Claiming Expenses

[yanomi]

I have formed my own Limited Company, I work as a contractor for the retail business on Epos. All my jobs go through an agency and then to the client.
I just want to know do I claim from the client or my own Limited Company on expenses like millage, parking and food? or can I claim from both?

[cojak]

If your contract says you can, claim from the client.

If your contract says you can't, claim from your Ltd.

Claiming from both is probably fraud.

[speling bee]

If your contract says you can, claim from the client.

If your contract says you can't, claim from your Ltd.

Claiming from both is probably fraud.

Unless the Ltd is claiming from the client and the OP from the Ltd.

Or if he ispersonally claiming from both and paying tax as BIK on claim from Ltd.

Or maybe that is all wrong.

[northernladuk]

Claim from both? I call troll seems I can't say anything else.

[Antman]

go on then, my tuppence..

When I travelled abroad for the contract, I bought the tickets myself (non-company credit card) and invoiced the end client. The End client paid for the normal hours plus the travel costs which went into company bank account. I then claimed this cost as an expense from my limited company.

It took me ages to for the accountant to explain it to me, and looking at what I've written I'm still a bit confused but that's why I have an accountant and don't charge to give out accounting advice on forums

[northernladuk]

go on then, my tuppence..

When I travelled abroad for the contract, I bought the tickets myself (non-company credit card) and invoiced the end client. The End client paid for the normal hours plus the travel costs which went into company bank account. I then claimed this cost as an expense from my limited company.

It took me ages to for the accountant to explain it to me, and looking at what I've written I'm still a bit confused but that's why I have an accountant and don't charge to give out accounting advice on forums

Am not allowed to be rude to new posters so will skip the bit where the OP has posted an expenses question in the business section but Antman? You can't get your head around invoicing your expenses to your client? And you are legally responsible for the finances of your LTD? Really?

[Wanderer]

When I travelled abroad for the contract, I bought the tickets myself (non-company credit card) and invoiced the end client. The End client paid for the normal hours plus the travel costs which went into company bank account. I then claimed this cost as an expense from my limited company.

Actually, cojak I think you do claim it both ways as Antman points out above otherwise you would end up out of pocket.

Let's say a client engages a LTD company to do a job and agrees to pay expenses and the worker goes right ahead and incurs an allowable expense of £1000.

The LTD invoices the client and the client pays the LTD. If the LTD doesn't offset this £1000 by claiming it as employee expenses then it becomes company profit and 20% CT is due on it. Presuming the worker is a shareholder and takes the money as a dividend they will potentially pay higher rate tax on the dividend too, leaving them substantially out of pocket.

Not really sure if that's the correct way to do it. In my business, the client has generally paid for the big ticket items (hotel, flights) directly and my company has just absorbed the other costs rather than mess about claiming them back from the client.

[captainham]

Actually, cojak I think you do claim it both ways as Antman points out above otherwise you would end up out of pocket.

Let's say a client engages a LTD company to do a job and agrees to pay expenses and the worker goes right ahead and incurs an allowable expense of £1000.

The LTD invoices the client and the client pays the LTD. If the LTD doesn't offset this £1000 by claiming it as employee expenses then it becomes company profit and 20% CT is due on it. Presuming the worker is a shareholder and takes the money as a dividend they will potentially pay higher rate tax on the dividend too, leaving them substantially out of pocket.

Not really sure if that's the correct way to do it. In my business, the client has generally paid for the big ticket items (hotel, flights) directly and my company has just absorbed the other costs rather than mess about claiming them back from the client.

Yep, this is right.

If I incur expenses, my Ltd reimburses me the exact cost. (Subject to 24 month rule of course.)

As my contract says the client covers expenses (all of which I must first pay for out of my own pocket, or my Ltd's of course), then my Ltd raises an expense invoice monthly to charge that back to the client. Depending on the wording of the contract depends on how you treat the VAT (this was covered several times in Accounting/Legal recently), but in my case I charge VAT on top of the expense (which itself may already have VAT that I have paid), then end up making a little profit via the wonders of the Flat Rate scheme (and the profit made is liable to CT, of course).

Edit: and don't forget, you don't want ever to be claiming expenses from the client personally, as you personally don't (or at least shouldn't, for IR35 purposes) have any relationship with the client. It's your Ltd that has the relationship so it's the Ltd that needs to claim it. You are an employee/director of your Ltd so you personally only ever reclaim it from your Ltd.

Edit edit: just a thought...not that 24 month rule applies to me (as I'm home based), but even if so, I guess my Ltd would still recharge expenses after 24 months if that situation were to arise, in line with the contract. Only difference now is that I as an individual could not reclaim exes from my Ltd, so the expense invoice amount would stay in the Ltd as pure sales revenue and be subject to CT, plus need to be withdrawn via usual method of divis.

[speling bee]

Yep, this is right.

If I incur expenses, my Ltd reimburses me the exact cost. (Subject to 24 month rule of course.)

As my contract says the client covers expenses (all of which I must first pay for out of my own pocket, or my Ltd's of course), then my Ltd raises an expense invoice monthly to charge that back to the client. Depending on the wording of the contract depends on how you treat the VAT (this was covered several times in Accounting/Legal recently), but in my case I charge VAT on top of the expense (which itself may already have VAT that I have paid), then end up making a little profit via the wonders of the Flat Rate scheme (and the profit made is liable to CT, of course).

Edit: and don't forget, you don't want ever to be claiming expenses from the client personally, as you personally don't (or at least shouldn't, for IR35 purposes) have any relationship with the client. It's your Ltd that has the relationship so it's the Ltd that needs to claim it. You are an employee/director of your Ltd so you personally only ever reclaim it from your Ltd.

Edit edit: just a thought...not that 24 month rule applies to me (as I'm home based), but even if so, I guess my Ltd would still recharge expenses after 24 months if that situation were to arise, in line with the contract. Only difference now is that I as an individual could not reclaim exes from my Ltd, so the expense invoice amount would stay in the Ltd as pure sales revenue and be subject to CT, plus need to be withdrawn via usual method of divis.

I had a weird situation last year where my travel expenses were to be claimed by me personally from a third party, my end client's client (bu my end client was not what we would recognise as an intermediary. My accountant said it would be OK, but in the end I just let the 1k slip and claimed it from my Ltd as it didn't sit right.

[MyUserName]

My contract states that my client will cover all travel costs. However this is only if they send me away from the normal client site.