EXPENSES

Expenses

Start-up Expenses

Most contractors find that they incur some expenses before their limited company has been formed or a company bank account opened. In this case it is possible to claim pre-incorporation expenses such as company formation expenses, equipment costs, travel costs, marketing costs, accountants fees etc however its important that contractors keep a record of all invoices and receipts in order to substantiate their claim.

This is especially true for pre-incorporation expenses because the expenses might not be in the name of the contractors company.

Other Valid Business Expenses

Travel

Travel expenses include the actual costs of travel that are incurred as part of making a journey, while the employee is at a temporary workplace.

Meal Allowance

This includes any necessary subsistence costs incurred while at a temporary workplace away from your normal place of business as well as meals taken when staying away from home overnight for business.

Accommodation

Where overnight stay is needed; the cost of the accommodation(hotel, bed and breakfast charges) as well as any additional meals taken are deemed to be a valid business expense. However you need to make sure that the costs are genuinely attributable to the business travel and not attributable to something else.

Clothing

The costs of necessary protective clothing or a uniform that can only be worn at work can be claimed; however expenditure on other ordinary clothes cannot be claimed even if they are unlikely to be worn elsewhere.

Books and Magazines Subscriptions

Where these are related to your business and contract work.

Insurances

Such as professional indemnity insurance and business asset contents insurances.

Pensions

That are paid by the company to a HMRC approved scheme.

Telephone and Internet

Used for business purposes.

Professional Fees to Accountants

For incorporating the company, preparing yearly accounts and other running costs.

Marketing costs

Such as those incurred for domain purchasing, website hosting and design, design and printing of business cards and stationery etc.

Computer and other equipment costs

Purchased for business use.

Entertainment costs

Reasonable entertainment costs can be recorded as costs to the business, however they are not tax deductable.

Please bear in mind that contractors must keep a meticulous record of all receipts and invoices as HMRC might challenge any suspect costs.