Will contracting go out with a bang or a whimper?

[LondonManc]

If you live away from home during the week, then you should be able to claim travel and stay (hotel/room rent). I wouldn't expect to be able to claim daily travel on top of that.

I'd personally say that you can EITHER claim daily commute OR claim accommodation and cost of getting to and from accommodation.

Also, claiming subsistence is garbage; unless you're on hunger strike when you work from home.

It's quite the moot point if we all end up inside IR35 though.

I must admit, if we're found to be inside IR35, I'd probably end up going through an umbrella and staying contracting. I enjoy the project-based work but cannot be mithered with the hassle for what is probably going to be a minimal difference in bottom line profit.

[b0redom]

Does this mean that there'll be a massive BOOM between now and end of March as contractors buy a load of assets like laptops, bikes etc which are legitimate expenses, use for a bit and then sell to themselves at a hefty discount as they close down their firms?

[jamesbrown]

Does this mean that there'll be a massive BOOM between now and end of March as contractors buy a load of assets like laptops, bikes etc which are legitimate expenses, use for a bit and then sell to themselves at a hefty discount as they close down their firms?

Unless an asset is "ordinary commuting", I'd say no, probably not. I suppose you could buy a lifetime, universal, rail ticket for corporate travel before the new rules kick in

[PurpleGorilla]

This is what it means...

Employee based in London is sent to Manchester office for 3 months and has expenses paid by the business

Ltd company employee/consultant/scum/whatever based in London works at client site in Manchester for 3 months and can claim no expenses but pays for costs out of own personal pay packet.

Employee has sick, holiday, parental, grievance, pension, etc etc

Ltd co entrepreneur gets none of that unless they pay for it out the business. Which also pays accountant, insurance, business overheads etc

[b0redom]

Unless an asset is "ordinary commuting", I'd say no, probably not. I suppose you could buy a lifetime, universal, rail ticket for corporate travel before the new rules kick in

I'm assuming a bunch of contractors will move inside IR35 here. Inside IR35=5% as expenses. 5% isn't a great amount for gadgetary per year.

[jamesbrown]

I'm assuming a bunch of contractors will move inside IR35 here. Inside IR35=5% as expenses. 5% isn't a great amount for gadgetary per year.

Possibly, but that is more than a year away and, more importantly, the 5% allowance is for administration specifically, not other legitimate expenses, which are still allowable outside of the 5%. The T&S changes would be implemented in the next finance bill, i.e. April 2016. However, in one of the technical documents that accompanied the summer budget, the timetable for any IR35 revision was mooted as a later finance bill, i.e. April 2017.

[fidot]

Comparing a freelancer's travel expenses with those of a generic permanent employee is comparing apples with oranges. The comparison that should be made is with the employees of the big consultancy firms, who, if I understand correctly, are somehow miraculously out of scope of this legislation.

[PurpleGorilla]

Comparing a freelancer's travel expenses with those of a generic permanent employee is comparing apples with oranges. The comparison that should be made is with the employees of the big consultancy firms, who, if I understand correctly, are somehow miraculously out of scope of this legislation.

Once again in that scenario the risk taker, entrepreneur, and independent businessman (a.k.a. The Ltd Co Contractor) loses out.

[LondonManc]

Comparing a freelancer's travel expenses with those of a generic permanent employee is comparing apples with oranges. The comparison that should be made is with the employees of the big consultancy firms, who, if I understand correctly, are somehow miraculously out of scope of this legislation.

Again, a less than ideal comparison. Those employees/consultants are afforded sick pay, paid leave, pension, bonuses, maternity/paternity leave, fully-reimbursed expenses, etc.

Keep it simple.

Can claim:
1 Travel from normal residential address to place of work
2 Accommodation when staying away from residential address for purpose of work
3 Travel to and from above accommodation

So, either item 1 or items 2 & 3 accordingly.

Cannot claim:
Subsistence
Daily commute if claiming for accommodation

Of course, this all changes if we're all inside IR35. Having read the other article, it looks like umbrella companies will be dead if it goes through, so sole trader with higher insurance may be an option that would need looking into. Or window-cleaning.

[jamesbrown]

An international parallel, of sorts, for anyone interested (although heading in the opposite direction).