Can I claim these as expenses?

[doa]

I am a contractor with my own Ltd Company. I have had my company for 2.5 years. I changed accountants recently and my new accountants are advising me that I can pay for things like travel to and from my place of work, OU courses related to what I do (computing), entry into conferences etc from the business bank account as long as I keep receipts. I have never done this before as my old accountants didn't mention anything about being able to claim expenses etc. I am also on the flat rate scheme and I was under the impression that as such one of the disadvantages of the flat rate scheme is that I cannot claim expenses.

So, who is right? I obviously want to start paying for things related to the company such as stationary, books and the above mentioned through the company bank account but I don't want a situation where next year I am told that these things cannot be claimed and having to put the money back into the bank account from my own pocket.

Also, are there time limits for expenses, for example my accountant mentioned that I can only claim up to 18 months of travel costs during a contract, after that I put myself into IR35 territory. I don't really understand the rules for all these things so if anyone can explain, please do.

If anyone can advise I would be grateful.

[Tax Lord]

doa,

1. Being on the flat rate scheme of vat means you cannot claim back (with some exceptions) any vat on expenses. It does not mean you cannot claim expenses through the accounts to reduce the profits.

2. You can only claim expenses that are wholly and exclusively for business use. Therefore I cannot say who is wrong or who is right without knowing the full history of each expense.

3. There is a '24month rule' set by HMRC. This rule states that if you are AWARE that you will be travelling to the same principal place of work for more than 24 months you should stop claiming travel from the date you became aware. Eg. You have been contracting at the same office for 18 months and you have just renewed your contract for a further 12 months, you should stop claiming travel from the date you sign the new contract.

HTH

[TroubleAtMill]

doa,

I'm in a similar situation to you, i.e. 2.5 years of Ltd but been contracting for 7 years. Also in FRS as well.

Under the Ltd, I've claimed for travel, [programming] books, computer hardware and software, accountant services, web hosting and some stationary. I've never claimed for food - my accountants have advised I could have - but that's more through laziness than anything else.

Usual disclaimer: IANAA.

Hope that helps.

[malvolio]

After two years I would rather hope you'd spent a bit of time finding out how your business works; your level of ignorance of the basics is frightening. I suggest you go away and read the first timer guides we keep mentioning then come back wth some more focussed questions.

Meanwhile, among other things, OU courses are not allowable business expenses and travel expenses are based on the 24-month rule (explained here, for example - <snip>) Are you sure you've got the right accountant?

[doa]

After two years I would rather hope you'd spent a bit of time finding out how your business works; your level of ignorance of the basics is frightening. I suggest you go away and read the first timer guides we keep mentioning then come back wth some more focussed questions.

Meanwhile, among other things, OU courses are not allowable business expenses and travel expenses are based on the 24-month rule (explained here, for example - <snip>) Are you sure you've got the right accountant?

Yes, I know I am far too ignorant on how my company works. I have just bought some books on Ltd company rules/tax etc.

My accountant has said I can claim OU courses as long as they are relating to the company and the work I do (I am planning on doing computing and business). Could he be wrong?

[pmeswani]

Yes, I know I am far too ignorant on how my company works. I have just bought some books on Ltd company rules/tax etc.

My accountant has said I can claim OU courses as long as they are relating to the company and the work I do (I am planning on doing computing and business). Could he be wrong?

I don't think he is wrong.. But I think you may have misunderstood what he said. Doing a Computing and business degree is not related to your job. If your client, for example, requires you to write an Information Security Policy that complies with ISO27001, then doing an ISO27001 related course would apply.

HTH

[malvolio]

Precisely.

[ratewhore]

You can expense what you want. The question you need to ask yourself is whether the expense is a BIK or not.

After 2.5 years you should really know this stuff...

[BoredBloke]

Eg. You have been contracting at the same office for 18 months and you have just renewed your contract for a further 12 months, you should stop claiming travel from the date you sign the new contract.

HTH

That rule really is tulip isn't it. What's to stop you claiming and serving notice at the 24month point. Also with it being geographic is a stupid idea. I spent 18 months working in Leeds. That meant I couldn't claim expenses for another role if it happened to be in Leeds. That effectively made one city closer to home more expensive than the others. I'd be fine with 24 months at the same company but it isn't!

[weemster]

I keep a list of everything I spend - at the end of the year I have a chat with my accountant and we decide what things are financially viable to claim for. This approach requires an accountant you have known and trust for many years, Luckily I have that.