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I have a client who is caught inside IR35 as a Dr working through her Ltd company within the NHS. I have spoken to HMRC regarding the running costs of her Ltd company as I was unsure what would now be classed as an expense and what would not. There is also a further director within the Ltd company who needs to take a salary. HMRC advised me that all expenses can be claimed as before but that the 5% allowance is no longer available to my client although when I spoke to HMRC previously I was advised that the 5% allowance should cover all expenses. This is my first IR35 client and I need to be correct in my understanding of how to treat this but am told different advice from HMRC.
Obviously the NHS will now deduct NI and tax and pay my client a net salary. Would expenses come from her personal tax return at the end of the year? and can she actually claim all expenses as previous? What is the benefits of keeping her Limited company open?
Thanks in advance


  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderModerator, MAAT, AAT Licensed Accountant Posts: 1,431
    The newest technical note from HMRC can be found here and the previous technical note here.
    A 5% deduction currently allowed to intermediaries for “notional expenses” will no longer be available in the public sector

    What kind of expenses does she want to claim? (it's unlikely travel and subsistence expenses will be allowable).

  • BraddersBradders Registered Posts: 2
    Thanks for the reply. She wants to claim phone bills, relocating expenses, traveling to conferences and professional subscriptions. She also has a member of staff on PAYE.
  • readerreader Experienced Mentor MAAT, AAT Licensed Accountant Posts: 1,042
    She can't claim any of the expenses you mentioned apart from professional subscription if her professional body is on HMRC's list.

    She would probably be better off closing her company and using an umbrella company.
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