New Contract - Charging travel & hotels back to agency\client

[philo]

Hi all

I am starting a new contract in a few weeks. Its going to be based up north but will require 1 or 2 nights stay in London each week.

The agency said that travel expenses will be chargeable back to the client and I will do this when I submit timesheets and invoices to them on their web portal

Is this standard practice?

I won't be using the end clients expense system just the agency and from what I can see its better for than having to pay out for train travel and London hotels.

Also - and i know I will probably have to work out this when I start - but do you search for best fares or hotel deals or literally just pick the ones that suit location\times you want to travel? Also factor in first class travel on Virgin or would it be standard. Obviously without taking the michael too much and booking really top end hotels but dont want to stay in a travel lodge either.

[SueEllen]

Talk to the agency about what hotels they will allow and definitely find out if they will allow you to charge them for first class travel.

Most will not allow first class travel unless it's cheaper than standard.

[WTFH]

You'd be best to check your contract, and if that doesn't stipulate it, then ask your agent. Some clients will say they will pay "up to a limit of £x", or if they are a smart client they may have a preferred hotel chain that they get a discount at, and they'll give you the discount code.

[philo]

Thanks - not sure why I didnt think to ask the agency about it. Cheers

[Patrick@Intouch]

Hello,

It certainly is not uncommon to recharge expenses for travel to a client.

There are several steps to this though.

If you are paying for this personally you should claim the expense in the first instance from your company. This then shifts the cost incurred to your company and creates a cost entry on the profit and loss account.

Your company will then invoice your client recharging these expenses. If you are registered under the flat rate scheme for VAT then you will also want to charge VAT on the gross amount. This is because, as you will be unable to claim the VAT on your purchases paying VAT on the gross turnover would see your company keeping hold of less than it had incurred.

This would then create an income neutral position for the company, neither with a profit or a loss to speak of with regards to those transactions.

If the company is meeting these costs directly then simply ignore the part about you claiming expenses from your company as these will already have been recorded via the company bank account.

As for the costs incurred, it would really be a consensus between you and your client as to the expected level of these costs which will determine the type of hotel that you book.

[philo]

Thanks for the reply

Asked the Agency which reminded me of why I didnt ask in first place - they had no idea just said ask when I start.

One question though - as a contactor is my travel time chargeable/part of contracted hour? say 5 hours each week train travel to London.

I know all companies are different - just as a contractor are you expected to do that in own time.

[SueEllen]

Thanks for the reply

Asked the Agency which reminded me of why I didnt ask in first place - they had no idea just said ask when I start.

One question though - as a contactor is my travel time chargeable/part of contracted hour? say 5 hours each week train travel to London.

I know all companies are different - just as a contractor are you expected to do that in own time.

Unfortunately there is no consensus on this.

I've had some travel included as my standard hours for one client but others excluded for the same client. It all depended on where the site I travelled to was from my home address.

[Lance]

Also - and i know I will probably have to work out this when I start - but do you search for best fares or hotel deals or literally just pick the ones that suit location\times you want to travel? Also factor in first class travel on Virgin or would it be standard. Obviously without taking the michael too much and booking really top end hotels but dont want to stay in a travel lodge either.

I suggest that you charge them mileage at 45p per mile. No matter how you travel. They won't balk at that as it's a standard rate. And you can make money on it as well.
The only caveat on that is you won't be able to charge for parking without a receipt so be prepared in case they ask. "I lost the receipt so you can have it for free." is a pretty good answer.

[Lance]

Far be it for me to question the word of a professional... but here goes.

Your company will then invoice your client recharging these expenses.

you mean agency

If you are registered under the flat rate scheme for VAT then you will also want to charge VAT on the gross amount. This is because, as you will be unable to claim the VAT on your purchases paying VAT on the gross turnover would see your company keeping hold of less than it had incurred.

You might want to but the client and/or agency, is likely to tell you to foxtrot oscar. More usual is you'll have to simply add VAT to the net amount and lose a small amount. But of course the OP is no longer on FRS anyway so this advice is neither good nor current.

[philo]

Far be it for me to question the word of a professional... but here goes.


you mean agency


You might want to but the client and/or agency, is likely to tell you to foxtrot oscar. More usual is you'll have to simply add VAT to the net amount and lose a small amount. But of course the OP is no longer on FRS anyway so this advice is neither good nor current.

Thanks for answers - i had read you are meant to add VAT on top of the net price of hotel rather than on top of with vat. I'll check that out with my accountant