Reply to: Per Diem as an expense?

[vwdan]

Not relevant here though? I'm talking about impacts of not claiming this as expenses on corp tax, so it's 20%.

nothing to do with dividend rates.

But if it's an expense, then that means you've paid for it out of pocket. So, unless you claim it back, you're paying personal tax on top of that. So, 20% corp tax and then whatever percent personal tax. Plus VAT if applicable.

[Alan @ BroomeAffinity]

It is relevant. You'll be withdrawing it one way or the other won't you? Either as expenses or as dividend.

[genius]

Not relevant here though? I'm talking about impacts of not claiming this as expenses on corp tax, so it's 20%.

nothing to do with dividend rates.

[Louisa@AardvarkAccounting]

i dont make more than 300k a year no

I think he meant personally... Assuming a normal personal allowance of £11,000 and the current basic rate band of £32,000 - if your personal income exceeds £43,000 then you'd be a higher rate taxpayer.

[genius]

Not a higher rate taxpayer then?

i dont make more than 300k a year no

[northernladuk]

WB!! Where have you been Alan? We've missed you....

[Alan @ BroomeAffinity]

Who cares though? We're talking peanuts. I've lost probably £700 by not keeping receipts.

I've lost more speaking to you. My time is precious,

Not a higher rate taxpayer then?

[SueEllen]

I havent kept a single receipt all year so I'm ****ed.

Doesnt really matter I guess.. I had about 4k I was going to declare as expenses but I'll just forget it.

Not necessarily.

If you paid by card and have a transaction for it on a statement you still have proof you incurred the expense.

[genius]

Wow... just wow...

But dunno why I'm surprised. I miss the days we could suggest people were sockie trolls.

Who cares though? We're talking peanuts. I've lost probably £700 by not keeping receipts.

I've lost more speaking to you. My time is precious,

[northernladuk]

I havent kept a single receipt all year so I'm ****ed.

Doesnt really matter I guess.. I had about 4k I was going to declare as expenses but I'll just forget it.

Wow... just wow...

But dunno why I'm surprised. I miss the days we could suggest people were sockie trolls.

[genius]

I havent kept a single receipt all year so I'm ****ed.

Doesnt really matter I guess.. I had about 4k I was going to declare as expenses but I'll just forget it.

[northernladuk]

So i know what my corp tax is going to be?

Well its your business but many times I've seen people doing this it's so they can divi everything out and the Corp tax can be paid by the last few months of income which is obviously extremely risky and wrong.

Get yourself Freeagent and it's all there in front of you. Do a few months see how much is owing and then x12 to get a pretty close estimate.

Just asking as the first question didn't inspire much confidence.

[TheCyclingProgrammer]

I'm working in the EU (outside UK) so I am in staying in a hotel. Every day I am on site I invoice the £40 per diem.

So I assume I can do breakfast + late meal so £20 / day.

IIRC you need to have a dispensation to use scale rates so you might want to check that.

Just keep receipts for any meals incurred whilst working on-site including an evening meal if you stay overnight and claim those.

Assuming the £40/day your client lets you bill them for is just to cover expenses in addition to your hotel costs, then all you need to know is that as long as your actual costs incurred and claimed back from YourCo are less than £40/day, you will be making a net profit on the per diem rate.

[genius]

Surely that's up to you to make an estimate on how you are going to manage yourself. Lobster dinner everyday or tuna sandwich from the supermarket?

And why are you trying to determine profit? Just the feel.good factor to see how rich you are of for some divi planning exercise?

So i know what my corp tax is going to be?

[CoolCat]

Big companies can agree a per diem rate with HMRC, per location, as an agreed per day rate for employees staying away at one location.

The thing is the HMRC would want something like 3 months receipted living to establish what realistic prices were. So the staff sent out first were obliged to collect receipts for everything, and (encouraged by the company) spend as much as they reasonably could, so that the bills were fairly high and this would enable a higher per diem rate to be agreed with the revenue. Seen it done for all costs hotels, meals, etc. (the higher the untaxed "per diem" the less taxed "overseas allowance" they would have to pay to get people to work there)

Of course as soon as the HMRC formally agreed the per diem rate everyone on site would instantly move into cheaper digs and start pocketing the difference. That's the way it works, and is part of the perks of staying away (especially abroad) long term.

I am sure such companies just pay their contractors the same per diem rate as their perm staff get, makes it easier on the admin. But of course you own limited wont have established the deal with HMRC, so you need to receipt everything you claim tax free.

I suppose you could talk to HMRC and talk about establishing an agreed per diem rate if you are going to be somewhere a long time, not sure how much admin is involved in setting this up though.

There used to be a mechanism for getting legit expenses (like gardening) of your home address pad tax free, if you were going to be abroad long term, as you wouldn't be there and able to do it. Don't remember the details.