share of the bill is for my food and mine alone? In fact, the main reason we're out for dinner on the occasions we have been is because we're all staying overnight away from home, we need to eat, so it makes sense to go for dinner together.

          Also, with regards to the drinks purchased when out with them, if the drinks are only for me (we're all buying our own drinks), is this still entertaining, as they're getting no benefit from my purchase; or, is it the fact it's entertaining myself?

          You missed my last bullet point - 'Groceries from supermarket for use in said rented accommodation'. I take it this isn't tax-deductible?

          Also, I do not have the receipts for some of my lunch expenses (all less than £3) for the first few weeks of my contract - would it be reasonable to put these in anyway as a daily £3 expense and attach receipts for everything after?

          And there are some expenses (particularly the odd evening meal where I've shared a table bill with my colleagues) where I just have the credit card sales voucher rather than the VAT/till receipt - would this be sufficient for HMRC if it's just the occasional one?

          malvolio... Sigh... you obviously haven't read those posts I linked to yourself! But, regarding social travel, I understand this wouldn't be tax-deductible per se, but if I am returning home midweek for whatever reason (be it for social or domestic reasons), surely I can claim that travel expense, because I'm going home!?

          Comment


            #6
            Originally posted by Neo View Post

            malvolio... Sigh... you obviously haven't read those posts I linked to yourself! But, regarding social travel, I understand this wouldn't be tax-deductible per se, but if I am returning home midweek for whatever reason (be it for social or domestic reasons), surely I can claim that travel expense, because I'm going home!?
            Sigh yourself. I wrote some of them; perhaps you missed them? Do a little more research before you start criticising the people who have the answers.

            A social trip is not business related, even if you do start from a business location. Travel between your permanent place of work - for most of us that's home - and your temporary place of work is. Now you have all the clues, what is the answer?
            Blog? What blog...?

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              #7
              Mal's frustration comes due the fact you have obviously attempted to do some research and written two over complicated posts that take a lot of time to read and understand and then you ask if you can dry cleaning a suit is expensable?!??! That is kinda destroys your argument and people get frustrated because despite the lengthy threads you haven't put any thought or understanding in to it at all........

              Just my personal opinion regarding this though...

              Also, with regards to the drinks purchased when out with them, if the drinks are only for me (we're all buying our own drinks), is this still entertaining, as they're getting no benefit from my purchase; or, is it the fact it's entertaining myself?
              For the price of a few drinks just pay for it out of your own pocket. You are on a night out, not entertaining for business purposes. Is it really worth screwing your company for a couple of drinks? Personally I keep all alcohol that isn't with a meal off my expenses. It is my choice to drink it so I pay for it.

              A little knowledge appears to be a dangerous thing.
              Last edited by northernladuk; 3 April 2012, 09:24.
              'CUK forum personality of 2011 - Winner - Yes really!!!!

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                #8
                No you cannot claim for the cost of groceries - you have incurred no additional cost by doing so as you would have had to buy groceries regardless of whether or not you were on contract. Therefore it doesn't meet the wholly and exclusively rule.

                With regard to your evening meal out - as Clare has already said the cost can be put through the business but it is not tax deductible. And as you said yourself 'you have to eat' - you need to bear that in mind when trying to claim for the cost of every meal
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                  #9
                  Sailing close to the wind like this isn't worth it, why not just take the hit on the list of dubious items you presented? Remember you only save the tax on the expense, not the total, is it really worth the effort and the risk of close attention from the HMRC?

                  All I claim is my rail travel season ticket, mileage to railway station, mileage if I use the car, and parking. Quick, easy, no effort and little risk of an anal inspection from HMRC.

                  Comment


                    #10
                    Originally posted by Neo View Post

                    Drycleaning of suits worn for work
                    If I remember correctly you purchased a new suit only a few weeks ago? I’m surprised it needs a dry clean already?
                    one day at a time

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