Question about expenses

[Jackthedog]

Hi,

Need some help, sorry this question may have been posed many times before but I am not clear.

I’m new to contracting and have just set up a limited company (am director and am employee) and started as a worker providing IT Consultancy Services.

I have a client for 6 months, and I will be working with them 100 miles away from home. On a 5 day week basis. I’m outside of IR35, this has been checked.

My accountant is saying I can’t offset my travel expenses against my revenue so I would reduce my corporation tax bill. Is this really right? She is not a contractor specialist accountant.

They are saying I either get a P11d value and tax implication or I have to pay my expenses personally and claim back through dividend (so would have already paid corporation tax).

I always thought justifiable and appropriate travel expenses to a temporary work location were possible to offset against profit, have I been wrong?

[fatJock]

Your accountant is wrong - you can claim these expenses from your company. You’d be impacted by the 24 month rule however if t came to that given you’re there five days a week.

[northernladuk]

Firstly I'd point your accountant at threads such as these and ask her to explain herself in detail why she thinks you can't.

Contractor Expenses: Meal Allowances

or tell her to google it and see what she comes up with.

Secondly...

She is not a contractor specialist accountant.

Based on the quote and this thread I'd go get a contractor specialist pronto...

[malvolio]

And you're not an employee, you're a salaried officer of the company. Keep that distinction clear.

[jmo21]

Fire them.

[TheCyclingProgrammer]

Get a better accountant.

[simes]

I concur with the above. The accountant is wrong.

[Jackthedog]

Thank you...further question

Hi all, thank for your help. Much appreciated.

I challenged the accountant and she has come back with the following say I still don’t get relief. Does this sound right?

The 24 month rule relates to temporary workplaces (EIM32075 & EIM32080). Although, I appreciate, it may seem that London can be treated as a temporary workplace, however, as Jack The Dogs Consultancy Services Limited is a Personal Service Company (PSC), one also needs to consider the “Employment Intermediaries” guidance (EIM32135), Section 339A ITEPA 2003, that was introduced on 6 April 2016, where it confirms, “…that each engagement undertaken by a worker who personally provides their services through an employment intermediary will be considered a separate employment for the purposes of travel and subsistence. This will mean that generally no relief will be given for home-to-work travel costs and associated subsistence…” for the employee.

On this basis I will get no relief and I don’t agree. Other workers as contractors in my current contract (all through agencies on a similar basis) are able to offset, but I am not. Has she set me up incorrectly as a personal service organisation perhaps?

I need a new accountant who specialises in contractors, can anyone reccomend please?

[Jackthedog]

Thank you...can you recommend at all?

Get a better accountant.

Can you recommend any? Ta

[Jackthedog]

Help

I concur with the above. The accountant is wrong.

Any recommendations?