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What expenses can contractors claim?

Allowable umbrella company expenses are listed below while the qualifying conditions are explained in the qualifying expense claims page.  

Travel
Car Rental
Parking
Toll Fees and Congestion Charge
Air Travel
Taxis
Travel Abroad

Travel Related Expenses
Accommodation, Meals and Subsistence
Day Subsistence
Rental Properties
Staying with Friends and Family
Personal Incidental Expenses (PIES) Allowance

Other Expenses
Telephone and Internet
Professional Subscriptions
Out of Pocket Expenses
Use of Home
Equipment
Training

Non Claimable Expenses

Travel

Only qualifying travel expenses are allowable - see Appendix I in the qualifying expense claims section. Provided your journey qualifies you may claim the following:

  • Train and Bus Fares
  • Other Public Transport
  • Personal Vehicle Mileage

Contractors using personal vehicles when travelling for business will be able to calculate a mileage cost on which they can claim tax-relief at the following rates in the tax year:

  • Cars - first 10,000 Business miles 45p, thereafter 25p per mile
  • Motorcycles - 24p per mile
  • Bicycles - 20p per mile   Top

Car Rental

You can claim tax-relief against reasonable car rental costs where a hire car is required to travel on business journeys only. Contractors wishing to extend their car hire periods to cover additional days when no longer on  business, should note that they will not be able to claim for the additional hire fees. Top

Parking

In car parks and metered car parking, contractors can claim tax relief on expenses arising from actual parking charges in association with business travel. Top

Toll Fees and Congestion Charge

Can be claimed subject to the travel qualifying as a ‘business journey'Top

Air Travel

Contractors are expected to accept the lowest available airfare as determined by the supplier for the class of travel to which they are eligible. Excess baggage charges are only allowable if the contractor is required to carry substantial business material. Top

Taxis

Taxi charges can be claimed where alternatives are not available or impractical.  Top

Travel Abroad

Claims that arise from travel abroad must be converted into sterling showing the exchange rate and the sterling equivalent on each receipt. Top

Travel Related Expenses

Provided the qualifying travel expense rules are met, the following expenses may also be claimed. Top

Accommodation, Meals and Subsistence

Hotels and other accommodation costs may only be claimed at/near a temporary workplace and never near a permanent workplace. Employees can claim reasonable meal and accommodation costs incurred whilst on company business, supported by the relevant receipts. Top

Day Subsistence

For meals, drinks and associated taxes and service charges when ‘working away from home' on the same basis as travelling costs. Scale rate allowances can be claimed. Top

Rental Properties

Where a property is rented in addition to a permanent residence maintained elsewhere and the rental property is required for business purposes. Only the business use element can be claimed. Top

Staying with Friends and Family

When an overnight stay is necessary in the performance of duties but an employee is able to stay with friends or family rather than at a hotel, any reasonable payment made to the host for the cost of accommodation and meals (say up to £25 per night) may be claimed.  A receipt from the host must be produced and the income received is taxable on the host (albeit subject to tax relief under the rent a room scheme). Top

Personal Incidental Expenses (PIES) Allowance

An allowance of £5 per night in the UK and £10 per night overseas can be claimed to cover the costs of personal incidental expenses (No receipts are required, provided the overnight accommodations itself is receipted). These are examples of the kind of expenses which may fall in this category.

  • Dry cleaning/laundry
  • Private telephone calls
  • Alcoholic drinks
  • Newspapers
  • Videos Top

Other Expenses

Telephone and Internet

Home
Some contractors will be required to use their home telephones for business calls.  The full cost (including VAT) of the business calls including internet access may be claimed.  Claims must be supported by:

  • The front page of the telephone bill showing any VAT included
  • All business calls highlighted on supporting pages

Mobile
Some contractors will be required to use a private mobile telephone in the performance of duties.  The full cost (including VAT) of the business calls including internet access may be claimed.  Claims must be supported by:

  • The front page of the telephone bill showing any VAT included
  • All business calls highlighted on supporting pages

 Internet access can only be claimed where there is no non-business use. Top

Professional Subscriptions

Contractors may claim tax-relief against professional subscription costs if they belong to professional bodies where the membership is necessary for the better performance of the individual's duties.  Top

Out of Pocket Expenses

Out of pocket expenses incurred in the performance of the contractor's duties such as postage, stationery, printing and trade journals may also be claimed. Top

Use of Home

This can only be claimed where a contractor's home is a workplace and must relate to the proportion of home costs specifically relating to that part of the home used for business purposes. Since it may be difficult to calculate the exact amount of the allowable costs that you have incurred as a result of working at home you may, provided you satisfy the conditions for relief, claim £3 for each week that you are required to work at home, without having to justify that figure. Contractors who wish to deduct more than £3 per week will be expected to keep records and to be able to show how their figure has been calculated. TOP

Equipment

Small items of equipment, including computer software, are allowable provided they are not categorised as fixed assets. As a general rule, individual items costing less than £200 will qualify where they are used for business purposes. Top

Training

Work related training courses can be claimed. The course needs to impart, instil, improve or reinforce any knowledge, skills or personal qualities which are likely to prove useful in performing your duties or will better qualify you in the employment. Top

Non Claimable Expenses

The following expenses are never allowable

  • Entertainment
  • Parking/Speeding fines
  • Private expenses
  • Clothing - unless protective wear, such as overalls Top