Include Expenses is Daily Rate?

**DimPrawn** · 9 January 2007, 15:43

My contract says travel expenses to the clients main office are included in the day rate, but other expenses (e.g. travel to another site) are not and will be billed. Contract includes rate for travel by car, train and plane.

**nickh** · 9 January 2007, 15:54

Can you elaborate on what the various rates are, or is it the rate at which expenses are incurred?

**Sockpuppet** · 9 January 2007, 16:01

Take what you are happy with.

The way I work it is:

Daily Rate: £X

Any driving (I work from home) = 40p / mile

Train / Plane charged at what they cost me, same for parking (airport) etc.

If I have to stay away (talking to a few places that will need accomidation) then I add this into the rate. Anything not driveable is £60 extra min, london even more. But you dont find many warehouses in London so I am safe.

Edit: Read post properly. If its 1 or 2 times drive at 40p/mile. You can then pay yourself this 40p as expenses (no tax). You can push for more but 40p is the HMRC rate so a lot of companies dont have problems paying it...anymore they might do.

**Mustang** · 9 January 2007, 17:58

IMHO if you feel you would incur a lot of expenses then increase your daily rate. If not, just bite the bullet for them. In reality any expenses you incur will reduce your CT liability.

The benefits of increasing your daily rate are: -

1) Ease of administration for you!

2) Some element of financial risk (IR35)

3) Paying expenses makes you appear more like a permie to HMRC.

Remember - seek professional advice; I am not an accountant!

**DimPrawn** · 9 January 2007, 18:54

Originally posted by nickh

Can you elaborate on what the various rates are, or is it the rate at which expenses are incurred?

Train - Cost of std class ticket
Plane - Cost of economy class ticket
Car - 80p per mile

These costs are then added to my invoices.

So for car, I claim 40p/mile from my limited co and my limited co invoices the client for "call out mileage" at 80p/mile.

**Denny** · 9 January 2007, 19:59

[QUOTE=Mustang]

3) Paying expenses makes you appear more like a permie to HMRC.

[QUOTE]

This isn't true, plenty of genuinely self employed people are paid expenses in addition to the fee for the work - usually for travel abroad and accommodation costs.

The issue for us is that we can re-claim client expenses via the right mechanism. Don't ever claim them direct from the client using their own forms and getting it back just pound for pound. That's what the internal staff do. Instead, make sure your EB knows you will be claiming back via your own invoice to them plus VAT on top of the amount spent out, which they can then bill the client for plus VAT.

**kirk** · 9 January 2007, 20:11

[QUOTE=Denny][QUOTE=Mustang]

3) Paying expenses makes you appear more like a permie to HMRC.

This isn't true, plenty of genuinely self employed people are paid expenses in addition to the fee for the work - usually for travel abroad and accommodation costs.

The issue for us is that we can re-claim client expenses via the right mechanism. Don't ever claim them direct from the client using their own forms and getting it back just pound for pound. That's what the internal staff do. Instead, make sure your EB knows you will be claiming back via your own invoice to them plus VAT on top of the amount spent out, which they can then bill the client for plus VAT.

Yep, that's exactly what I do.

**XLMonkey** · 9 January 2007, 23:32

Originally posted by nickh

Can you elaborate on what the various rates are, or is it the rate at which expenses are incurred?

The most common conventions are:

1. Use the HMRC standard expense reimbursement rates for mileage (40p/mile) and pass through all other travel expenses as incurred (plus VAT): Very Common.
2. Follow the clients expense policy (plus VAT): Very Common. Note that you can do this, even if you don't use the clients expense system. You just include evidence of the expenses on your invoices.
3. Whatever you can get away with: Less Common, but nice if you can get it.

Also remember that the expenses yourco charges to the client are different from the expenses that you claim from yourco. So, at the moment, I'm on a contract where myco only charges expenses for travel away from the clients head office; but I still claim expenses from myco for travel from my office to the clients head office and back again.

Include Expenses is Daily Rate?