As a contractor what expenses can I claim from my limited company?
If you are working as a contractor through your own limited company there are a large number of costs that you are eligible to claim. The most common expenses are noted below:
- Staff costs such as salaries and pension contributions – these are likely to be for you, but perhaps also for your spouse if they carry out any work for the company
- Office equipment such as laptops, mobile phones, printers and furniture
- Software costs including accounting packages
- Telephone costs if the phone contract is in the name of the limited company
- Postage and stationery
- Training costs if directly related to your contract
- Public liability and employer’s liability insurance
- Subscriptions to professional organisations and societies if they appear on the following approved HMRC list-
- Cost of travel, subsistence and accommodation if working away from your normal place of work and the contract is for less than 24 months
- Any business miles travelled using your own vehicle can be reclaimed at 45p for the first 10,000 business miles and 25p thereafter. This does not include ordinary commuting
- Use of home as office – HMRC allow a claim of £4 per week, but a higher amount may be claimed if you rent part of your property to the company. Advice here is essential
- Accountancy fees
- Relocation expenses up to £8,000
- Advertising costs for your company including website costs, LinkedIn fees, social media promotion etc
- The cost of an annual event for your company like a Christmas party if the cost per head does not exceed £150 (including VAT)
- Trivial benefits of up to £50 if not paid as cash or a cash voucher. If you are the director of a close company (under the control of 5 or fewer shareholders) your trivial benefits are limited to £300 in a tax year
- The cost of business entertaining through your company can be paid by the company, but it will not be an allowable deduction for corporation tax
- Life insurance if it is a relevant life policy. This should be allowable for corporation tax and not treated as a benefit in kind, but you should always speak to your accountant before setting this up
- Private medical insurance can be paid by your company, but will be included on form P11D and taxed as a benefit in kind
- It should be possible to claim for any expenses incurred prior to trade commencing, but there are strict rules regarding this
If you think the IR35 changes will affect you, you should seek advice from your accountant as soon as possible. Our dedicated contractor team is always happy to help existing and new clients.
https://jsca.co.uk/specialisms/contractors-accountants/
Photo by Icons8 Team on Unsplash
