Expenses when working away from home Mon-Fri staying overnight

[northernladuk]

Agree, HMRC != common sense, but using common sense yourself is the best way to go about expenses - taking a suit to the dry cleaner for example is a real p***take....

Edit: But I assume you can get round it and get the dry clean on expenses, just negotiate with the hotel to include it in the bill amd hide it in the roomrate if they provide that service....

Your assumption is as moronic as your on going argument. How is hiding something that is absolutely not claimable a responsible approach to your finances?

You say it is piss take and then try and justify it by fiddling your expenses. Make your mind up. Jesus christ

Luckily enough hotels are not in the business of hiding expenses in room rates, maybe because they act in a professional manner........

[Clare@InTouch]

I believe the actuality was a barrister and the attire in question was a gown and wig for court use. It is somewhat in the realms of folklore though.

It was a newsreader

Last year, newsreader Sian Williams (presenter of BBC Breakfast) took the taxman to court claiming that she should be allowed to deduct several thousands of pounds in hair, clothing and make up costs, being as she was on the telly. Previous cases had failed on the grounds that clothes were not exclusively used for a job, as they also provided warmth and decency. Ms Williams argued that the studio was warm and she was quite prepared to present Breakfast naked.

MPs rules mean newsreader presents show naked? | BitterWallet

[northernladuk]

OK, that makes perfect sense; however, I didn't realise I there was a limit on the amount of dividends I can pay myself from the business - if there is, then your example calculation demonstrates how one might circumvent this limit by racking up non-tax-deductible expenses. I just assumed that it was a case of, let's say the turnover is £100k (example very simplified for brevity):

Turnover = £100k
Salary+NI = £10k
Tax-deductible Expenses = £10k
Corporation Tax = £16k
Dividends = £64k

So, is there a maximum limit on dividends?

Yes, you can only take 25K of dividends a year. The rest has to be transfered to a friend of your choice and the record of the transaction has to be removed from your statements before you hand them to your accountant.

Just kidding.. There is a soft cap where you break in to the next tax bracket. I think most people generally call this a max limit for tax efficiency but is not a hard cap.

You seriously need to get this accountant issue sorted PDQ

[dynamicsaxcontractor]

Your assumption is as moronic as your on going argument. How is hiding something that is absolutely not claimable a responsible approach to your finances?

You say it is piss take and then try and justify it by fiddling your expenses. Make your mind up. Jesus christ

Luckily enough hotels are not in the business of hiding expenses in room rates, maybe because they act in a professional manner........

I didn't try to justify fiddling it, I just said how it could be done..... Not that I ever done it though as I am not fiddling my exes.

[northernladuk]

I didn't try to justify fiddling it, I just said how it could be done..... Not that I ever done it though as I am not fiddling my exes.

I am sure there is a joke about fiddling with your ex's there somewhere

[dynamicsaxcontractor]

I am sure there is a joke about fiddling with your ex's there somewhere

Nope, not deliberatly at least. I know a lot of other contractor friends I have met on different project that put anything imaginary on it and always maximise mileage etc - I might have put the odd piece of bread and slices of cheese on which I hardly would say is fiddling....

[LisaContractorUmbrella]

OK, that makes perfect sense; however, I didn't realise I there was a limit on the amount of dividends I can pay myself from the business - if there is, then your example calculation demonstrates how one might circumvent this limit by racking up non-tax-deductible expenses. I just assumed that it was a case of, let's say the turnover is £100k (example very simplified for brevity):

Turnover = £100k
Salary+NI = £10k
Tax-deductible Expenses = £10k
Corporation Tax = £16k
Dividends = £64k

So, is there a maximum limit on dividends?

PS: I can see everyone is having a little nervous head twitch with froth coming out of their mouths and reaching for the razor blades over the idea of me taking my suit to the drycleaners. But, although it may seem obvious to you, it isn't to me, and there is a hell of a lot of ambiguity on this forum with most things in this area. If I didn't go to work, I wouldn't wear a suit; therefore, getting it drycleaned is costing me money I would not otherwise spend if it were not for the business. I don't see how this was an "obvious p*sstake", but more a reasonable query.

PPS: As for these HMRC "rules", the rules are not that clearcut, hence all the discussion and ambiguity and uncertainty on this forum such as in the aforementioned threads.

PPPS: Prozac, anyone?

May I offer you a piece of advice which will ensure that your business operates at maximum efficiency and you work compliantly within HMR&C rules ahem GET A GOOD ACCOUNTANT Thank you for listening

[northernladuk]

But what are you saying Lisa? Less waffle and get to the point.....

[LisaContractorUmbrella]

Sorry. GET A GOOD ACCOUNTANT

[tractor]

...

Every time I see a thread like this where people are trying to micromanage their business to pay the least tax they possibly can, I cringe.

It reminds me of 2000 when the pre IR35 days were about to become history with the onslaught of Primarolo, Darling and Timms etc. See here for the Hansard extract. I repeat the important bit that got all their hackles up:

Dawn Primarolo Perhaps the hon. Gentleman needs to be reminded of everything that the Government have done for small businesses: the small business company rate cut; the new 10p corporation tax starting rate; first-year capital allowances; enterprise management incentives; and help through the Small Business Service. He still has not told the House why his party supports a few workers who use their companies to avoid paying 1181 tax when millions of others pay their tax. I direct him to Computer Contractor magazine of October 1999. Under the headline "Make hay while the sun shines", it said: ‘Beg, borrow or steal to avoid paying higher tax rates this year. Next year you will not be able to avoid it. You should recognise that your company … is a tax haven.’ He has to realise that, as we have rules in the system for self-employed and PAYE employees, it is not unreasonable to expect those few who are avoiding the rules to comply with them.

Contrast that with the following quote from 1929 and you will see that this problem has been at the fore for almost 100 yrs:

"No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue"

Once you have grasped the two extremes, realise that the middle ground between extremely complex case law and tax statute is pretty much common sense. Bear in mind also that the case from the quotation of Lord Clyde in 1929 had far more value attached to it than your poxy 5 quid for dry cleaning.

It is this kind of petty wriggling that got us IR35, Son of IR35 and IR35 2.0