CT - Travel Expenses

Rachel
Rachel FMAAT, AAT Licensed Accountant Posts: 349 Dedicated contributor ? ? ?
Hi there me again sorry to be a pain.

I have a new client who is a computer consultant with a Ltd company.

I just wanted to confirm with one of you guys that his travel expenses for work are disallowable for CT purposes? I believe that he mainly worked in the clients office.

He also wants to claim for his telephone and internet but it should only be the exclusive business use.

He also tried to claim his home rent!

Comments

  • Rachel
    Rachel FMAAT, AAT Licensed Accountant Posts: 349 Dedicated contributor ? ? ?
    am I right in thinking that even if he worked 100% of his time at home that he cannot claim his rent even partial
  • groundy
    groundy Registered Posts: 495
    If he works from home he can charge his company a rent which must then be declared on land and property of personal tax. However on personal tax he can offset the cost of home against rental from company.

    Eg

    Gas / Elec £200
    Rates £800
    Rent £5000
    Water £200

    Total £6200

    10% of home used for business therefore charge company £620 and then reclaim 10% of home expense on Personal tax and therefore no personal gain.
  • Poodle
    Poodle Registered Posts: 711
    Rachel wrote: »
    Hi there me again sorry to be a pain.
    He also wants to claim for his telephone and internet but it should only be the exclusive business use.

    You have to be careful with this. It is ok to claim back identifiable business telephone calls costs from a list on a phone bill in the same way as any other business expense suffered.

    However you cannot claim line rental or inclusive telephone call bills in this way when the bill is in the employees name without falling into the pecuniary liability principle.

    A starting point for you to have a look at this, could be here

    http://www.hmrc.gov.uk/MANUALS/echmanual/ECH15010.htm
  • Poodle
    Poodle Registered Posts: 711
    Rachel wrote: »

    He also tried to claim his home rent!

    I agree with what goundy says but in addition it is a good idea to have some sort of written aagreement between the company an the property owner/s.
  • Rachel
    Rachel FMAAT, AAT Licensed Accountant Posts: 349 Dedicated contributor ? ? ?
    Thank you very much for your answers. It is as I expected.

    I always feel like I am delivering bad news to clients
  • deanshepherd
    deanshepherd Registered Posts: 1,809
    He can charge as much rent as he likes to the company. It is often handy to have a little rental profit to use up personal allowances without worrying about the NI threshold.

    Get your client to switch his mobile contract into the name of the company and he can make as many business AND private calls as he likes and get 100% relief with no personal tax consequences.

    Company can probably pay for his travel too, depending on nature and length of his contract.
  • Rachel
    Rachel FMAAT, AAT Licensed Accountant Posts: 349 Dedicated contributor ? ? ?
    Thanks Dean for your response always very useful.

    He has used up his personal allowance on a different employment. Would there be any benefit on him claiming his rent on CT600 only for it to go on his SA. Obviously I need to go and check the land rate.

    Thanks everyone for you help it is much appreciated, I have been in accounts for 13 years but only just started self employed, it is hard going it alone especially when every client is very different.
  • Rachel
    Rachel FMAAT, AAT Licensed Accountant Posts: 349 Dedicated contributor ? ? ?
    he only works from home 10%
Privacy Policy