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Allowable expenses for an IT Contractor

Allowable expenses for an IT Contractor

Hi All,

What kind of expenses are allowable for an IT contractor that is staying outside the scope of ir35? Are there any links on the net to help guide me on this?

It gets a little shady when we start to talk about travel and subsistence, client entertainment/staff entertainment, etc.

What if the contractor has paid for fuel via his bank but does not have a company car but does use his personal car for travel? Can the total totted up for milaege be used against this spend?

Also, if the company is home registered, can travel to the office where the work is carried out be expensed?

Breakfast, lunch and dinner be expensed?

Your help would be appreciated!


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13th Mar 2012 22:49

Far too wide a topic I'm afraid

Hi - I'd imagine the reason you've had no responses is that this is potentially a huge topic.  It's not that allowable expenses for the company are that difficult, they follow normal business expense rules, it's more that they are incurred by a director and so fall as employment income expenses, ie an item may get tax relief in the company but the director could end up paying tax & NI on it, with the company maybe also suffering an NI bill.

Sorry to have to say, but if I were you I'd scan through the relevant bits of HMRC Employment Income Manual the travel bit alone 31800 is probably a good start (before you fall asleep).

I'm sure there must be other guidance out there (maybe the PCG's website?) but the manuals tend to be the horse's mouth.

By the way, with regard to the fuel paid for by the company, yes you calculate his business miles at 45p (this year) and set off the money he's had in fuel, however even that is a bit of a risk and I would always advise the client not to put any personal costs through the company, for later offset.

Good Luck

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By khalm0
14th Mar 2012 01:00

Thanks for the pointer..

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