Reply to: Subsistence - do I need receipts?

[Ardesco]

Prosecution: "Me'lud, the prosecution belives that the defendant was claiming £3 a day for the past 7 years that he was not entitled to claim and he has no receipts to back it up."

Defendant: "but I thought I could...."

Judge: "Guilty as sin!!!!!"

[pisces]

I thought meal expenses was £3 per day

[Bluebird]

I thiught the HMRC take on lunch was that it doesn't matter where you live or work you need lunch therefore it's a personal expense that cannot be off-set against tax.

Evening meal is different in that if your job takes you away from home you can claim re-imbursement of expenses that "would not normally be incurred "

[dmini]

Don't forget that they can also do you for fraud which can result in a jail term of up to 15 years...

Most seasoned contractors I know don't even bother with subsistence because they earn enough that a couple of quid per day doesn't really matter and 95% of the time you never use it anyway.

I agree - I'm claiming at the moment cos I am away from home during the week, but once I get back to working closer to home, I generally won't claim lunch or anything - I take food from home which is far cheaper!

[Ardesco]

Don't forget that they can also do you for fraud which can result in a jail term of up to 15 years...

Most seasoned contractors I know don't even bother with subsistence because they earn enough that a couple of quid per day doesn't really matter and 95% of the time you never use it anyway.

[dmini]

Those "expenses" are one of the reasons Gordon is clamping down - and you should have had an email from Giant telling you that you can claim nowt after April - unless you move to one of their "limited companies" specially set up for you.
Most seasoned contractors I know keep receipts. Put it like this, if you claim 7.5k expenses (£15 a day) & mileage etc for each year, and cannot prove it if investigated, then you could be done literally for thousands in back tax. HMRC will go back 5 or 6 years! If say you were on 40% tax band that would be 4k tax on your expenses alone - not taking into account mileage you can't prove. I wouldn't want to end up with a tax bill of 30k. Do you want to take that risk?
The way I look at it- what a permie employer would have allowed in expenses back in the olden days - that is what is generally allowable. A number of people here have had hmrc investigations, and can confirm that, I think. There are a few perks which are extra - most have been discussed recently in other threads on here.

[kirk]

ehrm... i dunno. so far i am with giant and they asking for receipts. their allowance is 15 per day if you are out for 10hrs+.... I assumed it is the same for own Ltd...

btw - I asked few more guys. Noone keeps receipts. They say - we dont give a monkey. Probably you will get screwed if you get investigated. but we found it to be unlikely event.

so general attitude amongst seasoned contractors I met so far - take as much as you can and if you get caught pay it later.. if else....

hmmmm.... I might like it.

I only wish I had that confidence; I don't think I could sleep at night

[maxima]

ehrm... i dunno. so far i am with giant and they asking for receipts. their allowance is 15 per day if you are out for 10hrs+.... I assumed it is the same for own Ltd...

btw - I asked few more guys. Noone keeps receipts. They say - we dont give a monkey. Probably you will get screwed if you get investigated. but we found it to be unlikely event.

so general attitude amongst seasoned contractors I met so far - take as much as you can and if you get caught pay it later.. if else....

hmmmm.... I might like it.

[MarillionFan]

No you dont need any. Plus it's £25 per day.

[Crossroads]

If I run my own Ltd and a contract is outside IR35...

Do I need receipts for every food/drink I bought during work hours and commuting?

Or I can claim automatically 15 pound a day (if 10hr out of home).

Look at this a different way:
1. Are you invoicing the customer for these expenses? What will they allow, ad what do they want to see?
2. You can claim whatever your employer (in this case, YOU) says you can.

However, if you are planning on offsetting these against Corp Tax then what is allowable - i.e. a justifiable business expense, and how can you prove you actually spent they money?

[maxima]

Of course the accountant will say that. He gets more money the more you get investigated.

Crazy.. I was suspecting something like that.

[tim123]

Ok. I understand the point. It might be sensible to ask ones to prove expenses.

But why I asked - I work along with local guy who is contractor for a while. He is very happy with his accountant (some partnership in North London). He said - the guy who actually care about his accounts is also auditor. He assured that this guy is perfectly aware of how to avoid most of IR35 threats.

But when we were buying lunch I asked for receipt and he (the contractor not accountant) didnt. I asked - why dont u need receipt. He said - I dont need it, I can claim up to the daily limit. I asked - did your accountant told you so. He said - yes.

The real question for me is - shall I run off such accountant?

let me guess.

Mike Saunders

tim

[Sockpuppet]

Of course the accountant will say that. He gets more money the more you get investigated.

[boredsenseless]

Ok. I understand the point. It might be sensible to ask ones to prove expenses.

But why I asked - I work along with local guy who is contractor for a while. He is very happy with his accountant (some partnership in North London). He said - the guy who actually care about his accounts is also auditor. He assured that this guy is perfectly aware of how to avoid most of IR35 threats.

But when we were buying lunch I asked for receipt and he (the contractor not accountant) didnt. I asked - why dont u need receipt. He said - I dont need it, I can claim up to the daily limit. I asked - did your accountant told you so. He said - yes.

The real question for me is - shall I run off such accountant?

Okay, now firstly let me say that I understamd the need for and indeed even use an accountant.

However the consistent view on here is that my accountant said it was okay so I do it.

Let me remind you that accountants are experts in their field but they don't know everything and the interpret things differently from one to the next.

Ask for help but have the brains to evaluate their answers rather than just blindly acting on what you are told. remember if the sh1t hits the fan you are the one in the dock the accountant is protected unless they have been negligent.

So next time you here the phrase its okay an accountant said remember :

a) they are probably right
b) have you understood what they said enough to agree with their ideas.

Once again this is not meant as a slight on any accountant more a slight on the contractor midset that they can abdicate all responsibility to a third party

[maxima]

Ok. I understand the point. It might be sensible to ask ones to prove expenses.

But why I asked - I work along with local guy who is contractor for a while. He is very happy with his accountant (some partnership in North London). He said - the guy who actually care about his accounts is also auditor. He assured that this guy is perfectly aware of how to avoid most of IR35 threats.

But when we were buying lunch I asked for receipt and he (the contractor not accountant) didnt. I asked - why dont u need receipt. He said - I dont need it, I can claim up to the daily limit. I asked - did your accountant told you so. He said - yes.

The real question for me is - shall I run off such accountant?