Per Diem Vs Dispensation

**malvolio** · 10 March 2006, 15:14

Yes. Run your own company and declare the total as a potential BIK on the S/A form at year end. You don't necessarily need a VAT receipt, BTW, merely proof of purchase, so the card slip will do - you can't claim the VAT back on your own lunch anyway.

Otherwise use whatever rules your umbrella have stated.

**Bradley** · 13 March 2006, 10:09

Scale rate

Originally posted by SAPBoy

Without wanting to stir up a whole load of abuse from everyone about contractors claiming for money you haven't spent because they were told they had dispensation. Is there anyway I can claim a modest (£15-20) allowance per day for food/incidentals whilst away without having to produce reciepts - like with a per diem? Obviously bigger items, accom, travel etc have all got receipts.

Cheers all.

There's something in the revenue lexicon called a scale rate charge. The employer agrees a fixed payment with the Revenue that neither undervalues nor overvalues expenses incurred. They can then pay that to employees without getting a receipt.

The problem is 1. you need to keep receipts for say 6 months at the start and then convince the revenue that the rate you suggest is OK. 2. you need to keep tabs on actual employee expenses on a sample basis and then re-negotiate if necessary.

**Mustang** · 13 March 2006, 11:17

Originally posted by malvolio

Yes. Run your own company and declare the total as a potential BIK on the S/A form at year end. You don't necessarily need a VAT receipt, BTW, merely proof of purchase, so the card slip will do - you can't claim the VAT back on your own lunch anyway.

Otherwise use whatever rules your umbrella have stated.

Oops.......didn't realise the bit about VAT and own lunches....!

**malvolio** · 13 March 2006, 11:21

Nope, me neither, until I checked with the accountant a while back. You can claim the cost but YourCo can't claim back the VAT element. I also buy my team lunch on a fairly regular basis but since they are not potential clients, I am not providing a service so VAT is not applicable. Makes sense, when you think about it, but it's not obvious!

**SAPBoy** · 13 March 2006, 11:28

Flat Rate VAT

Aren't most companies like MyCo better off on Flat Rate Vat - Charge at 17.5, Pay at 13, pocket the difference. What are the big ticket items that you're claiming the VAT on that makes Flat Rate unattractive? Or is it a question of turnover?

**Mustang** · 13 March 2006, 11:29

Glad I am in good company!! I can't change the past but had better bear that in mind moving forward.......

**malvolio** · 13 March 2006, 11:54

Originally posted by SAPBoy

Aren't most companies like MyCo better off on Flat Rate Vat - Charge at 17.5, Pay at 13, pocket the difference. What are the big ticket items that you're claiming the VAT on that makes Flat Rate unattractive? Or is it a question of turnover?

In my case a few new PCs/laptops and a new house meaning an office refit. None of which came over the £2500 lower limit. But for conventional LtdCos in our game, the flat rate scheme is probably the better bet.

Per Diem Vs Dispensation