A Guide For Contractor S For Claiming Expenses.

A guide for contractor s for claiming expenses.

by

Matt Gray

Contractor s probably incur some expenses during the course of their contracts; you can simply pay for these, with your own money and then your company will reimburse you. For doing this, you just need to do either a bacs (Bankers Automated Clearing Services) transfer from your business bank account or write a cheque from your company bank account cheque book. For a more detailed explanation its best for contractor s to discuss it with accountants for contractors.

Expenses are not taxed, so if your contract is for example 20,000 a month and you did not have any expenses this month and you withdrew all the 20,000, you would pay tax on the full 20,000. However, if you had 1,000 of expenses, you now only pay tax on the 19,000 and pay less tax. Exactly it does not work like this, as it does not include the affect of your PAYE (Pay as You Earn) salary, dividends or even the flat rate VAT scheme, but hopefully it will give you a basic understanding of how expenses affect your tax bill. You must be able to show the evidence of the expenses that actually incurred; this is usually achieved by keeping the receipts.

What expenses can a contractor claim working through his limited company?

HM Revenue and customs have introduced a heavyweight 100 page guide. Here s a little easy guide for you. If you are an interim manager, then accountants for interim managers can give you a wealth of information and advice.

Life is very simple if you are a contractor working through your own limited company and are outside IR35. HM Revenue and customs rules state that expenses can be claimed, provided they are exclusively for the purposes of your business. You can claim things like company formation fees, business travel and accommodation, postage, telephone calls, subscriptions, insurance, business entertainment and many more.

Valid Business expenses:

-Meal expenses: You can claim actual meal costs while you are working at a remote site, away from your normal place of work, or when staying away from home overnight, but daily claims for meals are not permitted.

-Travel expenses: You can claim the cost of travel to your temporary place of work. Parking fines and speeding fines are not included whereas parking and congestion charges, you can claim. For claiming the cost of travel by public transport you need to have a valid receipt.

-Accommodation: The cost of hotel or bed and breakfast accommodation can be claimed as an expense, and reasonable cost of additional meals taken in conjunction with overnight accommodation can also be taken. There are no set allowances for accommodation, but the cost must be reasonable for both.

-Pensions: These are big news as they; represent one of the few remaining tax breaks available to contractors. You can invest a part of your income into company pension scheme.

-Training: It is wholly and totally relevant to the performance of your duties under your existing contract, and then you can claim this as an expense.

There are various other means of accounting that have been introduced like cloud accounting system. It will help your business work faster and in a smarter way.

Accounting has become so easy now, you can switch to easy ways of accounting now, i.e. Online accounting, through which all your transactions would be done online itself and your data would be absolutely secured.

whether you are in IT contracting or any other field, Clear Accounts

accountants for contractors

have years of experience, they can make it simple to reclaim everything contractors are entitled to.

Article Source:

ArticleRich.com