Inside IR35 expenses

[PhilAtBFCA]

Inside IR35

chrisl

I think you are asking what can you deduct against the income in determining the deemed payment under IR35, thats actually a slightly different question.

This HMRc page gives you a good explanation of how to calculate a Deemed Payment. yes the 5% that you refer to and the great explanation on the Contractor Calculator link are correct.

This is different to what you company can put through its books for expenses. For instance in calculating your corporation tax , Accountancy Expenses are deductible, but they also form part of the 5% allowance in calculating the Deemed Payment.

I hope that helps a bit.

Phil

[centurian]

The 5% is to pay the expenses for running the company itself. It probably won't cost as much as 5%, in which case anything left can be taken as profits.

Out of the remaining 95%, you can then claim for any personal expenses that would be allowable if you had been an employee (generally travel and subsistence).

Training is a bit of an odd one, because mostly employers pay for this, but HMRC can be a bit fussy about this Ltd's.

[krytonsheep]

yep, expenses can be claimed in addition to the 5%. See here.

[NotAllThere]

You can't claim accountancy fees.

[LisaContractorUmbrella]

IR35 has no impact on whether or not you can claim expenses, only in the way that you receive payment i.e. inside = PAYE

[chrisl]

Can anyone confirm what expenses can be claimed when you are inside. I thought it was only a flat 5% but according to the below link, you can also claim other expenses ontop of the 5%.

The paragraph reads as:

'In addition to the 5% for administration costs, a contractor can also claim direct costs such as travel, computer costs, subsistence, direct training, sub contractors, etc. '

http://www.contractoruk.com/ir35/index.html