Whist contracting through your own limited company, all expenses incurred in the running of your business are tax deductible.
If you initially pay the expense yourself, for example car parking charges or travel cards, then our online system tracks these, and at the end of each month you can write yourself a cheque for total amount as a reimbursement from your company back to you.
When a client first joins us, we supply a detailed guide to valid claimable expenses, but as a introduction, we set out below some expenses which fall into the category as wholly allowable.
In all cases, it should be stressed that any claim you make should be backed up with valid receipts. We do not need to see these, but should a revenue inspection be called, they will be required.
Start-up costs
These include company start-up fees, travel to interviews and any stationery or postage involved.
Subsistence
You may claim any meal costs incurred whist performing your business. Examples of these are lunch or dinner bills.
Travel Expenses
Firstly, if you use your own car to perform business duties, for instance travelling to/from your place of work, then you may claim 45p per mile for the first 10,000 miles and 25p per mile thereafter. Motorcycle (24p per mile) and bicycle (20p per mile) can also be claimed. In addition, all receipted public transport is allowable such as train, taxis and flights.
Accomodation
Hotel costs and B&B expenses are fully deductible, as are associated meals. It should be stressed again that these must be reasonable costs as the single most reason for HMRC investigations are disproportionate bills being put through a company.
Equipment
Costs of equipment such as hardware and software etc, needed to run the business can be reclaimed.
Training
Provided the training you receive is exclusively required for you to perform your duties within the company, then these costs may be claimed.
Pensions
You can put some of your income into a company pension scheme. This is entirely tax deductible, so for a higher rate tax payer investing £100, £40 of it is effectively paid by the tax man. In addition there are reduced rate employers and employees NI rates for those paying into a company pension, thus making it one of the few tax breaks left.
There are also various proportions of household utility bills that can be justified in certain circumstances and as mentioned, these are explained in detail on our client expenses document.
