IT Contractor Expenses – How Much Can I Claim? Contractor Advice

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IT contractor expenses
IT contractor expenses

IT Contractor Expenses

IT Contractor Expenses – How Much Can I Claim was sent to us by a reader.

Ferpferp

Hello, I have just gone back into IT contracting after a few years in permie. However, quite a lot has changed while I have been away.

Anyway, I’m contracting through my limited company now instead of using an umbrella company like I used to.

What’s the deal with contractor expenses these days?

Can I claim travel expenses to the client’s site?

Lunch?

Percentage of household bills for running my home office?

Stationery?

Public Liability insurance?

Accountants fees?

IT equipment?

Anything else?

Thanks very much for your help.

Top Accountant on Contractor Expenses

A lot will depend on whether you are inside IR35 or not. If so then 5% of your income will be allowable for contractor expenses.

If you are outside IR35 then you can claim for things like :-

i) Accountants fees;
ii) Insurances;
iii) Postage & Stationery;
iv) IT Consumables;
v) Mileage;
vi) Other expenses under a dispensation (eg. night & day allowances);
vii) Office rent;
viii) Subscriptions;
ix) Capital allowances on equipment

Hope this helps?

Accountant 2 – Fresh Blue

I don’t know if Accountant 1 is 100% correct as you can claim for schedule E expenses regardless of IR35 status (as I understand it). E.g. travel to work (assuming you meet IR site based rules etc) and the other stuff.

The 5% inside of IR35 relates to how much of your taxable income you can set aside for other entrepreneurial type expenses and not just simply business expenses.

Ferpferp Question

Thanks for the advice on IT contractor expenses.

I believe I’ll probably fall inside IR35, even though I have an IR35 ‘friendly’ contract, and my current contract is for only 6 months. So, I hope it’ll extend. However, even if it doesn’t I’m likely to do a similar job for someone else that will surely be deemed as working directly for the client by the IR.

I guess I need more advice on that, but anyway – can anyone tell me the contractor expenses rates for mileage – i.e. 25p/mile for first 10000 miles or something is it?

FreshBlue Reply

40p for the 1st 10,000 and 25p thereafter (assuming car).

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