What Expenses Can A Contractor Claim?

As a contractor, it can be a minefield trying to figure out what you can and can’t legitimately claim as expenses. For instance, if you’re buying a new laptop, is it pushing the mark to claim for that?

Business mileage
(use of your personal car)
You can currently claim 45p per mile for the first 10,000 business miles you do in your car each year and then 25p per mile after that. This mileage includes travelling to and from temporary locations and between different sites. Of course, you need to get valid VAT receipts for fuel and these must be kept to support your claim.

Subsistence
You’ve got to eat! So, while working at a temporary location, you can claim reasonable meal and drink costs supported by valid receipts. So if you buy a sandwich and coffee for lunch, keep the receipts!

Accommodation
There are several categories for submitting accommodation costs and here’s how they all stack up:

All accommodation (hotels and B&B’s) must be accompanied by an original receipt

If you’re claiming accommodation rental costs, your rental agreement must be made under the name of your business and must be the original signed copy. It must also meet HMRC Dual Purpose rules, which means you’re already maintaining a property and are renting a second property for the purpose of your contract

You may be able to make a claim for staying with friends or family while at a temporary work place.

Travel
You can claim rail, bus, taxi and air travel as well as other travel-related costs such as tolls, tunnel fees and congestion charges, subject to the general travel rules explained at the bottom of this document.

Parking charges
Parking can be claimed as long as an original receipt detailing the date and cost is available for each amount.

Training and tuition
Any training or tuition to do with your current trade can
be
claimed. Training is treated like any other deductible
business expense; it must be ‘wholly, exclusively and
necessarily’ in the performance of duties. It must also be
directly linked to existing income, if not then it cannot be
treated as a deductible expense through your
limited company.
Manuals and text books
A reasonable amount may be claimed for the cost of
manuals and text books required for business purposes
where receipts are provided.
Eye sight tests
An eye test may be claimed for as long as a receipt is
provided. The cost of spectacles may be claimed if they are
prescribed for VDU use only. This will need to be confirmed
on the receipt from the optician.
Computers and other
office equipment
The cost of hardware, software and other office equipment
essential to your business can be claimed. There’s no limit to
the amount that can be claimed.
Postage
Office consumables
Any office consumables (printer ink, pens, etc) and stationery
you use for business may be claimed. This total cost must be
for a reasonable amount and you’ll need original receipts to
validate your claim.

Telephone
Itemised business calls from home or a personal mobile
phone are fully claimable, while unfortunately private calls
or line rental costs are not. To claim business calls a copy
of your itemised telephone bill must be kept. Internet
subscriptions cannot be claimed.
If the telephone/internet contract is taken in the company
name the full cost of the line rental/call charges can
be claimed.

Advertising/marketing
Costs of advertising your business is an allowable expense,
so for example online search engine listings, telephone
directories or even sponsorship of a local team.

Childcare
Up to £55 per week, per employee, paid to a registered
childcare provider can be claimed through your company.

Bicycle
You could claim for the cost of a bicycle through the Cycle to
Work scheme.
Charitable donations
Donations to a UK registered, HMRC approved, charity
are allowable.

Use of home as office
In 2012 a fixed rate of £4 a week was announced as an
acceptable flat rate claim for general costs associated with
the use of home as office, and it was confirmed that no
detailed expense claim needs to be prepared to justify such
an amount.

Staff entertaining

The cost of an annual staff function can be claimed through
your company. This should be supported by receipts and it’s
important that the receipts for this expense do not exceed
£150 per employee.

Pension contributions

Pension contributions made by an employer on behalf of its
employees are an allowable expense. I

Life insurance
You can save tax by paying for some life insurance policies
through your limited company.

NOTE INFORMATION HERE IS SUBJECT TO CHANGE DEPENDING ON ALLOWABLE EXPENSES, ALSO ADVICE SHOULD BE TAKEN FROM A PROFESSIONAL ACCOUNTANT- IF YOU NEED A REFEERAL TWEET ME @procuretweets and send me a direct message with your name and I will send you details of the company I use.