Sub contractor Expenses

domjandd

So, the subcontractor returns are about to start coming in and we have the same discussion each year to what a sub contractor can or can't claim for. We have the issue with 'travel and subsistence'... The subcontractor is a sole trader, and therefore can't use the meal rates or 'daily rates' as a deduction in profits, does everyone agree? We have the same battle each year with 'my mate said I can claim £££'S a day!' . Do other accountants just claim a day rate anyway and hope for the best?

MarieNoelle

Hi @domjandd
I would first check whether subsistence costs are allowable (i.e "itinerant trade" or business journeys outside the normal pattern). See here.
You are correct that there are no benchmark rates like for employees. I would insist on providing receipts or proof of payments - allowing maybe an estimated cost if the trader has lost some receipts on a few occasions. If you explain this from the start it is amazing how much more organised they become the following year!

domjandd

Hi @MarieNoelle Thank you for your reply! So how would you view a subcontractor who works at 3/4 different sites/companies during the year, but one of these sites is say for a period of say, 1 month at a location much further than usual. It is at the end of the day the subcontractor's choice to take this work on? This isn't something we have come across just an example we are thinking about.

domjandd

Apologies, my wording. No travel costs are allowable, I was looking to if this period of say 1 month was outside the 'working pattern' and therefore could claim breakfasts etc.