IMPORTANT<\/strong>: Paying for expenses using a Company credit\/charge card. IMPORTANT: <\/strong>Invoices and receipts All travel and subsistence expenses for journeys you have to make in carrying out the duties of your employment, or in travelling to a temporary workplace from home, or attending work related training can be claimed as a business expense.<\/p>\n\n\n\n A temporary workplace is one where you undertake work for a limited duration, or for a temporary purpose. If from the outset of your contract you do not expect to be at your clients workplace for more than 24 months, then all travel costs from your home to the temporary workplace can be claimed. Conversely, once you know your contract will run for 24 months or more<\/strong>, no travel expenses can be claimed at all. If you undertake a series for contracts at different temporary workplaces that all involve substantially the same commute, then you should treat these all as the same workplace for the purposes of applying the 24 month rule. In addition to this, is the 40% test: if you spend (or expect to spend) \u226540% <\/strong>of your working time at a location for a period that lasts (or is likely to last) more than 24 months, it becomes a permanent workplace and travel to it is ordinary commuting (not allowable).<\/p>\n\n\n\n Where the worker is under supervision, direction or control (or IR35 applies), tax relief for travel to the client\u2019s normal workplace is blocked (ordinary commuting) from 6 April 2016. This applies to PSCs caught by the employment\u2011intermediaries rules. Public Transport<\/em><\/p>\n\n\n\n Tube, rail, or bus travel costs are all claimable as business travel expenses. Be sure to keep all your receipts.<\/p>\n\n\n\n Mileage Allowances<\/em><\/p>\n\n\n\n If you use your own vehicle for business travel you can claim a \u2018Mileage Allowance\u2019 (as per the table below) for business mileage. You can also claim for parking and congestion charges but you may not claim for parking fines or speeding fines.<\/p>\n\n\n\n The current approved mileage rates are;<\/p>\n\n\n\n NOTE: You need to keep a record of the date of each journey, its purpose, total miles, and mileage allowance claimed.<\/em><\/p>\n\n\n\n Subsistence Staying Away Overnight **Exemption applies only to employer-paid amounts.<\/p>\n\n\n\n In addition to these costs, you can claim the full cost of accommodation, meals and travel associated with your stay away from home.<\/p>\n\n\n\n You may claim from your business the actual cost of entertaining business contacts on a business occasion, where a representative from an outside organisation is present, provided you do not meet the costs of entertaining relatives, partners, or friends. Note that business entertainment is not tax deductible, and will be disregarded when calculating the taxable profit of your company.<\/p>\n\n\n\n Important \u00ad<\/strong>\u2013 If you are having a business or marketing meeting with the purpose of increasing the company\u2019s income, this cost will be tax deductible. You will need to produce minutes of the meeting held, and enter the expense as business meeting\/marketing.<\/p>\n\n\n\n A Xmas party (or any annual event) is tax deductible for the company provided certain criteria are met. Importantly, the total cost of the event must not<\/strong> exceed \u00a3150 per head (including VAT).<\/p>\n\n\n\n Important: VAT Restrictions<\/strong> While this expense is deductible for Corporation Tax, the VAT rules differ significantly:<\/p>\n\n\n\n How to record this:<\/strong> Please clearly distinguish the expense from other meals when loading the claim. Do not load as “Business Entertainment” (which is essentially for clients). Instead, use “Staff Related Costs<\/strong>,” and remember to restrict the VAT claim as per the rules above.<\/p>\n\n\n\n Legislation was introduced in Finance Bill 2016 to provide a statutory exemption from tax for qualifying trivial benefits in kind costing \u00a350 or less. There is an annual (5 April to 6 April) cap of \u00a3300 for directors and other office holders of close companies and members of their families and households who are also employees of the company. Revenue guidance states that bicycles loaned to employees by their employer are exempt from a benefit in kind charge. For bicycles there is no financial limit but the cycle must be used mainly for home to work travel.<\/em><\/p>\n\n\n\n For computers, the primary purpose of providing the computer must be work related. Ensure you issue a company policy\/memo stating that any new computer equipment provided to employees is done so primarily for business use.<\/strong> The computer, and associated software and ancillary devices, can be claimed. To help you comply with this, we can supply you with a \u201cHome Working and Private Use Policy\u201d for your company \u2013 please just ask for one.<\/p>\n\n\n\n The provision of a company mobile phone to you is fully tax deductible for the company, and exempt from any personal tax charge for you, so long as that mobile phone is under your company name, and paid for directly from your company bank account.<\/em> There are 3 options available to claim home office costs:<\/p>\n\n\n\n Option 1: Option 2: You CANNOT claim; Option 3: Note: you will need to be able to show how you calculated the home office claims \u2013 ie you will need to keep your bills and a record of how you worked out the expense portion claim.<\/p>\n\n\n\n Example 1 The following home office costs can be claimed;
If you have a company charge\/credit card, it is very important you adhere to the following;<\/p>\n\n\n\n\n
All business expenses\/purchases, whether paid for directly out of your business bank account or paid for personally, should have a receipt\/invoice, where possible, with your limited company name on it.
In exceptional circumstances where a receipt is not available, a note should be written with date, description, amount, and reason for purchase.
These receipts should be kept for a period of 6 years for tax purposes. You do not need to send them on to No Worries, and should keep them safely.
IMPORTANT: <\/strong>Claiming VAT on expenses
You can usually reclaim the VAT paid on goods and services purchased for use in your business, BUT it is important not to assume the VAT on expenses. Your VAT receipt or invoice needs to show the net and VAT amounts separately. Please ask for additional guidance, if you are standard rate registered and want to claim VAT back on expenses.<\/p>\n\n\n\n1: Travel and Subsistence Expenses<\/h2>\n\n\n\n
LONDON: <\/em><\/strong>Oyster top-up cards should be avoided as it can be difficult to determine whether the Travel is business-related. If you do use an Oyster top-up card, you must only claim the full cost of each top-up if the card is used exclusively for business. If you use your Oyster top-up card for business and personal use, then you must claim only the cost of each business related journey by using the Oyster itemised billing facility. Travel cards are preferred as the Travel Zone and dates are recorded on each Travel card, and you can claim the full cost of the Travel card so long as its primary purpose is business travel. <\/em><\/p>\n\n\n\n![\"\"](\"https:\/\/guide.no-worries.co.uk\/wp-content\/uploads\/2021\/02\/Mileage.png\")
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<\/strong>You can claim for the cost of one meal when you travel to a remote site, or are working away from your normal place of work. You can also claim an additional meal if you have an unusual early start or late end to a day, on occasion \u2013 this should be outside of your standing working hours. We suggest you always claim the actual cost of the meal you have incurred, however if you legitimately have an onerous amount of subsistence claims to process, then you can use the HMRC benchmark scale rates to claim an allowance for your meals. There are very specific rules on this, and if you think this may apply to you please contact us.<\/p>\n\n\n\n
<\/strong>When staying away overnight on business, you may spend money on items such as private phone calls, laundry and newspapers. These are not individually claimable expenses, but you are entitled to relief to cover these costs up to the following rates:<\/p>\n\n\n\n\n
2: Entertainment <\/h2>\n\n\n\n
3: Annual event\/Xmas party <\/h2>\n\n\n\n
\n
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4: Trivial Benefit in Kind <\/h2>\n\n\n\n
No cash or cash vouchers are allowed, but gift vouchers e.g. for a shop, are allowed.
Please contact your account manager for further information on conditions of exemption and procedures to follow.<\/p>\n\n\n\n5: Employer Provided Computers & Bicycles<\/h2>\n\n\n\n
6: Telephones<\/h2>\n\n\n\n
NOTE: Mobile phone top up accounts are not allowable, A CONTRACT IS REQUIRED.
<\/strong>Internet and telephone connection costs in the employee\u2019s home are generally NOT allowable unless these costs are solely for the purpose of enabling you to carry out the duties of the employment at home,<\/em> and the private use is not significant compared with work use. Any telephone or Internet bills should be in the name of your company.<\/em><\/p>\n\n\n\n7: Home Office Expenses<\/h2>\n\n\n\n
<\/strong>The easiest way to claim for home office costs is to use the HMRC working from home rate of \u00a326 per month (or \u00a36 a week). No receipts or records are required to demonstrate the additional costs that result from working from home.<\/p>\n\n\n\n
<\/strong>If you need to work from home, and are not happy with the rate you can expense from Option 1, then you can claim a proportion of your working from home costs. These costs include;
Light and heat * Calls made on your home telephone * Insurance, if there is business equipment insured under that policy * Repairs if incurred on business equipment * A proportion (or all) of ISP\/broadband costs * A proportion of the cleaning costs of your workspace.<\/p>\n\n\n\n
Mortgage interest or rent * Water rates * Council tax * Expenses that do not have receipts (ie cash wages of a cleaner) * Repairs or re-decoration of home office<\/p>\n\n\n\n
<\/strong>If your company is based at home, or you perform a substantial amount of your fee earning duties as a director or as a company employee from your home (ie not company administration but actual fee earning work for your company) you may consider formalising a license agreement with your company in order to allow it to occupy part of your property in return for a rent and service charge. Most commonly, this cost allocation is done by apportioning the costs based on the total number of rooms in your house\/flat (excluding kitchen and bathroom).<\/p>\n\n\n\n
<\/em>Pete and his girlfriend live in a two bedroom flat. One of the bedrooms is dedicated to Pete\u2019s home office for his company under a non-exclusive license. The proportion of the rent that can be claimed as business-related expenses is 1 (the spare room) divided by 3 (two bedrooms and a lounge \u2013 kitchen and bathroom are excluded from the calculation) \u2013 which gives 33.3%. This apportionment is also used for gas, electricity, and council tax costs, and Pete estimates he used his broadband 50% of the time for work, so also claims this as a cost.<\/p>\n\n\n\n
Light and heat * Telephone (apportion line rental and calls on non-dedicated phone) * Insurance * Capital allowances on own business equipment * Capital allowances on costs of business shelving erected for the office * ISP costs, apportioned if there is any private use * Cleaning * Rent or Mortgage Interest * Council tax * Water rates * Repairs or re-decoration of home office <\/p>\n\n\n\n