Expenses – Limited Company Contractor
What expenses can you claim as a Limited Company contractor?
Limited Company contractors pay an average of Â£10,000 a year less than Umbrella Company contractors. This is mainly because of the money they can save by being able to claim expenses against tax.
1. Equipment Expenses
If you use a PC to run your business you can claim for that. You may be able to claim mobile phones and tablets as well if you use them predominantly for your business.
2. Telephone Bills Expenses
You can claim some of your telephone and mobile phones bills against tax provided that you use them for your business. It’s not smart to claim the whole bill but you should be able to claim a decent percentage of your phone bill against tax.
3. Stationery Expenses
You obviously need to buy books, folders, pens, pencils etc. to help you run your business and so they can be claimed against tax.
4. Internet Bills Expenses
All contractors will need to use the internet either for the job, for training or simply to look for jobs.They will also use it for other purposes but a decent percentage can be claimed against tax.
5. Accommodation Expenses
If you are working away from home you can claim any costs incurred, e.g. the cost of the hotel or B&B. You can also claim an evening meal against tax. Make sure that they are different prices every night though.
6. Travel Expenses
Your office is in your home. Therefore any travel to a client’s site is a cost and can be claimed against tax. remember to keep receipts for bus or train travel. If you go by car you can claim mileage of 45p per mile up to 10,000 miles in any tax year and 25p per mile after that. You can also claim for any parking costs that occur. If you travel by bicycle or motorcycle you can claim 20p a mile for the former and 24p a mile for the latter.
7. Training Expenses
Any training that you do that is relevant to your work is claimable.
8. Pensions Expenses
Every contractor should have a pension. It gives contractors one of their biggest tax breaks. With a Pension you can get the taxman to contribute almost as much as you do. Your National insurance contributions are less too.
This is not a complete list of what can be claimed by the Limited Company contractor but it gives a good view on how the Limited Company contractor is able to keep around Â£10,000 more a year of his or her hard-earned pay than an Umbrella Company contractor would.