My 1st client...

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kellyp
kellyp Registered Posts: 44 Regular contributor ⭐
Hello all.... just have a couple of questions relating to my first clients tax affairs....

1) My client is a sub-contractor & occasionally gives his colleuges lift to work, is there any tax relief for this?

2) What are the general rules with apportioning some household bills to a business? Is it just if there is an office / work area, then that can be claimed for tax relief? (providing there are receipts)

3) His personal vehicle is mainly used for business miles (he has all his fuel receipts) but no record of personal or business journeys. How should I go about this??

Thanks in advance
Kel

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  • T.C.
    T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙‍♂️
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    Hi there. Congratulations on your first client.

    1. There is no allowance for giving your colleagues a lift to work (as far as I know). Be careful on this one though, because how much motor expenses he can claim will depend on where he is working, ie does he travel from job to job or does he work on the same site for a 12 month contract?
    2. With a sub-contractor it is difficult to prove that he uses much of his home for work, so I just use a "use of home" total in the end of the year accounts - possibly £5 per week.
    3. If he uses the vehicle for private use too, ie he does not have a separate vehicle for private use, then he either needs to keep a record of mileage (which in my experience is impossible for a subbie), or an apportionment at the end of the year needs to be made. This needs to be discussed and agreed with the client. In my experience this is usually about 10% private use.
    Hope that helps.
  • andrewtdk
    andrewtdk Registered Posts: 150 Dedicated contributor 🦉
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    If you decide to claim a mileage allowance rather than expenses i believe there is a 5p allowance for carrying passangers. Dont know how this works with carrying people to work etc but may be worh looking up
  • kellyp
    kellyp Registered Posts: 44 Regular contributor ⭐
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    Hi,
    Thank you both for your replies, much appreciated! :)

    With regards to the mileage, he was travelling from job to job. There was only 1 occasion where he was in one place for a few months.
    Out of curiousity, if he had been in the same place for a 12 month contract, how would the mileage allowance differ for this?

    Thanks again, Kelly
  • andrewtdk
    andrewtdk Registered Posts: 150 Dedicated contributor 🦉
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    If you work at a site for over 24 months it would no longer be classed as a temporary workplace so the travel there would be classed as travel to home from work and would therefore be disallowable/personal
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
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    andrewtdk wrote: »
    If you work at a site for over 24 months it would no longer be classed as a temporary workplace so the travel there would be classed as travel to home from work and would therefore be disallowable/personal

    Agreed.

    Furthermore, the travel becomes disallowable from the point where you know the workplace will be more than 24 months. Eg for the first 12 months you're not sure of the length of the contract and so it's allowable. In month 14 you find out you have a fixed contract for a further 12 months. At that point, you now know you will be there longer than 24 months in total and so that is the point at which all further travel to that place becomes disallowable - not once the 24 month point is reached.
  • kellyp
    kellyp Registered Posts: 44 Regular contributor ⭐
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    ok brill, thank you for that clarification :)

    With regards to the 5p passanger allowance, this apparently only applies to employees using their car and the employer can then pay this allowance tax free. If the employer doesn't pay it you cannot claim tax relief on it. Hope this is right?!

    Kel
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