Very worrying - the expenses thing

[BoredBloke]

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!

That isn't always an option. I live in the North West. I'm currently on a commutable 5 month role. The one before that was 12 months in Edinburgh. Prior to that it was 6 months on a commutable role and 3 years at 2 different clients in London and 1 years in Geneva. I can't uproot my family that many times. When I look for work I obviously look and prefer work that is closer to home. I alter my rate to account for the higher expenses I incur - but to have to pay tax on the expenses I run up would mean that I'd have to price myself out of the market to make it more worthwhile.

So if I moved to London, where the majority of the work is, how would that effect the nations flexible workforce as all the flexible people migrate to one location?

This is also unfair simply because its a rule applied to the size of the company. A KPMG or Accenture consultant will have their expenses treated outside the tax system. Why should my companies be any different. I don't abuse the rules. The money I spend working away is money spent to earn do the work to put on the invoice.

[Bozwell]

The more specialist your skills the more likely you're going to have to travel away from your locality. On the plus side there are usually higher the daily rates to compensate.

Moving to where the work is is only practical if you are single. As soon as you have a family you can't really expect to be able to move them around every 6-12 months (or afford to for that matter). I do a commute of 76 miles a day to my current client, which I don't think is really that far, and that adds up to about £6500 a year in travel expenses. Of course, it doesn't actually cost that much to do the travel but at 45p a mile...

[TykeMerc]

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!

That's a ridiculous statement for the reasons stated by many, it just isn't practical. In the last 10 years I have worked in West Lancashire, Coastal Hampshire, Berkshire, North Yorkshire, Wiltshire, Northamptonshire, Somerset, West Yorkshire and South Wales, where do you suggest that I live or should I have faced the cost, hassle and grief of moving 9 times?

If I had refused to consider travelling and staying away then I would have worked less than 2 years from 10, I think that would have had a fairly drastic effect on my bottom line, don't you?

[Bozwell]

This is also unfair simply because its a rule applied to the size of the company. A KPMG or Accenture consultant will have their expenses treated outside the tax system. Why should my companies be any different. I don't abuse the rules. The money I spend working away is money spent to earn do the work to put on the invoice.

This.
I used to work for a Microsoft Partner that would sell my services to their clients in exactly the same way as my company does now. The only difference is they employ lots of consultants rather than just one. They however will never have to pay tax on expenses as well as cream off a healthy profit on their employee consultant's time (for which they charge their customers twice as much as I do).

If I compare the tax I payed as a permanent employee with the amount I pay as a contractor I pay a larger amount of tax (including Corp and dividend tax). The difference is that I have a higher take home now, but it's a take home I would never be close to achieving as a perm.

[d000hg]

Even someone like me who gets the train daily to current client, its £600 or so a month in expenses

Ouch. But then, lots of contractors must do a fairly normal permie-esque commute? Maybe a poll is in order to find out...

edit: http://forums.contractoruk.com/busin...r-commute.html

[LisaContractorUmbrella]

And if you fancy a quick survey with anonymous responses going to HMRC Budget 2015 : AUCAE launch survey urging contractors and recruiters to have their voice heard. - All Umbrella Companies Are Equal

[Unix]

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

[MicrosoftBob]

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

Looking at their interpretation of D&C for the proposed legislation it's a lot wider than IR35

Of course this could change over the next two budgets and look entirely different

[smalldog]

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.

[Unix]

Looking at their interpretation of D&C for the proposed legislation it's a lot wider than IR35

Of course this could change over the next two budgets and look entirely different

It will catch everyone in business who has customers then, i.e. plumbers, "Please come to MY house and put that PIPE along THAT wall TOMORROW"