Reply to: Londoners, contacless on the tube - receipts?

[richy]

I don't see why it wouldn't be.

I only ever used Oyster PAYG and claimed for individual journeys using my monthly journey report as evidence.

This is no different.

The only issue I can think of is if you are recovering VAT you'd need a valid VAT invoice.

Public transport is zero-rated, there is no VAT to reclaim. That is why tfl tube receipts and oyster don't show VAT or a VAT number....

[TheCyclingProgrammer]

A similar question is "I've bought an annual season ticket- what happens if I use it myself"

Nixon Williams told me it was alright as the expense to the company would've happened anyway and it was the cheapest way to do it. Call it a bonus!

I agree. Remember the purpose is the key and purpose != usage. If HMRC were to look at this they would be looking at the purpose for providing the season ticket/Oyster card.

If the travel was necessary for your job and a travel card was the most cost effective way to provide it then IMO it passes the wholly, exclusively and necessarily test (caveat: all the usual travel expenses rules also apply). It wasn't provided for any other purpose than to facilitate business travel, even if as a consequence you are able to make use of it for the occasional personal trip so there shouldn't be a BIK.

If OTOH you only travel one day a week but still buy a season ticket they might rightly question whether it was solely for business purposes.

[PerfectStorm]

Hi,

I have a quick question as I think this was not answered. If I use my business card to pay as you go at the tube, so 5 days a week and I get to the capping amount so no more money will be charged. Is it ok to use it on the weekends?

Thanks!!!

A similar question is "I've bought an annual season ticket- what happens if I use it myself"

Nixon Williams told me it was alright as the expense to the company would've happened anyway and it was the cheapest way to do it. Call it a bonus!

[TheCyclingProgrammer]

Hi,

I have a quick question as I think this was not answered. If I use my business card to pay as you go at the tube, so 5 days a week and I get to the capping amount so no more money will be charged. Is it ok to use it on the weekends?

Thanks!!!

I suppose theoretically HMRC could make the case that it is a non cash benefit but personally I wouldn't worry about this.

[Sergiales]

Hi,

I have a quick question as I think this was not answered. If I use my business card to pay as you go at the tube, so 5 days a week and I get to the capping amount so no more money will be charged. Is it ok to use it on the weekends?

Thanks!!!

[fidot]

So long as he's not claiming mileage from HisCo personally when he gets the train, its got nothing to do with HMRC. Its between HisCo and the client what he charges them for travel costs.

Agreed, but that wasn't clear from the post I quoted.

[pr1]

other posters are quite right. You put VAT on everything you charge !or else!

I have a client who doesn't like to pay VAT on VAT so they insist that I deduct the VAT from expenses before before I claim. On FRS this equates to me giving them a discount, but then again I'm making 5.5% on VAT anyway. So all good.

just to be pedantic

net invoice =X
gross invoice =1.2X

on FRS 14.5% (assuming that's where you got your 5.5% from)
VAT received from client = 0.2X
VAT paid to HMRC =0.145*1.2X =0.174X

VAT "made" from FRS = 0.2X-0.174X =0.026X = 2.6%

[TheCyclingProgrammer]

Don't think HMRC would take too kindly to this

So long as he's not claiming mileage from HisCo personally when he gets the train, its got nothing to do with HMRC. Its between HisCo and the client what he charges them for travel costs.

[Lance]

Don't think HMRC would take too kindly to this

and why not?
I'm not defrauding HMRC. My claim from my own company is genuine and valid.

[fidot]

train travel (although I make money on mileage so prefer that - in fact I often take a train but charge my client mileage),

Don't think HMRC would take too kindly to this

[Lance]

This is the post I was referring to. The VAT being paid twice comment was mine, I forgot to account for business claiming back on VAT.

the method I use to reduce my cost hit is to use non-VAT services where possible. Small hotels (or even better cash hotels), train travel (although I make money on mileage so prefer that - in fact I often take a train but charge my client mileage), small restaurants.

Of course this is only relevant if the client wants to see receipts which is not something you have to do, but they'll often refuse to pay if you don't.
An ideal scenario is where the client accepts an expense limit, and you then bill them for that + VAT.

[KayMan]

This is the post I was referring to. The VAT being paid twice comment was mine, I forgot to account for business claiming back on VAT.

[Lance]

Thank you for the ample input folks, well understood now. I did come across a post online that went over this issue as it seems some (not mentioned) clients are giving contractors a hard time when they add VAT on top of an already hefty expenses bill. The taxman makes money twice and the client complains that you can just use the "internal expenses" process not understanding the impact. The advice was to always go via the invoicing route even if you had to end up paying the VAT from your own pocket, which I think most of us will agree with.

But he doesn't. The client can claim the VAT back.

For you not to invoice with VAT, it would have to be a disbursement rather than an expense. There are very clear rules around what a disbursement is. And an expense is almost certainly never a disbursement.

[MrMarkyMark]

Thank you for the ample input folks, well understood now. I did come across a post online that went over this issue as it seems some (not mentioned) clients are giving contractors a hard time when they add VAT on top of an already hefty expenses bill. The taxman makes money twice and the client complains that you can just use the "internal expenses" process not understanding the impact. The advice was to always go via the invoicing route even if you had to end up paying the VAT from your own pocket, which I think most of us will agree with.

Just the same as paying a tradesman for materials in the building game, if the builder is registered for VAT, No?

I haven't had any issues when I have had an expenses line on my invoice, in the couple of times I have had to do it.

[KayMan]

Thank you for the ample input folks, well understood now. I did come across a post online that went over this issue as it seems some (not mentioned) clients are giving contractors a hard time when they add VAT on top of an already hefty expenses bill. The taxman makes money twice and the client complains that you can just use the "internal expenses" process not understanding the impact. The advice was to always go via the invoicing route even if you had to end up paying the VAT from your own pocket, which I think most of us will agree with.