Very worrying - the expenses thing

[PerfectStorm]

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!

[Goatfell]

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

If I was a permie that might be feasible, but this has it's been done to death over the last week, it's boring.

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

It all depends what your bottom line is, racking up £500 a week in expenses on a £200 day rate is unsustainable - on a £1000 a day it's cheap.

[northernladuk]

It all depends what your bottom line is, racking up £500 a week in expenses on a £200 day rate is unsustainable - on a £1000 a day it's cheap.

Absolutely this. I guess it's 2k for when you are in London but I don't know that area. I'm close to 1k a month but the rate I'm on is 1k a month more than the last one I had locally. No brainer. To be fair I'd have done it for the same rate and been 1k down beacuase I'd have lost more turning it down and spending another few weeks on the bench.

[expat]

I've been very lucky. Never had to travel with contracting in 7 years.

I appreciate plenty of people do it (and for good reasons), and I wouldn't be totally against it for a 6 month contract for example, but SURELY it shouldn't be anyone's long term working situation.

It probably isn't anyone's wish for a long term situation. But what do you do if you have a spouse or partner who won't move to where your work is? It may not be easy to just decide he or she is not the right partner, and if you have a young family too then you wouldn't be leaving it just to live close to work.

And if your work is by nature short-term project work, there will likely be no single place that you could move to even if it were feasible. That's contracting, you are part of a flexible workforce, and that's why expenses are part of it.

[vwdan]

It probably isn't anyone's wish for a long term situation. But what do you do if you have a spouse or partner who won't move to where your work is? It may not be easy to just decide he or she is not the right partner, and if you have a young family too then you wouldn't be leaving it just to live close to work.

And if your work is by nature short-term project work, there will likely be no single place that you could move to even if it were feasible. That's contracting, you are part of a flexible workforce, and that's why expenses are part of it.

Exactly - I travel for my projects and will always have to. I did when I was permie and I do now - it's the very nature of short-medium term projects in a reasonably niche field. At best, going forwards up the ladder I'll simply get to WFH a little more but my projects will always be widely dispersed and demand an element of travel.

I spend a lot on expenses - I have a monthly profit after tax value that I try to maintain and I work my rates and expenses to match that. However, I refuse to live away in poverty - I know some people just want to exist as cheaply as possible when away, but that's not for me. I've just spent 6 months in a very pleasant Village Hotel, with a gym, restaurant and bar - I almost miss whiling away the evenings in the beer garden with a pint and a book. I've managed to keep my takehome reasonably consistent and I treat commutable and low expense projects as nice little bonuses.

I've got to say - one thing that really irritates me about this forum is the presumption that we all work in the same way. If all your work is local or you can do it all remotely, then good for you - I'm glad it's worked out. But that's not the reality for most contractors - in fact, it's not even the reality for most permie consultants.

If the outcome of this thing is that my expenses would no longer be deductible then it'd certainly make things a lot more difficult. I wonder if they'd stop me claiming VAT on them, too?

[jmo21]

And if your work is by nature short-term project work, there will likely be no single place that you could move to even if it were feasible. That's contracting, you are part of a flexible workforce, and that's why expenses are part of it.

This bit is fine, and I understand it, but when people say stuff like this.....

But what do you do if you have a spouse or partner who won't move to where your work is? It may not be easy to just decide he or she is not the right partner, and if you have a young family too then you wouldn't be leaving it just to live close to work.

Normal people move where the work is. Choosing to work full time away from home all the time is crazy.

If people want to do that, that's fine, it's just not for me, and if there was not work where I live, and I had to do a Mon-Fri stay over all the time, then I'd move.

[WordIsBond]

And if your work is by nature short-term project work, there will likely be no single place that you could move to even if it were feasible. That's contracting, you are part of a flexible workforce, and that's why expenses are part of it.

And that's why the 24 month rule (maybe it needs tweaked) makes a lot more sense for the expenses question than supervision/direction/control. If you are in the same place a long time, why should other taxpayers have to subsidise your expenses by giving you a huge tax break? Permies have to either pay their own expenses or move, and arguably contractors should, too. Maybe it makes sense to tweak the 24 month rule, but at least there is some logic to it.

But when the very nature of your work requires you to go different places, and you aren't in any of them long enough for it to make sense to move house, then that's part of the cost of doing business. Even if the client is exercising a measure of control.

This is another poorly thought out initiative. Suppose a printer travels to a client and sits down with them and works up some advertising leaflets with them looking over his shoulder. They say, "I like that part. No, change that part. Move the logo. Change that wording." Etc. And then he goes back to his shop and prints 500,000 copies for distribution. Should his expenses to go see his client be invalidated because they were exercising control? Obviously not. But he was providing personal service at their location and they were directing his work.

But he is filling my letterbox with rubbish. So tax the guy, I guess. Because the overriding principle that decides whether someone should pay more tax or not seems to come down to whether the BBC has decided they are good guys or bad guys.

[psychocandy]

No the fact you pay tax on £24k more bit. I haven't looked in to this to be honest so maybe I'd be better not saying anything until I've understood it. Ignore me.

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.

[psychocandy]

This bit is fine, and I understand it, but when people say stuff like this.....



Normal people move where the work is. Choosing to work full time away from home all the time is crazy.

If people want to do that, that's fine, it's just not for me, and if there was not work where I live, and I had to do a Mon-Fri stay over all the time, then I'd move.

I feel ill if I spend too long in that dark place called England....

[PerfectStorm]

Absolutely this. I guess it's 2k for when you are in London but I don't know that area. I'm close to 1k a month but the rate I'm on is 1k a month more than the last one I had locally. No brainer. To be fair I'd have done it for the same rate and been 1k down beacuase I'd have lost more turning it down and spending another few weeks on the bench.

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

Pass the cream!