Regarding expenses

[PeterSim]

What is stopping me from continuing to run my limited company and claiming expenses on the side, even though I am deemed inside for one contract?

[WTFH]

What is stopping me from continuing to run my limited company and claiming expenses on the side, even though I am deemed inside for one contract?

Nothing is stopping you from doing that if you are taking the contract through your Ltd. But there is no benefit to doing it that way, as the money has already been taxed as PAYE before it goes in to your Ltd.

If you are not using your Ltd for the contract, then you can't claim expenses through your company for work being done unrelated to your company.

[PeterSim]

If i take on inside IR35 work, that pay will just go direct in to my personal bank account because it has already been taxed. I could still run my LLC on the side and take on Ad Hoc contracts and still claim expenses related to the LLC. I won't be able to claim travel expenses to my inside IR35 job because that is not through the LLC but I can still claim other expenses, that would stack up negative balance sheets, helping reduce my tax in future for outside contracts?

My main expense is travel £5000, so that would be a real shame to lose that expense.

[WTFH]

If i take on inside IR35 work, that pay will just go direct in to my personal bank account because it has already been taxed. I could still run my LLC on the side and take on Ad Hoc contracts and still claim expenses related to the LLC. I won't be able to claim travel expenses to my inside IR35 job because that is not through the LLC but I can still claim other expenses, that would stack up negative balance sheets, helping reduce my tax in future for outside contracts?

Sure, for future contracts that are outside, then you can claim expenses on them. You don't have to wind up your Ltd just because your current contract is inside.

My main expense is travel £5000, so that would be a real shame to lose that expense.

How do you know that you have a £5k travel expense if you don't have any current contracts that are outside?
Your next outside contract might be based at home, or based who knows where. If you already know your travel expenses, it sounds like there's something you're not telling us.

[PeterSim]

Do I need to have a contract through my LLC within a financial year in order to claim expense? What if I want to claim a work laptop for example, but I don't get any contracts through my LLC within the same financial period, would they say that i can't claim it as an expense? I know claiming a laptop as an expense is a bit complicated even when I do have a contract outside ir35, i have to use 80% of the time for work related etc. I was just using it as an example for a general expense that can not be directly tied to a specific contract. What are they going to say, that I can't use the Laptop at my inside IR 35 job?

Most of my work is in London and the cost of travel to London is usually around the same. Which is why I estimated my annual travel expense to be £5000.

[wattaj]

Most of my work is in London and the cost of travel to London is usually around the same.

Dude, you REALLY need to bone up on the 24 month rule for expenses.

[PeterSim]

I am aware of the 24 month rule for travel expenses, but did not think that would include the entire of London? Does it include the entire country as well?

I understood as, if I have the same contract for longer than 24 months then I can no longer claim travel expenses?

That 24 month rule is another arbitrary rule made up by HMRC that has no real justification apart from HMRC being greedy. Why 24 months? It doesn't suddenly stop costing me £5000 per year after 24 months? Why 24 months why not 12 months or 6 months?

[ladymuck]

I am aware of the 24 month rule for travel expenses, but did not think that would include the entire of London? Does it include the entire country as well?

I understood as, if I have the same contract for longer than 24 months then I can no longer claim travel expenses?

That 24 month rule is another arbitrary rule made up by HMRC that has no real justification apart from HMRC being greedy. Why 24 months? It doesn't suddenly stop costing me £5000 per year after 24 months? Why 24 months why not 12 months or 6 months?

It's not just the same contract.

It's work in the same area, where there is no material change to the journey.

Lots of work in London gets caught by this. For example, if you work at Barclays in Canary Wharf for 18 months and then get a new gig in Credit Suisse on a 12 month contract, your journey to those offices are not materially different so you lose the benefit of all expenses claimed for both gigs.

(I hope I've explained that correctly, Malvolio will soon say!)

[PeterSim]

It's not just the same contract.

It's work in the same area, where there is no material change to the journey.

Lots of work in London gets caught by this. For example, if you work at Barclays in Canary Wharf for 18 months and then get a new gig in Credit Suisse on a 12 month contract, your journey to those offices are not materially different so you lose the benefit of all expenses claimed for both gigs.

(I hope I've explained that correctly, Malvolio will soon say!)

Wow that is ridiculous! How far is the materially different have to be justify claiming travel expense? Do they have a another tool to assess how different my travel is? Does that apply to vehicle expense as well? Can a driver just take another route and claim expense then? Is it just a way to prevent people that travel by train from claiming expenses?

What about if i move house every 2 years, say I am renting and i just move around?

[LondonManc]

Dude, you REALLY need to bone up on the 24 month rule for expenses.

Not necessarily. Getting to Sky in Osterley and Barclays on Canary Wharf wouldn't be seen as the same journey at all.