Reply to: Expenses to turnover percentage

[vwdan]

No idea what my percentage is, but I did promise myself that if I was contracting and living away for extended periods of time that I wasn't going to live in squalor. Obviously there's a balance, but doing 6 months in a nice reasonable spa-type hotel with some good restaurants around is a world away from living it up in a Travelodge or some such tulip.

Staying away is bad enough anyway and you only live once - what's the point in being able to set your own expenses policy otherwise! (Top tip, use your £5 a day for laundry and hand it in on Friday to be returned Monday!)

[johndc31]

Just checked Freeagent and so far my expenses (not incl salary/pension) are just under 6% of turnover. I travel daily into London on the train, 40 min journey so travel/subsistence is the biggest expense category.

I'd say that's really good! It seems if you're WFH your expenses are considerably less.

[adubya]

Just checked Freeagent and so far my expenses (not incl salary/pension) are just under 6% of turnover. I travel daily into London on the train, 40 min journey so travel/subsistence is the biggest expense category.

[malvolio]

As long as you are claiming only what you've spent and all expenses are genuinely "wholly and exclusively" for business purposes then nobody cares how much you spend.

Whether it is wise or foolish to be spending significant amounts of income on subsistence is a whole other question. I tend to the latter, but it's your money...

[johndc31]

Wow 50% expenses! Even when I was paying 1500+ notes a month for 1st class travel from Brum to Euston my expenses were less than 20% of turnover, saying that I have seen some tulip rates on offer in London so can see how that would add up.

But surely that depends on what rate you get paid per day? I've seen rates on here from £150 to £500 pd, but you're right, it is high which is why I'm going to have to negotiate hard on rates going forward when onsite.

[kolata]

That's what all our fine members of parliament say

indeed

[MrMarkyMark]

My projection is that I will be running at ~33% expenses this FY.
Any cause of concern? All are legit.

That's what all our fine members of parliament say








33

[northernladuk]

My projection is that I will be running at ~33% expenses this FY.
Any cause of concern? All are legit.

How on earth do we know if your expenses are legit? Doesn't concern me if that helps.

[LondonManc]

My projection is that I will be running at ~33% expenses this FY.
Any cause of concern? All are legit.

If you're accountant's not worried, I wouldn't worry if CUK folk GAS

[kolata]

My projection is that I will be running at ~33% expenses this FY.
Any cause of concern? All are legit.

[youngguy]

One should be on pretty low rate and one must be living a life of a sheikh to be able to muster expenses 50% of turnover. Can we have some figures here ? Or else I will assume something dodgy going on to avoid corp tax.

Unless you include £40k of pension pa.

500p/d is about 100k. If OP slowed 40k into pension then that's a further 10k for t and s type expenses.

Edit: ah just seen the OP didn't mention pension though! Wow, must be some lovely hotels 😀

[fullyautomatix]

One should be on pretty low rate and one must be living a life of a sheikh to be able to muster expenses 50% of turnover. Can we have some figures here ? Or else I will assume something dodgy going on to avoid corp tax.

[SlipTheJab]

Wow 50% expenses! Even when I was paying 1500+ notes a month for 1st class travel from Brum to Euston my expenses were less than 20% of turnover, saying that I have seen some tulip rates on offer in London so can see how that would add up.

[LondonManc]

Thanks for the input folks.

My new contract is 50 mile from home, so I'm hoping that by Christmas that percentage would have significantly dropped.

My London contract wasn't the best rate but by no means the worse, but it was my first gig, I just wanted to get things rolling.

To quote what my accountant said about FRS

"We would still expect the savings from this to outweigh the benefits of reclaiming the VAT on the standard rate, particularly as the vast majority of travel costs and a fair proportion of your accommodation costs would not have VAT applied (roomshare, small hotels). Furthermore whilst you can reclaim VAT on mileage, you can only claim this on the proportion of the mileage that relates to fuel (mileage is also designed to cover the other running costs and wear and tear costs of using your own vehicle for business purposes.)"

So at least I think FRS is still the way forward even though expenses are high.

That's correct. When I first set up my limited co, I discussed it with the accountant, who advised that unless you're regularly buying and selling, FRS is the right way to go in 99% of cases.

[johndc31]

Thanks for the input folks.

My new contract is 50 mile from home, so I'm hoping that by Christmas that percentage would have significantly dropped.

My London contract wasn't the best rate but by no means the worse, but it was my first gig, I just wanted to get things rolling.

To quote what my accountant said about FRS

"We would still expect the savings from this to outweigh the benefits of reclaiming the VAT on the standard rate, particularly as the vast majority of travel costs and a fair proportion of your accommodation costs would not have VAT applied (roomshare, small hotels). Furthermore whilst you can reclaim VAT on mileage, you can only claim this on the proportion of the mileage that relates to fuel (mileage is also designed to cover the other running costs and wear and tear costs of using your own vehicle for business purposes.)"

So at least I think FRS is still the way forward even though expenses are high.