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Limited company contractor expenses8/7/2023 ![]() 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.Ĭheck out the guides below for more information on what expenses you are and aren’t allowed to claim through your limited company. Most contractors have relatively simple accounting needs, with perhaps half a dozen expenses to record each month. However, exactly what can and cannot be claimed as a limited company contractor isnt always clear-cut, which is where our specialist accounting services. 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. 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 the contract does not fall within IR35, the contractor may continue to operate via their limited company, as usual, collecting gross payment from the end client and paying corporation tax on the profits of their limited company after deducting permissible expenses. Working through your own limited company gives you greater flexibility over how. In other words, you should be able to take home more every year after tax than you would when working as a sole trader, for example. Always ensuring that your claim satisfies the “wholly, exclusively and necessary” test. Contractors working through their own limited company have the opportunity to maximise their tax efficiency. Therefore you should record all business expenses incurred so that you may see the true of cost of running your limited company.Īs 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. So what expenses can and cannot be claimed through your limited company?Īccording to HMRC, a business expense refers to costs which are incurred wholly, exclusively and necessary for your business. As a limited company contractor there are various business expenses you may incur.
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