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Lesters’ consultation is a thorough process adopted to help you determine the best way of working for your circumstances. We believe your career is of paramount importance. After all you have worked hard to be successful. For this reason we will talk through all the available options – not just the easiest for us. Whether you are just contemplating life as a contractor or even if you’re new to contracting, we will take you through exactly what’s involved in all of the options and then let you decide: after all its your career. We will discuss running your own business as a sole trader or limited company or working through our umbrella company, or our ex-pat employment solutions. During our consultation we will also tell you exactly what’s needed on the right path to compliance, taxation and generally making sure you are confident in the decisions you make regarding your way of working
As a contractor your IR35 status effectively determines your tax position with HMRC. Contractors working through a limited company who fall outside IR35 are entitled to receive payments in the form of dividends, not paying PAYE taxation but Corporation tax. Those captured by IR35 are regarded as ‘disguised employees’ and are only entitled to receive payment on a PAYE basis
Understanding your rights and how to keep on the right side of IR35 is vital. Please look through the IR35 guide. It’s easy to use: just answer the questions to find out whether or not you pass IR35. Alternatively call one of our Business Development team on 020 8735 6370 or email us at forms@sybersolve.com. We’ll happily discuss your specific options. It’s free and there is no obligation
Please visit the HMRC website for more information http://www.hmrc.gov.uk/leaflets/guide_limitcomp.htm
We have been working closely with Osborne Clarke to ensure absolute compliance to the forthcoming AWR implementation on 1st October. It is key to us that our Company, Contractors and Recruitment Partners are confident in our approach to AWR. Please call a member of the Business Development team on 020 8735 6370 to discuss further or alternatively come to The Arrivals Lounge where we will be pleased to spend time with you
Please see the link below for a fuller summary of the regulations as defined by the Department of BIS
http://www.bis.gov.uk/assets/biscore/employment-matters/docs/a/11-949-agency-workers-regulations-guidance.pdf
Tax Deductible Reimbursed Expenses
The following sets out in brief which employment related business expenses can be reimbursed tax free ("allowable") to employees based on current (FY 2011/2012) tax legislation and specific regulations defining tax-deductible expenses
Travel
Only “qualifying travel expenses” are tax deductible (allowable). These are only travel costs you are obliged to incur in performing your duties and do not include personal travel expenses. Please note that travel costs include the actual costs of travel and also the subsistence expenditure and any other associated costs that are incurred as part of the cost of making the journey. HMRC will not accept taxi fares where there is a suitable means of public transport or business mileage
Long-term commitment to contracting 'over-arching' contracts
Under HMRC guidance, where you successfully demonstrate a long-term commitment to contracting - overarching contracts - with your employer you may be able to claim reimbursement of "main site" expenses
However, if you expect only to work at a single location throughout your time as an employee, this location will be regarded as a permanent workplace and expenses will not be allowable. Consider this is conjunction with the 24 month rule: travel to and from a work site is an “allowable” expense if the period of time at the site is both expected to be less than a maximum of 24 months, including any time spent on-site prior to the current contract and in fact does not exceed 24 months
Why not call one of our Business Development team on 020 8735 6370 to discuss your specific circumstances?
Business Mileage
Road Travel - Use of Private Vehicles
You may claim a cost per mile for allowable business journeys using your own (private) vehicle on the basis of the engine size and the type of vehicle. There is also a distinction between the first 10,000 miles in any tax year and subsequent miles. The rates that may be claimed are as follows:
Private Vehicles – Allowable Mileage Rates
| Type of Vehicle |
First 10000 Miles |
10000+ Miles |
| Motorcar |
45p per mile |
25p per mile |
| Motorcycle – all |
24p per mile |
24p per mile |
| Cycle |
20p per mile |
20p per mile |
Road Travel - Use of Hire Cars
The cost of a short-term hire car is allowable, provided that the use of the hire car is necessary to the performance of the duties as an employee, typically where no privately owned vehicle is available
Rail and/or Air travel
The cost of train or air fares for business-related journeys is an allowable expense. Additional costs such as excess baggage claims are also allowable if indeed they are incurred in the performance of your duties and have no personal element
Other Travel Costs
Allowable travel costs include bridge, tunnel and road tolls, bus and taxi fares, car parking charges and congestion charges, provided that these expenses have been incurred on a business trip
Accommodation
The cost of hotel accommodation for nights spent away from home on business may be claimed
The cost of maintaining a rental property may also be an allowable expense if:
· use of the property is necessary for employment purposes, and
· a permanent residence is being maintained elsewhere within the UK where a regular pattern of commuting back to that residence is evident
Where a rental property is not used exclusively for business purposes, the proportion of costs relating to the period of private usage is not allowable. In such cases it will be necessary to determine the appropriate split of private and business usage and claim only for the business use
The cost of accommodation in relation to site work is allowable if the period of time at the site is both expected to be no more than 24 months in total, including any time spent on-site prior to the current contract and in fact does not exceed 24 months
Please speak with our Business Development team to discuss HMRC dispensation for accommodation. We will happily provide you with allowable rates for rental within London and outside London
Subsistence
When staying overnight the costs claimed in relation to meals must be seen to be reasonable by HMRC
The levels of costs that are generally acceptable to HMRC are as set out below:
· breakfast or lunch - £15 in London and £10 outside London
· dinner - £40 in London and £30 outside London
At Lesters we have dispensation from HMRC to allow daily subsistence of:
- £15 per full day for UK domicile contractors
- £22.50 per full day for non-domicile contractors
Where you have dined with work associates, only the proportion of the total cost that pertains to you is allowable. HMRC accepts that reasonable costs of alcoholic beverages with a meal may be claimed
Tools and Equipment
The cost of the upkeep, repair and replacement of tools and equipment is allowable where these items are:
· wholly, exclusively and necessarily used in the execution of a contract. No element of personal use of tools or equipment is
allowable and they are not fixed assets (desks, chairs etc)
Uniforms / Protective Clothing
The cost / repair and/or upkeep if these is an allowable expense only if they are necessary in the execution of your work (Healthcare uniforms / protective clothing) as an example
Stationery, postage etc
The cost of stationery, postage, printing, photocopying and phone calls etc. is an allowable business expense provided that these are wholly, exclusively and necessarily incurred in the performance of your duties. Documentary proof must be made available
Subscriptions / Registrations to Professional Societies
These are allowable only if membership is essential to the performance of your work (GMC / HPC registration)
Insurances / Indemnities
These are allowable if required for you successfully perform your work, e.g, Medical Defence Union or the Medical Protection Society fro Medical practitioners
(Please visit HMRC’s website at http://www.hmrc.gov.uk/incometax/tax-allow-ees.htm
for more in-depth coverage of the above)
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