Contractor Expenses

Some of the most common questions James is asked by his clients are around expenses and if they can claim a cost, as a business expense.

In this section James has written a number of guides to help you understand how expenses work and what you can or cannot claim.

For more advice on expenses or contracting please call us on 01442 795100 or email Sophie.lewis@dolanaccountancy.com.

The pages

A Guide to Expenses

Business expenses are costs incurred “wholly, necessarily and exclusively” in the course of running your business. Claiming these costs means that no tax will be paid on the amount spent.

Should I set up a Limited Company?

Being a sole trader is the most common way to operate a fledgling business. However, as a freelance business grows, it’s likely you’ll be better-served setting up a Limited company. This quick guide gives a run-down of the benefits of doing so.

How to Pay Less Tax as a Contractor

Everybody is required to pay their taxes – there is no foolproof way to avoid your fair share, without the taxman eventually catching up with you and we certainly wouldn’t recommend it. However, there are many subtleties to the UK taxation system and we are of the opinion that nobody should pay more tax than they are required to.

What is the 24 Month Rule for Expenses?

The 24 month rule is designed to clarify the extent of travel and subsistence expenses a contractor can claim back on when travelling and working at a client’s place of work.

What Travel Expenses can I Claim as a Contractor?

If you need to travel anywhere for work purposes, then you will be able to claim back certain expenses. These include mileage, public transport, subsistence and accommodation costs.

What can I Claim if I Work from Home?

If you work from home, you will be able to claim back certain expenses that are wholly and exclusively for your business. This includes office equipment, as well as the running costs of an office, such as the rent and utility bills.

Can I claim for a Christmas Party?

If you want to treat your hard working staff to a Christmas party, you could claim this back as an expense, as long you follow certain rules, such as ensuring you keep it at no more than £150 per head and invite every member of staff.

Childcare Costs

Thanks to recent changes, contractors are now able to partake in the new Tax Free Childcare scheme. This means that the government will top up a childcare account with 20% – so for every £8 paid in, you will receive an additional £2 for free.