Subsistence - Exactly what can be claimed? Subsistence - Exactly what can be claimed?
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  1. #1

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    Default Subsistence - Exactly what can be claimed?

    Hi all,

    Apologies for asking this, I imagine it's not the first time. I have done a search and had a look through the results, but I'm after definitive answers.

    I'm new to contracting and am currently applying for my first contract role. I've set up my limited company and have spoken to an accountant who I will use once I am earning. I don't want to bombard him with questions before I become a paying customer, but he has been very helpful up to this point.

    Basically, I've just stumbled upon this word "subsistence" today. What exactly can you claim? Is it claimed directly from HMRC or the employer?

    If, for instance, I took a contract in Leicester and I live in Leeds, would I be able to claim commuting mileage as subsistence? Could I rent a flat or pay a hotel to live near a contract and claim anything for that? How about lunches and so on?

    Many thanks in advance for any help. Finding this whole world a bit daunting but already feeling very positive about taking these initial steps....

  2. #2

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    Quote Originally Posted by Jay Cartay View Post
    Hi all,

    Apologies for asking this, I imagine it's not the first time. I have done a search and had a look through the results, but I'm after definitive answers.

    I'm new to contracting and am currently applying for my first contract role. I've set up my limited company and have spoken to an accountant who I will use once I am earning. I don't want to bombard him with questions before I become a paying customer, but he has been very helpful up to this point.

    Basically, I've just stumbled upon this word "subsistence" today. What exactly can you claim? Is it claimed directly from HMRC or the employer?

    If, for instance, I took a contract in Leicester and I live in Leeds, would I be able to claim commuting mileage as subsistence? Could I rent a flat or pay a hotel to live near a contract and claim anything for that? How about lunches and so on?

    Many thanks in advance for any help. Finding this whole world a bit daunting but already feeling very positive about taking these initial steps....
    There is not a definitive list of what can be claimed, but there is guidelines. When considering whether i can claim something as a subsistence expense, i ask myself whether something is a cost i would have incurred if i had not been staying away. For example you would have to eat breakfast lunch and dinner everyday regardless of where you are staying.

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    Your journey has to be to a temporary location (check HMR&C website for official definition) in order for you to be able to claim travel and subsistence and the journey has to be wholly and exclusively for business purposes
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    Get a guide from your accountant. Most of the contractor accountants will give you as part of the welcome pack.

    Or look at the SJD and Nixon Williams websites. They have good guides.

    You have an accountant don't you???

    Have you had a look at this link?

    http://forums.contractoruk.com/accou...-business.html

    Also familiarise yourself with the search method in the Welcome/FAQ's area. Anything you can think of at this point will have been done to death.
    Last edited by northernladuk; 18th March 2013 at 15:55.
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    Cheers for that guys, much appreciated.

    It's a minefield when starting out!

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    Quote Originally Posted by Jay Cartay View Post
    Cheers for that guys, much appreciated.

    It's a minefield when starting out!
    This is the easy bit... Wait for IR35, Opting in and out and the day to day dealings of agents and clients...

    And the surprise you will have when you find you can be walked there and then and not get a penny from your notice period. Always gets 'em wailing that one.
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    Quote Originally Posted by Jay Cartay View Post
    Cheers for that guys, much appreciated.

    It's a minefield when starting out!
    <cough>LisaContractorUmbrella<cough>
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    Quote Originally Posted by northernladuk View Post
    <cough>LisaContractorUmbrella<cough>
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    Quote Originally Posted by Jay Cartay View Post
    Is it claimed directly from HMRC or the employer?
    Don't go misunderstanding how expenses work and thinking everything you put through the company/umbrella on expenses is "free" because it's not.

    If you are an employee on a permie job then it's true that business expenses that your employer reimburses cost you nothing. However, self employed and running your own business is different so don't go booking first class travel thinking "my company is paying, it doesn't cost me anything". Ultimately, you are the company owner so your expenses come out of your company profit and ultimately out of your pocket. The only advantage with claiming things as business expenses is that you avoid paying tax on that part of your income.

    Hope that makes sense....

    Lots of contractor accountants have expenses guides you can get from their websites. There is also one right here on this forum if you look at the links on the right side of the page.

    Quote Originally Posted by Jay Cartay View Post
    If, for instance, I took a contract in Leicester and I live in Leeds, would I be able to claim commuting mileage as subsistence? Could I rent a flat or pay a hotel to live near a contract and claim anything for that? How about lunches and so on?
    First understand the 24 month rule.

    You can probably claim accommodation, mileage (45p/mile), lunch and other stuff. But remember my comment above - 80% of these expenses are coming out of your pocket.
    Free advice and opinions - refunds are available if you are not 100% satisfied.

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    Quote Originally Posted by Jay Cartay View Post
    Hi all,

    Apologies for asking this, I imagine it's not the first time. I have done a search and had a look through the results, but I'm after definitive answers.

    I'm new to contracting and am currently applying for my first contract role. I've set up my limited company and have spoken to an accountant who I will use once I am earning. I don't want to bombard him with questions before I become a paying customer, but he has been very helpful up to this point.

    Basically, I've just stumbled upon this word "subsistence" today. What exactly can you claim? Is it claimed directly from HMRC or the employer?

    If, for instance, I took a contract in Leicester and I live in Leeds, would I be able to claim commuting mileage as subsistence? Could I rent a flat or pay a hotel to live near a contract and claim anything for that? How about lunches and so on?

    Many thanks in advance for any help. Finding this whole world a bit daunting but already feeling very positive about taking these initial steps....
    As far as I am aware, you can claim for accommodation if you already own a property, or rent one. Failing this, I don't think you can claim. This also means that you can instead claim for your travel expenses to and from the place of business. If I am wrong, someone else will be along shortly to kick my ar$e.
    I am Brad. I do more than the needful and drive the market rates up by not bobbing my head.

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