contracting newbie...expenses

**cojak** · 28 May 2014, 08:52

Welcome!

You'll find a lot of answers to your questions within the CUK website.

On the right you'll find CUK Navigation. >>>>>>>>>

Look down and you'll come to the First Timers section. Have a read through there.

Basic expenses questions answered here: Contractor Expenses - How to claim Travel and other expenses via Limited Company or Umbrella

Then pay particular attention to IR35.

If you go into the Accounting/Legal forum you'll discover the thread Basic advice when running your own contractor business.

Guide to Contracts also has some good articles.

Happy reading!

**malvolio** · 28 May 2014, 09:00

Originally posted by madge2014 View Post

Hi guys,

Been reading around the HMRC site and various threads on here and still a tad confused...

Just landed my first contract after working permie for 8 years.

Due to start next month..

I will be travelling 50 miles each way a day from my home to the place of work - 5 days a week (no overnight stays)...

With regards to my expenses, am I correct in thinking that I should keep my receipts and can claim for the following in my circumstances...

Some of the petrol costs (whatever it works out at)
Breakfast / Lunch each day ? (it is the food part which is the grey area for me at the moment)

Thanks in advance

So you don't eat if you're not working then?

Breakfast and dinner are claimable if your working day is "excessive" - not defined by HMRC (gosh!) but essentially 12 hours or more, or if you are away overnight. I've never understood the passion for claiming lunch, given 95% of us have a £5 sarnie we're saving a whole £1 a day, for which you need receipts and book-keeping for the P11D at year end. Why bother...

Mileage is 45p a mile for the first 12k miles, 25p a mile thereafter, resetting at tax year end. For routine commuting that's all you are really entitled to claim. And it's not petrol costs (or even diesel), it's to cover the total cost of the car. OK, the actual cost of the average car these days is around 60ppm, but HMRC haven't caught up yet.

**Martin at NixonWilliams** · 28 May 2014, 09:03

Originally posted by madge2014 View Post

Hi guys,

Been reading around the HMRC site and various threads on here and still a tad confused...

Just landed my first contract after working permie for 8 years.

Due to start next month..

I will be travelling 50 miles each way a day from my home to the place of work - 5 days a week (no overnight stays)...

With regards to my expenses, am I correct in thinking that I should keep my receipts and can claim for the following in my circumstances...

Some of the petrol costs (whatever it works out at)
Breakfast / Lunch each day ? (it is the food part which is the grey area for me at the moment)

Thanks in advance

You need to read up on the 24 month rule before deciding whether you can claim for travel and related costs. The rule can be quite complicated however, broadly speaking, if there is an expectation to be at the one site for more than 24 months travel costs cannot be claimed as the location would not be classed as temporary.

If it is a temporary workplace and you are driving your personally owned vehicle to and from work, you can claim mileage at a rate of 45ppm for the first 10,000 miles and 25ppm thereafter each tax year.

If you are staying away from home you can claim for the costs of breakfast and an evening meal as well as a few other things but I assume this will not apply here.

Lunch claims should be ok to claim providing the location you are working at is classed as temporary however many people don't bother because the savings are often quite small. The lunch should be in the form of a prepacked sandwich or meal from a cafe etc, i.e. you cannot simply claim for bread and ham etc. purchased from the supermarket.

I hope this helps.

Martin

**TheFaQQer** · 28 May 2014, 09:22

Originally posted by malvolio View Post

I've never understood the passion for claiming lunch, given 95% of us have a £5 sarnie we're saving a whole £1 a day, for which you need receipts and book-keeping for the P11D at year end. Why bother...

Get a dispensation and that removes the P11D requirement. Work 200 days a year and that's £200 you've saved, which I'd rather have in my pocket than in someone else's.

**TheFaQQer** · 28 May 2014, 09:23

Originally posted by martin at nixonwilliams View Post

you need to read up on the 24 month rule before deciding whether you can claim for travel and related costs. The rule can be quite complicated however, broadly speaking, if there is an expectation to be at the one site for more than 24 months travel costs cannot be claimed as the location would not be classed as temporary.

In one GEOGRAPHICAL LOCATION!!!!!

**CloudWalker** · 28 May 2014, 09:40

Originally posted by TheFaQQer View Post

Get a dispensation and that removes the P11D requirement. Work 200 days a year and that's £200 you've saved, which I'd rather have in my pocket than in someone else's.

I hear its not easy to get dispensation unless your an uber corporation

**TheCyclingProgrammer** · 28 May 2014, 09:55

Originally posted by CloudWalker View Post

I hear its not easy to get dispensation unless your an uber corporation

Not sure where this often repeated idea comes from.

I applied for a dispensation a few months ago and got it through in a couple of weeks.

I can imagine HMRC might be reluctant to hand out dispensations for a newbie but if you've been doing this for a few years and have consistently been filing P11Ds with nothing but genuine business expenses (which you subsequently claim for on your SA, resulting in no extra tax) then I imagine you stand a good chance of having a dispensation approved.

You have nothing to lose by applying; it takes 5 minutes to fill out the online form.

**LisaContractorUmbrella** · 28 May 2014, 09:56

Are you working through your own Ltd or an umbrella?

**TheFaQQer** · 28 May 2014, 09:56

Originally posted by CloudWalker View Post

I hear its not easy to get dispensation unless your an uber corporation

I got one with no problem. When I changed accountants, the new one didn't realise I had one, so applied and got another one.

contracting newbie...expenses