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Claiming back on expenses is one of the biggest benefits of becoming self-employed, however, each type of contractor will only be able to claim back on the expenses relevant to them. Here, we take a look at expenses and whether or not umbrella company contractors can claim for travel costs.

Contractor expenses

As a contractor, you’ll need to pay out for certain things in order to keep your business going – from stationary to specialised equipment.

Contractors are then able to claim back on these costs, which helps to reduce their tax bill at the end of each year.

Obviously, you won’t be allowed to just claim for anything and everything – it has to be related to your business.

Typical allowable expenses include:

  • Office costs – such as stationery, printer ink/cartridges, postage, phone/mobile/internet bills.
  • Clothing expenses, should you require specific protective wear, a uniform or a costume.
  • Financial costs – such as accountancy fees.
  • Training courses – as long as they are related to your current line of work.
  • If you work from home, you may be able to claim a proportion of costs for your heating, electricity, Council tax, mortgage interest/rent and internet/telephone use.

Can umbrella contractors claim expenses?

Compared to other types of self-employed workers, umbrella company contractors are a bit more limited when it comes to being able to claim back on expenses.

This is due to the fact that an umbrella contractor is employed by the umbrella, and is therefore treated similarly to a permanent employee in terms of being entitled to certain benefits, like holiday and sick pay.

Unfortunately, just like other permanent employees, this means that in general, umbrella contractors cannot claim back on expenses.

What about travel expenses?

In some cases, it is possible for umbrella contractors to claim expenses, but they would need to provide proof that they are not under the supervision, direction or control (SDC) of the end-hirer.

So, with regard to travel and subsistence expenses, as long as you’re not travelling to what would be considered your usual place of work, workers not under SDC could potentially claim for the following:

  • Train, bus, air and taxi fares
  • Hire charges
  • Fuel
  • Vehicle insurance
  • Hotel rooms
  • Meals on overnight business trips

For more information on working through an umbrella company, take a look at our How does an Umbrella Company work? page.

Our team of experts are available to answer any queries you may have, so drop us a line on 01442 795 100, email sophie.lewis@dolanaccountancy.com, or contact us via live chat.

Why Thousands of Contractors Choose Dolan Accountancy

With over 25 years experience in contractor accountancy helping thousands of contractors, freelancers and the self employed, Dolan Accountancy has the specialist skills, reputation and credibility you can trust.

Working closely with our sister company, Contractor Umbrella, it means we can offer one low cost, fixed fee package at £125 + VAT. This gives you the flexibility of using both our Limited Company Accountancy Services and our award winning Umbrella Service, for one inclusive cost.

If you’d like to find out more about how Dolan Accountancy can help you and your business, please give us a call on 01442 795 100 or email sophie.lewis@dolanaccountancy.com or jaime.thorpe@dolanaccountancy.com.

We don’t believe in tiered packages or hidden extra fees, instead we aim to give you everything you need, including:

  • Free Company Formation – This is where it all begins. Once you have decided on an available name, we will form your company free of charge (if using our accountancy services) and it will be ready for you to use in as little as three hours
  • Free use of Contractor Umbrella – With IR35 Legislation changes we understand that sometimes you are required to contract via an umbrella company. We will keep your limited company ticking over, while you work margin free via our sister company, Contractor Umbrella
  • A Dedicated Accountant – Your accountant will be there for any company or personal tax advice that you require. We will never outsource work, even to internal teams
  • Free Access to FreeAgent – We offer all of our clients access to FreeAgent, free of charge
  • Free Business Banking – We have decided to waive our commission so our clients can use Tide free of charge for the first year
  • Unlimited IR35 Status Reviews – We will review all of your contracts for IR35 purposes and provide you with our professional opinion as to its status
  • Free Registered and Director’s Service Office Address – Sometimes you just don’t want your home address on display at Companies House. When you sign up to our accountancy services, we will offer the use of our address as an alternative
  • Your Business and Personal Taxation Needs – This includes Company Accounts, Director’s Personal Tax Return, VAT Returns, Payroll, Corporation Tax and Dividend advice, to name just a few
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