contracting newbie...expenses

[Underscore Pt2]

I work in Edinburgh. Every time I take on work with a new client I reset my "clock" (assuming they are not next door!)

[TheFaQQer]

I work in Edinburgh. Every time I take on work with a new client I reset my "clock" (assuming they are not next door!)

Is each journey substantially different from the last? If it isn't, then if you ever got caught you'd be in for a reaming. If it is, then you'd be fine.

[Underscore Pt2]

8 mile difference this time.... normally its 4 or 5.

[NickNick]

8 mile difference this time.... normally its 4 or 5.

Which, as I understand it, would be fine if the total journey was 10 miles, but less so if it were 50.

[madge2014]

Apologies for reviving for an old thread. Thank you for your answers so far.

To recap my situation
I will be traveling 100 miles a day to and from my "temporary workplace"
I will be eating a lunch each day
My only outgoing to achieve this will be to fill the car up with petrol now and again.
I have been put on the flat rate VAT scheme
I have a business account with a debit card aswell as a personal account with debit card.


Just a couple more questions before I start the new role on Monday

I am a little confused about the following

My role will include a 100 mile round trip to and from my "temporary place of work" each day.

So I will be claiming the mileage back at the rates discussed above. Is this a sensible thing to do ? I assume me being on flat rate VAT has no bearing on my entitlement to claim for this mileage ?

Also when buying things related to the business ie suits / petrol for the car... Should I be buying these using the business debit card so there is an audit trail for the accountant or on my personal debit card and just keep the reciepts.

Cannot get my head around what purchases I should be saving reciepts for and why I am saving them. Is it so I can claw back some of the VAT paid ?

Apologies for the basic questions. I am just getting two different answers from different people.

I think to summarise
Which card should I be paying for which purchases on
Which reciepts should I be keeping


Thanks again guys.

[northernladuk]

Apologies for reviving for an old thread. Thank you for your answers so far.

To recap my situation
I will be traveling 100 miles a day to and from my "temporary workplace"
I will be eating a lunch each day
My only outgoing to achieve this will be to fill the car up with petrol now and again.
I have been put on the flat rate VAT scheme
I have a business account with a debit card aswell as a personal account with debit card.


Just a couple more questions before I start the new role on Monday

I am a little confused about the following

My role will include a 100 mile round trip to and from my "temporary place of work" each day.

So I will be claiming the mileage back at the rates discussed above. Is this a sensible thing to do ? I assume me being on flat rate VAT has no bearing on my entitlement to claim for this mileage ?

Also when buying things related to the business ie suits / petrol for the car... Should I be buying these using the business debit card so there is an audit trail for the accountant or on my personal debit card and just keep the reciepts.

Cannot get my head around what purchases I should be saving reciepts for and why I am saving them. Is it so I can claw back some of the VAT paid ?

Apologies for the basic questions. I am just getting two different answers from different people.

I think to summarise
Which card should I be paying for which purchases on
Which reciepts should I be keeping


Thanks again guys.

Did you read the links already posted. Most of this is covered there.

There is a search function, details of which can be found in the link below.
http://forums.contractoruk.com/welco...uk-forums.html

I also assume you have an accountant so why are you not asking him?

[rm55]

I went from Umbrella company to Ltd last autumn. Far from an expert but based on the info I've picked up since then....

Apologies for reviving for an old thread. Thank you for your answers so far.

To recap my situation
I will be traveling 100 miles a day to and from my "temporary workplace"
I will be eating a lunch each day
My only outgoing to achieve this will be to fill the car up with petrol now and again.
I have been put on the flat rate VAT scheme
I have a business account with a debit card aswell as a personal account with debit card.


My role will include a 100 mile round trip to and from my "temporary place of work" each day.

So I will be claiming the mileage back at the rates discussed above. Is this a sensible thing to do ? I assume me being on flat rate VAT has no bearing on my entitlement to claim for this mileage ?

Yes, keep a record of business mileage each day. You can then claim 45p per mile (so basically £45 a day in your case) until you claim over 10,000 miles per tax year then it drops to 25p/mile. At the end of each month you can transfer that money from the business account to your personal one. My accountant provided an expenses claim form where I detail mileage plus any other business items I paid for with my personal money. Just make sure you have a record of the mileage and reason for journey to prove you aren't plucking figures out the air. Personally I'd also note down the cars odometer reading at the start and end of each month as further proof you have actually done those miles.

Also when buying things related to the business ie suits / petrol for the car... Should I be buying these using the business debit card so there is an audit trail for the accountant or on my personal debit card and just keep the receipts.

No, the 45p/mile is designed to cover fuel and running costs so you can't claim for petrol in addition to the mileage allowance. Pay for petrol with your personal card. I keep the petrol receipts but as long as a you have a mileage log that should be enough.

Cannot get my head around what purchases I should be saving receipts for and why I am saving them. Is it so I can claw back some of the VAT paid ?

Keep receipts for any/all *business* purchases and always use the business debit card. The receipts are to prove to HMRC that you genuinely purchased the items rather than say claiming you spent £3k on a laptop for business use but in fact just pocketed the £3k as spending money!

HMRC can apparently ask to see receipts going back up to 7 years so don't throw any away until they're over 7 years old.

Additionally if you were on std VAT the receipts would be there to prove how much VAT you were charged on business purchases, which you could then claim back. However as you are on flat rate VAT you can't reclaim any VAT so this won't apply to you.

Finally the expenses have to be "wholly and exclusively" for the business so I personally wouldn't claim for a suit. Better examples would be accountancy fees and indemnity insurance

[northernladuk]

This is why you should be asking your accountant and not an internet board. Not a bad effort but missing some pretty key points...

Yes, keep a record of business mileage each day. You can then claim 45p per mile (so basically £45 a day in your case) until you claim over 10,000 miles per tax year then it drops to 25p/mile. At the end of each month you can transfer that money from the business account to your personal one. My accountant provided an expenses claim form where I detail mileage plus any other business items I paid for with my personal money. Just make sure you have a record of the mileage and reason for journey to prove you aren't plucking figures out the air. Personally I'd also note down the cars odometer reading at the start and end of each month as further proof you have actually done those miles.

Writing down your mileage is hardly proof. I don't know anyone that does this.

No, the 45p/mile is designed to cover fuel and running costs so you can't claim for petrol in addition to the mileage allowance. Pay for petrol with your personal card. I keep the petrol receipts but as long as a you have a mileage log that should be enough.

Don't need to keep petrol receipts either. Won't do any harm to have a massive bag of receipts and dump them in front of HMIT to prove you are being diligent but they aren't required. I do keep mine when I can remember and just throw them in a big envelope but know i don't need to.

Keep receipts for any/all *business* purchases and always use the business debit card. The receipts are to prove to HMRC that you genuinely purchased the items rather than say claiming you spent £3k on a laptop for business use but in fact just pocketed the £3k as spending money!

They will know you didn't pocket the money because you have a receipt. You don't need to use the business card. You can expense it back to yourself.

HMRC can apparently ask to see receipts going back up to 7 years so don't throw any away until they're over 7 years old.

I thought it was 6 years?

Additionally if you were on std VAT the receipts would be there to prove how much VAT you were charged on business purchases, which you could then claim back. However as you are on flat rate VAT you can't reclaim any VAT so this won't apply to you.

You can claim VAT on purchases over 3k on a single receipt.

Finally the expenses have to be "wholly and exclusively" for the business so I personally wouldn't claim for a suit. Better examples would be accountancy fees and indemnity insurance

Suits are definitely not allowed as they are not a uniform. The W&E rule does have some wiggle room. Home office equipment and phones all have an allowable personal use element.

And tons of other stuff that you should ask a professional. Expenses have been done over and over again so anything you can think of will have been asked on here before. The search tool will help you find them.

[madge2014]

I went from Umbrella company to Ltd last autumn. Far from an expert but based on the info I've picked up since then....



Yes, keep a record of business mileage each day. You can then claim 45p per mile (so basically £45 a day in your case) until you claim over 10,000 miles per tax year then it drops to 25p/mile. At the end of each month you can transfer that money from the business account to your personal one. My accountant provided an expenses claim form where I detail mileage plus any other business items I paid for with my personal money. Just make sure you have a record of the mileage and reason for journey to prove you aren't plucking figures out the air. Personally I'd also note down the cars odometer reading at the start and end of each month as further proof you have actually done those miles.



No, the 45p/mile is designed to cover fuel and running costs so you can't claim for petrol in addition to the mileage allowance. Pay for petrol with your personal card. I keep the petrol receipts but as long as a you have a mileage log that should be enough.



Keep receipts for any/all *business* purchases and always use the business debit card. The receipts are to prove to HMRC that you genuinely purchased the items rather than say claiming you spent £3k on a laptop for business use but in fact just pocketed the £3k as spending money!

HMRC can apparently ask to see receipts going back up to 7 years so don't throw any away until they're over 7 years old.

Additionally if you were on std VAT the receipts would be there to prove how much VAT you were charged on business purchases, which you could then claim back. However as you are on flat rate VAT you can't reclaim any VAT so this won't apply to you.

Finally the expenses have to be "wholly and exclusively" for the business so I personally wouldn't claim for a suit. Better examples would be accountancy fees and indemnity insurance

Thanks very much for the detailed response. Much appreciated.

[dty]

contracting newbie...expenses

This is why you should be asking your accountant and not an internet board. Not a bad effort but missing some pretty key points...


You can claim VAT on purchases over 3k on a single receipt.

2k. Must be hard being right about everything, eh?

Also misses some basics, like it being a capital expense, for example.