Claiming employee expenses through Ltd company

[jubilee]

Hi there

I have an employee for my Ltd company who freelances. Note: This person is NOT a Director or Shareholder of the Company.

Can I still claim expenses (e.g. sustenance [travel/food]) given the work is not done from the usual place of work?

As a Director and Company owner, from my perspective I offer this as a perk (paid for expenses to Employee) to attract business and widen the work I can take on.

Company has:
x1 Director
x1 Employee

Thoughts?

[SueEllen]

Yep.

I would suggest you put a limit on how much your employee can claim for each item, the proof they need and how and when you will reimburse them. Then put all this in writing as part of the terms of their contract of employment, otherwise you will end up with an employee who takes the p*ss.

I use to work for consultancy's who had to do this. One got to the point that they were calculating people's mileage due to someone grossly over claiming.

There were HMRC booklets on this now some of the information is on direct.gov. So if you google you can find the specific tax information you need.

This is a link to booklet 480 - linky Expenses and Benefits guide

This is a link to booklet 490 - linky Employee travel a tax and NI guide.

Also be aware that if you don't offer to reimburse all the employee's mileage and working from home costs, they can claim tax relief on it through self assessment or a specific form.

The employee uses form P87 if they are a low tax rate earner or the claim is under £2,500 otherwise they have to do self-assessment.

[SueEllen]

BTW if you post serious questions in General you open yourself up to abuse. General is for fun not specific accounting/business/legal questions.

The best forum for this is accounting.

I would ask a moderator to move the question so you get a better reply from the accountants who frequent the board.

[Pondlife]

How many paid days of holiday are you giving your employee?

[TheCyclingProgrammer]

I'm confused. Is this person actually an employee (on the payroll) or are they a freelancer? It's not clear what exactly you are asking.

If they are an employee you can pay them whatever expenses you like and the same rules regarding whether they are exempt from tax, a BIK or something the employee can claim for on their tax return, apply to them as they apply to you. Chances are, you'll need to complete a P11D.

If they are a freelancer then they should invoice you for any agreed expenses just as you would one of your clients.

Regarding travel/subsistence claims specifically, where is your employees normal, permanent place of work and where are they travelling to?

[stek]

How does paying an employee expenses attract business?

[northernladuk]

What does your accountant say?

[SueEllen]

Pondlife and myself aren't crazy we were actually answering a post that was moved to accounting.

[SueEllen]

What does your accountant say?

He's asking us so he can ask his accountant something intelligent.

[TykeMerc]

Pondlife and myself aren't crazy we were actually answering a post that was moved to accounting.

I think he duplicated then later deleted the first post in this thread. It could do with a Mod merger really.