Benefit to claiming expenses?

[northernladuk]

Got to be a sockie windup.

I thought this as well at first but it is conceivable someone could fail this badly but...

I started contracting and using a limited company 3 years ago. I didn't do enough research then and been naive since. Better late than never I guess lol

3 years and don't know about expenses.. Not a chance. He'd have picked this up talking to other contractors etc. I've spent hours and hours discussing expenses and contractor related stuff. To not pick this up is well... sockietastic.

[jmo21]

Appreciate the feedback even if some of it is patronising 😷

I started contracting and using a limited company 3 years ago. I didn't do enough research then and been naive since. Better late than never I guess lol

The whole point of contracting through a Ltd is to maximise take home via expenses and dividends.

I do question why your accountant did not point out to you in year 2 that you hadn't extracted the expense money your company owed you.

Yes, it may have accrued in your directors loan account, but I consider it incredibly lax of them to not have pointed that out.

[Sausage Surprise]

This whole thread is a wind up...right

[PerfectStorm]

You lot are sockie-paranoid. What is the obsession on this forum?

[pmasoft]

Company Expense vs Personal via SATR

You do not appear to be factoring in the VAT element in this comparison.

[ujjain]

I was said to be a sockie here once, quiet a few times when I had beginner questions.

But yes, make sure you get how expenses work. You can save a lot of money in tax by expensing stuff. I'm trying to expense everything I can, although it's hard to find proper expenses. But it's beautiful... you don't first pay 45% tax and then buy a £619 iPhone, which requires 619/0.55=1124 gross salary, you pay 0% tax and in certain situations with £2000+ invoices on the flat-rate vat scheme even get the VAT back, so you pay half compared to all other people.

A good one you can probably still use would be "use of home as office". You create the expense for £216 (maximum amount without proof) and you just pay yourself £216 from your corporate bank account.

It's really worth it to learn about this stuff as a contractor. After all, it's your money, your accountant won't really care that much if you don't expense things that you could have expensed.

[malvolio]

The whole point of contracting through a Ltd is to maximise take home via expenses and dividends.

But yes, make sure you get how expenses work. You can save a lot of money in tax by expensing stuff. I'm trying to expense everything I can, although it's hard to find proper expenses.

And people wonder why HHMRC take a dim view of why we have our Limited Companies and why we will never be rid of IR35 and its bastard siblings. After 20 years in this game I remain appalled at just how ignorant some people are - or pretend to be...

[jmo21]

And people wonder why HHMRC take a dim view of why we have our Limited Companies and why we will never be rid of IR35 and its bastard siblings. After 20 years in this game I remain appalled at just how ignorant some people are - or pretend to be...

So you're through a brolly then?

[malvolio]

So you're through a brolly then?

No, I've been using a Limited Co for the last 20 years.