Travel Expenses for contractors

[bunman]

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I will be in same situation, what does this actually mean financially that one can expense travel?

It means you get paid that money back tax free, but that comes out of your income. In the final analysis, what this means is if you're paying 40% tax, you pay for 60% of the expense.

]


I will be in same situation, what does this actually mean financially that one can expense travel?

It means you get paid that money back tax free, but that comes out of your income. In the final analysis, what this means is if you're paying 40% tax, you pay for 60% of the expense.

Not strictly true with an umbrella company.

A chunk of your money will go in income tax anything offset against this is all ok.

A basic example

So say you earn £1,500+ gross a week and say £500 goes to in income tax (I have not worked it out just an example) so you are left with £1,000 net.

So any expenses like travel are taken out of the income tax amount first.

I get my accommodation paid for too.

My home town is derby but most of my adult life for 10+ years contracting in London/South East. Now I am with an umbrella it is easier for me.

I (say I) live in Derby and get all travel and/or accommodation paid more in London out of the income tax fund. So I get hotel room or rented accommodation for the duration of my contract as well as travel.

If you in are an umbrella you should try and us up as much as you can of the money that would go to the tax man. I have very little going to the taxman.

If I am to rent in London anyway it is the easier option to have my official place of residence not in London and say I travel down to the location and get the accommodation paid.

So I rent a cheap place in Derby for little rent and get the expensive London rent paid for.

To be fair I have been travelling through the country contracting in recent years but the principle is the same. I have yet to see what happens if say I get work in Brighton and say I will live in London and travel down as from there getting it all paid for but I presume that is all ok as well.

Probably too much work to do when you have a limited company but for an umbrella it is make more sense and all above board.

Hope it helps

So say you earn £1,500+ gross a week and say £500 goes to in income tax (I have not worked it out just an example) so you are left with £1,000 net.

So any expenses like travel are taken out of the income tax amount first.

I get my accommodation paid for too.

My home town is derby but most of my adult life for 10+ years contracting in London/South East. Now I am with an umbrella it is easier for me.

I (say I) live in Derby and get all travel and/or accommodation paid more in London out of the income tax fund. So I get hotel room or rented accommodation for the duration of my contract as well as travel.

If you in a umbrella you should try and us up as much as you can of the money that would go to the tax man. I have very little going to the taxman.

If I am to rent in london anyway it is the easier option to have my official place of residence not in london and say I travel down to the location and et the accommodation paid.

So I rent a cheap place in Derby for little rent and get the expensive london rent paid for.

To be fair I have been travelling through the country contracting years a but the principle is teh same.

[E11esar]

Thank you

Hi again.

Thank you for the information This will be my first contract since the whole IR35 situation began, so the rules are all so different now.

[Sockpuppet]

I am not sure, but isn't there some VAT added if you pay by credit card?

Could be VAT on the booking free (vat on all 50p of it).

[Ardesco]

You can't change VAT status depending on payment method. It is either VATable or not.

[richard-af]

No VAT on train tickets. There is on parking in thier car parks though!!!

I am not sure, but isn't there some VAT added if you pay by credit card?

[Ardesco]

No VAT on train tickets. There is on parking in thier car parks though!!!

[G8_Summit]

Cheers, i think i understand.
i best keep all receipts.

On this subject, is rail fare VATable ?? Receipts I get for my train tickets do not have VAT mentioned ???

[reddeagle]

It means you get paid that money back tax free, but that comes out of your income. In the final analysis, what this means is if you're paying 40% tax, you pay for 60% of the expense.

Cheers, i think i understand.
i best keep all receipts.

[VectraMan]

]I will be in same situation, what does this actually mean financially that one can expense travel?

It means you get paid that money back tax free, but that comes out of your income. In the final analysis, what this means is if you're paying 40% tax, you pay for 60% of the expense.

[Gonzo]

Sigh. I have no idea how this applies to Umbrella companies, so there may be more considerations.

Do not consider travelling to a client site as "travelling to work". It is travelling to a temporary work place as opposed to your regular work place. There are detailed examples (note that in the usual HMRC unhelpful way there are not detailed rules) on the HMRC website of what is involved here.

[reddeagle]

you certainly can ! any expenses incurred wholly in relation to the business can be claimed.

]


I will be in same situation, what does this actually mean financially that one can expense travel?

[kirk]

you certainly can ! any expenses incurred wholly in relation to the business can be claimed.

[E11esar]

Hi there.

I am getting a lot of conflicting information regarding travel expenses while contracting.

If I am travelling by train (return) from Bristol to London to my respective contracted place of work, can I claim these travel expenses? There will be no additional travel incurred during my normal working day.

I am planning to be administered under an umbrella company.

Thank you



Further reading note from Admin: Contractor Travel Expenses