What can you claim for on expenses

Mobile ?
internet ?
PC ?

travel ?

etc??

Does anyone have a list of what you can and can't claim for ?

 

Are you inside or outside of IR35, cause if you are caught by IR35 then its basically just travel, and then 5% for all other expenses.

IF you are outside IR35 then you can claim for all the above and more.

you really need to find out the IR35 thing first though.

 

What do you mean inside or outside ?

 

IR35 is a tax law that basically describes certain contractors as "disguised employees"

If you get hit by it then you are going to have to pay a LOT of tax, including both lots of national insurance (employers and employees) but if you are outside it then you can pay yourself a lot of the money in dividends and completely aboid NI on the bulk of the money.
Also if you are outside it there is no cap on what you can expense, anything that is a potential business expense is valid, but if you are caught by it35 they put a cap of 5% on it, you cant even claim above that for stuff like training courses.

If you are looking for a good accountant and are outside of it, i can really strongly recomend the guys and gals over at http://www.lowtax.co.uk

 

http://www.inlandrevenue.gov.uk/ir35/

 

IR35....whatta bitch. Unfortunately I am affected and having been paying it for a good couple of years now.

 

IR35 sucks... main reason i never went contracting!

 

yup gave up contracting becase of ir35

gone are they days when you could claim for everything and make a tidy packet

 

Im sure Cola will be on at lunch. She'll be able to tell you all of what you can/cant claim being the seasoned contractor that she is

 

ir35 EKKKK!

I was going to talk to you about this last night chip... but I forgot!

alex

 

LOL, oh well alex, you'll have to buy me a pint next week and we'll chat about it then instead.

Or give me a ring if you like.

It does make a big difference being in or out, you really cant underestimate the effects of it, like for example, 5 years ago i was contracting for Toyota doing consultancy, i was paid 60 an hour, and so was another guy i worked with.
We both made in the region of 120K in year 2000 before tax, i paid less than 15K in tax, he paid over 50K

MASSIVE difference.



Chip

 

What defines if you are in out...

I keep hearing the term single source...?

Alex

 

Single source certainly isnt going to help your case.

TBH alex from what i know of your current job, its blatantly employment whatever way you look at it.

In order to get outside of IR35, i insisted on the following conditions:

I could send another employee of my company instead of me if they were suffiecently experienced (highly unlikely id ever have such an employee of course as there were only a few people in the country at the time with similar experience, but the clause was still there)

I worked whatever hours i wanted, they had no say over when i worked

I had the choice with each project if I accepted it or not, they didnt have cart blanche to assign me work

I was allowed to work wherever i wanted, so at their office, at my office or anywhere else i saw fit, in fact i exercised that contract a few times including doing chargeable work while i was on holiday in america

I had to provide certain equipment needed in my role, thus requiring an investment that would not be expected of a "normal employee"

 

Ok a few more questions!

"I could send another employee of my company instead of me if they were suffiecently experienced (highly unlikely id ever have such an employee of course as there were only a few people in the country at the time with similar experience, but the clause was still there)"

I have that clause... but have never used it.

"I worked whatever hours i wanted, they had no say over when i worked"

How do you define this? I can say they have no say... but is my word enough?

"I had the choice with each project if I accepted it or not, they didnt have cart blanche to assign me work"

hmmm each project? This means each bit of your job I suppose, what about on-going work or long term projects?

"I was allowed to work wherever i wanted, so at their office, at my office or anywhere else i saw fit, in fact i exercised that contract a few times including doing chargeable work while i was on holiday in america"

I can do this, but not all the time, for example I HAVE to provide face-to-face training at BMWs facility, but when not face-to-face I can (and do) work from home.

"I had to provide certain equipment needed in my role, thus requiring an investment that would not be expected of a "normal employee""

BUGGER - they provided everything I need from handouts to projectors!



HMMM!!!


Wheres my rock to hide under?

Alex

 

Alex, just having freedom to control your hours, place of work and send a substitute may be enough, but i suspect you may have to go to court to argue it.

The inland revenue has a bad record with cases like this, they normally lose, but do you have the bottle to try?

 

Dingle, everyone seems to have covered it pretty well. It depends what you wanna do. If you contract yourself and sort all your own tax forms etc you can claim for pretty much anything. I have a list I can send you.

Actually no.. cos how over how many friggin years have I told you you should contract?! See... I AM ALWAYS RIGHT

But, if you can't be arsed with all that I have an accountants called RMS Consultancy. They pay you like a permie and do all the tax fiddles for you, so there won't ever be any comeback.

 

Actaully using an umbrella company its still YOU that is legally liable if they tax you as if you are outside of IR35 but then are deemed to be caught by it.

 

Chip - it's not an umbrella.

 

If they are paying you and other contractors in PAYE then they are functioning as an umbrella company.

Either way, its STILL you that is liable, whatever way its done.

 

Alrighty, I know nothing...

Despite contracting for eleven years lol

 

It doesnt matter how long you have been contracting, its still you thats liable to repay if there is a mistake with your tax.

If you were a permy who had worked stacking shelves for tesco for 40 years and never had another job and they made a mistake with your tax it would STILL be you that had to repay it.

 

There is such a thing as insurance

 

Yep, if you are going to try and stay outside IR35 its worth looking into insurance against investigation.

That STILL wont cover the actual tax you have to repay though, it will only cover accountancy and legal fees during the investigation.

 

in the presence of the all knowing chip

 

Fook me, you and try help someone and get the piss taken out of you for it!

 

www.abbeytax.com

but it depends on the EXACT wording of your contract and the work you are doing!

alex

 

Or you could use these guys http://www.connexion.lu

and just let them pay you a small percentage of what you really earn in the UK,
and let the rest be deposited on a luxembourg account.

Don't know if they still actually do that, but it is completely legal, as you CAN declare that money if you like

 

thats an umbrella... and the inland revenue know EXACTLY how to get you through them!

alex

 

Chip, I too am trying to help. I also wonder what the point is.

I won't post again, I'll speak to Dingle instead.