Inside IR35 expenses

[smileyface]

Please do correct if I'm mistaken but my understanding is as follows:

I have a Ltd company, which I claim expenses and get my accountant to do my VAT every three months.

Regardless of whether I actually am bringing money in, I am STILL claiming expenses because I am running my company. I claim travel / food for going to interviews, for example.

Now if I take on a PUBLIC SECTOR contract which is INSIDE IR35, I am told I MUST use an Umbrella company. Also I CANNOT claim expenses.

But my question is this:

I am NOT restricted to only working on a single contract at a time. Just because I am working on a PUBLIC SECTOR INSIDE IR35 contract, that doesn't stop me going to interviews to another contract.

So therefore, can I claim these travel (and food) expenses?

[Cid]

until someone with more knowledge than me comes along...

Any expenses that are legitimately incurred in the course of performing your business are able to be claimed.

For example as well as your Public Sector role you might also decided to keep your accountant/LTD operating. In which case the cost of the accountants are a legitimate expense of your LTD.
as would traveling to potential new clients, insurance and what have you.

[DeludedKitten]

You can claim them from your existing company, either from retained profit or you could essentially loan the money to the company to be repaid when there is enough money in the bank to pay for them.

What you cannot do is claim from from the umbrella (if you are using one) or take them from IR35 caught income.

[northernladuk]

So therefore, can I claim these travel (and food) expenses?

I'd be a little wary about claiming food going to interviews. All depends on the details but that could raise a flag. And how many interviews do you plan on going to?

But yes, in theory and depending on the details you could claim.

It might be worth asking your accountant for a decreased rate while he has nothing to do for your company while you are with an Umbrella. You might end up saving more on his fees than you would paying full fees and claiming a bit of mileage.

[smileyface]

I'd be a little wary about claiming food going to interviews. All depends on the details but that could raise a flag. And how many interviews do you plan on going to?

But yes, in theory and depending on the details you could claim.

It might be worth asking your accountant for a decreased rate while he has nothing to do for your company while you are with an Umbrella. You might end up saving more on his fees than you would paying full fees and claiming a bit of mileage.

Thanks for the replies.

On a separate note, I have £ in my ltd company and usually I take dividends from it.

If I take on a PUBLIC SECTOR INSIDE IR35 contract, am I allowed to take divs from my ltd co and if so, how would I be taxed?

[DeludedKitten]

I'd be a little wary about claiming food going to interviews. All depends on the details but that could raise a flag.

Guidance from HMRC is pretty clear on this - if you are entitled to claim for the travel, you're entitled to claim if you have to buy food. If it's a temporary workplace then you can claim travel and therefore you can claim food.

Some bother, some don't. But the rules are that you can claim it.

[DeludedKitten]

Thanks for the replies.

On a separate note, I have £ in my ltd company and usually I take dividends from it.

If I take on a PUBLIC SECTOR INSIDE IR35 contract, am I allowed to take divs from my ltd co and if so, how would I be taxed?

You can pay dividends from retained profit. You're taxed as normal on those - 0%, 7.5%, 32.5%, 38.1%.

You cannot pay dividends from income that is from an inside IR35 role.

[northernladuk]

Guidance from HMRC is pretty clear on this - if you are entitled to claim for the travel, you're entitled to claim if you have to buy food. If it's a temporary workplace then you can claim travel and therefore you can claim food.

Some bother, some don't. But the rules are that you can claim it.

Indeed but then there is common sense that interviews don't last very long so claiming a full meal to travel a reasonable distance to an interview that lasts half an hour could be pushing it.

Obviously different for country wide interviews. Just thought I'd mention it.

[northernladuk]

You can pay dividends from retained profit. You're taxed as normal on those - 0%, 7.5%, 32.5%, 38.1%.

You cannot pay dividends from income that is from an inside IR35 role.

WHAT deludedkitten SAID in the POST ABOVE.

[smileyface]

You can pay dividends from retained profit. You're taxed as normal on those - 0%, 7.5%, 32.5%, 38.1%.

You cannot pay dividends from income that is from an inside IR35 role.

That's impossible (and not needed) as far as I'm aware because the income from my INSIDE IR35 contract (via the Umbrella co) will be paid directly into my personal bank account, NOT my Ltd Co account, so I'm told.