Expenses Expenses

[sumez]

Hi guys, I'm new to contracting and will be taking a role this week. The role is 82 miles away. I know that I can claim back the mileage at 40 pence a mile, but how does accomodation expenses work? I will be staying in either a hotel or renting out a place during the week. If I was to claim back my business expenses, how do I get paid for them?

Are they taken out of the corporation tax that I will have to pay?

[Nixon Williams]

The guidance given below is based on the assumption that the site you are based at is a temporary workplace and you have not nor expect to be based there for more than 24 months.

Hotels & Guesthouses
Where an employee stays in a hotel or guesthouse relief is permitted in full for the costs actually incurred. As always the invoice should be in the company name and supplied with the expense claim form.

Rented Flats
In many cases furnished accommodation (e.g. flats) can be obtained as a cheaper and more convenient alternative to hotel accommodation. Provided that the total cost of the accommodation is appropriate to the business need and is reasonable and not excessive tax relief should be allowed.
The cost will be accepted as reasonable where the total cost pf providing the accommodation does not exceed the cost of hotel accommodation of an appropriate standard.
The cost of the rent and council tax will be allowable. Payment of heating and lighting are generally not claimable although water charges are.

Reasons why tax relief may be disallowed or restricted

If the employee is accompanied by his or her family;

Location is determined by a non-business reason;

Standard of the accommodation is at the same or higher standard than the employees own home (if your own home is of a very high standard, you may not get relief if the rented accommodation is to the same standard);

Significant non-business use for the location or use of the accommodation.
In all cases (hotels/guesthouses/flats) you may also claim for the provision of breakfast and an evening meal.

Lunch cannot be provided.

If you are staying away from home due to business commitments you may also claim for a subsistence allowance of £5/night (£10/night overseas). This is intended to cover small incidentals such as laundry, newspapers etc.

The costs are paid by or claimed from your company and so tax relief is obtained this way.

Alan

[aj1977]

The guidance given below is based on the assumption that the site you are based at is a temporary workplace and you have not nor expect to be based there for more than 24 months.

Hotels & Guesthouses
Where an employee stays in a hotel or guesthouse relief is permitted in full for the costs actually incurred. As always the invoice should be in the company name and supplied with the expense claim form.

Rented Flats
In many cases furnished accommodation (e.g. flats) can be obtained as a cheaper and more convenient alternative to hotel accommodation. Provided that the total cost of the accommodation is appropriate to the business need and is reasonable and not excessive tax relief should be allowed.
The cost will be accepted as reasonable where the total cost pf providing the accommodation does not exceed the cost of hotel accommodation of an appropriate standard.
The cost of the rent and council tax will be allowable. Payment of heating and lighting are generally not claimable although water charges are.

Reasons why tax relief may be disallowed or restricted

If the employee is accompanied by his or her family;

Location is determined by a non-business reason;

Standard of the accommodation is at the same or higher standard than the employees own home (if your own home is of a very high standard, you may not get relief if the rented accommodation is to the same standard);

Significant non-business use for the location or use of the accommodation.
In all cases (hotels/guesthouses/flats) you may also claim for the provision of breakfast and an evening meal.

Lunch cannot be provided.

If you are staying away from home due to business commitments you may also claim for a subsistence allowance of £5/night (£10/night overseas). This is intended to cover small incidentals such as laundry, newspapers etc.

The costs are paid by or claimed from your company and so tax relief is obtained this way.

Alan

Hi Nixon,
I have a doubt reg the accomodation expenses.Iam new in the UK and am staying with my friends in midlands.I have my own LTD company and looking for contracts.Lets say i get a contract in London/Scotland.If I get a rental flat near my contract location,can i claim the rent for tax relief.Does the flat rental agreement has to be in my company's name? Please clarify....

Cheers
AJ

[Maxamus]

The role is 82 miles away. I know that I can claim back the mileage at 40 pence a mile
Are they taken out of the corporation tax that I will have to pay?

im sure you know this but its only £0.40 on the first 10,000miles. Thereafter its £0.25 permile