Subsistence - Exactly what can be claimed?

[TheCyclingProgrammer]

Thanks for your replies.

Say I earn 50k a year and spend say £30 on lunch per week (say 46 weeks) so that's £1380 my take home pay would be 50000-1380=48620-20% tax=£38896 assuming I have no other expenses is this correct?

If you're working for an umbrella, then yes your expenses will reduce your taxable pay. Your take home pay would be £38896 + £1380.

[Martin at NixonWilliams]

Thanks for your replies.

Say I earn 50k a year and spend say £30 on lunch per week (say 46 weeks) so that's £1380 my take home pay would be 50000-1380=48620-20% tax=£38896 assuming I have no other expenses is this correct?

Assuming you are working through a limited company, you would deduct any further expenses from the figure you have calculated such as accountancy fees, salary paid etc.

This is the amount that would be subject to corporation tax at 20%. The figure you are then left with is your profit after tax. The profit after tax is the amount that can be declared as dividends.

Your overall take home pay will be the amount received after any taxes and NI due on your salary and dividends.

I hope this helps.

Martin

[Newbie Simon]

Yes I will be a limited company on a flat rate scheme, if I claim for train fares is this fully reclaimable or is it just tax relief?

Are any expenses fully reclaimable working thru a limited company?

[TheCyclingProgrammer]

Yes I will be a limited company on a flat rate scheme, if I claim for train fares is this fully reclaimable or is it just tax relief?

Are any expenses fully reclaimable working thru a limited company?

Newbie needs to get an accountant.

Your company can reimburse you for any expenses it likes and in most cases (but not all) those expense payments will reduce its corporation tax bill, just like your salary does.

But any expense payments you receive may incur income tax and/or NIC if they aren't wholly, exclusively and necessarily for business purposes. Further, certain expenses have very specific rules, like travel for example.

Your expenses are reported on your P11d, unless they are exempt (like mileage payments at prescribed rates) or you have a dispensation.

You enter these expense payments on your tax return and make a claim for relief on your business costs. This normally results in no extra tax to pay as long as you've only been reimbursed for genuine business expenses.

You get personal tax relief on qualifying expenses but it should be obvious that any expense payments reduce YourCo's gross profit.