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Expenses

Contractor Expenses

As a limited company contractor there are various business expenses you may incur. So what expenses can and cannot be claimed through your limited company?

According to HMRC, a business expense refers to costs which are incurred wholly, exclusively and necessary for your business. Therefore you should record all business expenses incurred so that you may see the true of cost of running your limited company.

As well as logging all business expenditure, and noting the contract and business activity that the expenditure relates to, you should also retain all receipts to cross-reference with your business expenditure log. Always ensuring that your claim satisfies the “wholly, exclusively and necessary” test.

You should be particularly wary of ‘duality of purpose’ - an expense that has both a business and a personal component, for example a business trip abroad which you enhance with some sightseeing. If there is any suspicion that the expense might not have been incurred if it were not for the personal benefit, it may be disallowed.

Typical contractor business expenses include your company formation, accountancy fees, business travel and accommodation, postage and stationery for business, training where directly related to your business, business telephone calls, and equipment purchased for business purposes.

Check out the guides below for more information on what expenses you are and aren’t allowed to claim through your limited company.

What expenses can I put through my Limited Company?

Checklist of allowable IT contractor expenses.

User

Written by Chris Deakin

Chris started his career in accountancy in 2009 working in general practice, providing bespoke advice to SME and individuals. He made the move into contractor accounting in 2014 and has specialised ever since.

Guide type and date

27th February, 2019 | Expenses

Contractor expenses - what can and cannot be claimed

Umbrella's checklist of the most popular 'wholly, exclusively and necessary' expenses.

User

Written by Neil Kellaway

Neil started a career as an Accountant in 2011, specialising in helping hundreds of contractors. Neil enjoys building relationships with clients and helping them manage their finances all the way through their contracting career. Whilst also helping manage and develop the next Accountants within Intouch.

Guide type and date

15th May, 2019 | Expenses

Contractor meal allowances and expenses - what can I claim?

Meal allowances are a valid expense for contractors – when it is a travel expense. To be allowable a meal allowance has to be an expense of travel.

User

Written by Chris Deakin

Chris started his career in accountancy in 2009 working in general practice, providing bespoke advice to SME and individuals. He made the move into contractor accounting in 2014 and has specialised ever since.

Guide type and date

25th February, 2019 | Expenses

Charging expenses back to your client

Charging expenses back to the client is common, but there are important ground rules that have to be followed if you wish to avoid falling foul of VAT regulations.

User

Written by Neil Kellaway

Neil started a career as an Accountant in 2011, specialising in helping hundreds of contractors. Neil enjoys building relationships with clients and helping them manage their finances all the way through their contracting career. Whilst also helping manage and develop the next Accountants within Intouch.

Guide type and date

20th January, 2019 | Expenses

Running your own Limited Company: Travel Expenses

If you are a contractor working through your own limited company and are outside IR35 then life is very simple.

User

Written by Chris Deakin

Chris started his career in accountancy in 2009 working in general practice, providing bespoke advice to SME and individuals. He made the move into contractor accounting in 2014 and has specialised ever since.

Guide type and date

25th February, 2019 | Expenses

Expenses without the scandal: tax deductible expenses for IT contractors

For IT contractors operating their own limited company, understanding the intricacies of tax-deductible expenses can mean the difference between just getting by and real profitability.

User

Written by Neil Kellaway

Neil started a career as an Accountant in 2011, specialising in helping hundreds of contractors. Neil enjoys building relationships with clients and helping them manage their finances all the way through their contracting career. Whilst also helping manage and develop the next Accountants within Intouch.

Guide type and date

6th January, 2019 | Expenses

Intouch Accounting explains how the time is calculated with regards to contractor expenses.

User

Written by Chris Deakin

Chris started his career in accountancy in 2009 working in general practice, providing bespoke advice to SME and individuals. He made the move into contractor accounting in 2014 and has specialised ever since.

Guide type and date

18th January, 2019 | Expenses

Contractor mileage log - free template

Downloadable chart to keep track of your contractor business when it’s on the road.

User

Written by Neil Kellaway

Neil started a career as an Accountant in 2011, specialising in helping hundreds of contractors. Neil enjoys building relationships with clients and helping them manage their finances all the way through their contracting career. Whilst also helping manage and develop the next Accountants within Intouch.

Guide type and date

19th May, 2019 | Expenses

More expenses guides

Contractor Expenses Questions

Contractors’ Questions: Can I claim travel expenses?

Tax aid for a self-employed techie sitting on four years of allowable receipts.

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Written by helen

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11th February, 2011 | Expenses

Contractors' Questions: Can I claim car hire costs?

Expenses tips for an umbrella company contractor seeking relief on the road.

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Written by Simon Moore

Simon Moore is one of the UK’s most consistently published freelance journalists on freelancing, self-employment and contractor issues, such as IR35, the Loan Charge and late payment. Trained in News & Features writing by NCTJ-approved journalism tutors, Simon worked in the newsrooms of local, consumer and national press titles, before setting up his own editorial services company, Moore News Ltd.

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24th February, 2012 | Expenses

Contractors' Questions: Would renting a flat be a justifiable expense?

Three factors determine if accommodation closer to the client looks claimable.

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Written by Simon Moore

Simon Moore is one of the UK’s most consistently published freelance journalists on freelancing, self-employment and contractor issues, such as IR35, the Loan Charge and late payment. Trained in News & Features writing by NCTJ-approved journalism tutors, Simon worked in the newsrooms of local, consumer and national press titles, before setting up his own editorial services company, Moore News Ltd.

Guide type and date

7th July, 2016 | Expenses

Contractors' Questions: Can I put my eye test on my company's expenses?

Tax tips for a limited company contractor eyeing a new set of glasses.

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Written by cukAdmin

Guide type and date

4th July, 2013 | Expenses

Contractors’ Questions: Can I claim use of home as an expense?

‘At-home’ consultants could shave 25% off their house’s running costs.’

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Written by helen

Guide type and date

25th July, 2011 | Expenses

Contractors' Questions: Can I claim travel, office and hotel expenses?

One IT contractor's current and future arrangements are ripe for reimbursements.

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Written by Neil Kellaway

Neil started a career as an Accountant in 2011, specialising in helping hundreds of contractors. Neil enjoys building relationships with clients and helping them manage their finances all the way through their contracting career. Whilst also helping manage and develop the next Accountants within Intouch.

Guide type and date

13th April, 2019 | Expenses

Contractors' Questions: Is this a workaround to the 24-month rule?

'Engineering a contract around the rules won’t impress HMRC.'

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Written by Neil Kellaway

Neil started a career as an Accountant in 2011, specialising in helping hundreds of contractors. Neil enjoys building relationships with clients and helping them manage their finances all the way through their contracting career. Whilst also helping manage and develop the next Accountants within Intouch.

Guide type and date

29th May, 2019 | Expenses

Contractors' Questions: Can I expense a training course and reclaim its VAT?

Expert helps a contractor hoping to get two lots of tax relief on his IT course.

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Written by Simon Moore

Simon Moore is one of the UK’s most consistently published freelance journalists on freelancing, self-employment and contractor issues, such as IR35, the Loan Charge and late payment. Trained in News & Features writing by NCTJ-approved journalism tutors, Simon worked in the newsrooms of local, consumer and national press titles, before setting up his own editorial services company, Moore News Ltd.

Guide type and date

16th January, 2015 | Expenses

Contractors' Questions: Can I put shoes, suits and lunch on expenses?

Expert helps a contractor wanting a tax deduction on formal wear and food.

User

Written by Neil Kellaway

Neil started a career as an Accountant in 2011, specialising in helping hundreds of contractors. Neil enjoys building relationships with clients and helping them manage their finances all the way through their contracting career. Whilst also helping manage and develop the next Accountants within Intouch.

Guide type and date

25th April, 2019 | Expenses

Contractors' Questions: Would commuting cost me less as a 'Ltd' company?

Expenses aid for a would-be contractor feeling stung by the travel costs of a new opportunity.

User

Written by Neil Kellaway

Neil started a career as an Accountant in 2011, specialising in helping hundreds of contractors. Neil enjoys building relationships with clients and helping them manage their finances all the way through their contracting career. Whilst also helping manage and develop the next Accountants within Intouch.

Guide type and date

21st February, 2019 | Expenses

More contractor expenses questions