Very worrying - the expenses thing

[stek]

My understanding was the way it works is that you would no longer be able to claim this as a tax-deductible expense as you can now.

OK so before, maybe you pay for this £2000 on your own credit card. Then once a month the company pays you £2000 directly on receipt of expense form.

Going forward, you'll still have these costs but now no monthly £2000 from company. Of course, the company will be £24000 richer and more profitable (in my example).

So now what. Extra dividend. Stupid% of tax whereas before personally you paid zero on this because it was an expense payment.

You're missing the BIK aspect which is the real killer.

[psychocandy]

Wow, and here's me on 150 a month expenses.

Pass the cream!

Not a big commute then. 45p a mile 16 miles a day?

[psychocandy]

This is only for those under IR35, I am outside so not effected.

Nope you will find its slightly more than that. My understanding was you can still be outside IR35 but caught by this. In fact, they've made it very difficult at the moment not to be caught.

[psychocandy]

hmmm, Im not sure I understand this new rule. If Im working on behalf of my company I charge my travel (train tickets etc) plus things like hotels directly to my business current account already. I dont fanny around paying personally and claiming back, there is zero point doing that. So how would costs directly associated with trading and paid directly from my company bank account be impacted if at all? Its a business overhead not a personal expense. Are HMRC saying they would essentially audit everyones business costs to ascertain if they are a personal expense that doesnt incur CT relief? cant believe that for a minute but as has been said further up only really for IR35 so the govt. dont consider you in business at all so null and void.

The only thing I claim personally is mileage but thats minimal.

YES exactly it

[Bluenose]

What do you eat?

I don't tend to eat hotel breakfast unless I am really hungry but in a solid 4 star business hotel (Crowne Plaza, Hyatt, Hilton Double-tree, Melia, Marriott), the going rate is £16 on-the-spot charge or £10 if pre-booked.

Even the sub-4 star hotels (Premier, Holiday Inn Express) seem to charge that also however, I don't have enough experience in those places to say. Usually the cost difference between those 3 and the 4 star business hotels is about £20 per night and so I don't tend to bother with them.

For lunch, unless you eat at Boots everyday and get a meal-deal, its going to run you around £8.

The general policy for dinner expenses at a Tier 1 IT consultancy is around £30.

I have only tended to do a maximum of 1 month in a hotel before I get an apartment but that is on a case-by-case basis. On current gig I am getting a 6 month lease on an apartment.

From what I have seen expenses can eat about 20% of your day rate so I would imagine that if this UK law change does come to pass then all that would happen is that the UK based clients end up footing the bill for all my expenses instead of my limited - as I certainly won't be.

I currently charge £100pd extra for engagements outside of central London.

I am a specialist consultant and only do short business change engagements on projects (usually max 9 months) so I am currently way out of the current IR35 legislation.

[BolshieBastard]

Easy way to make it feasible - move where the work is

If you're regularly having to account for £2k of expenses a month you clearly don't care that much about your bottom line!

Do you practice talking tulip or does it just come quite naturally to you? Like every contract that matches your rate expectations, skillset and interest is always on your doorstep?

[BolshieBastard]

This is only for those under IR35, I am outside so not effected.

Im presuming you said that tongue in cheek!

[TheFaQQer]

I am a specialist consultant and only do short business change engagements on projects (usually max 9 months) so I am currently way out of the current IR35 legislation.

How does that all work then?

[TykeMerc]

How does that all work then?

I was wondering that myself, I work in a similar way, but I pay a close eye to IR35, I'd love to think I was out of scope of the IR35 legislation, I doubt I am.

[Bluenose]

How does that all work then?

In a nutshell, I am generally treated as an external consultant from PWC/E&Y/KPMG would be, just cheaper. Direction and control is tenuous for consultants like myself as I generally tell the client what they need to do, not the other way around.

Due to the short engagements and high entry cost, I carry alot of financial risk in what I do.

I work on one specific change programme, per client at a time. I don't request time off, I tell them when I am not available. I work for more than one client at a time etc.

For IR35 in its current incarnation, I am not caught within. For IR35 v2 however, the examples given seem to indicate even the Prime Minister would be caught under the new direction and control definition.