One of the many perks contractors can enjoy is the ability to enhance their take home pay by claiming legitimate businesses expenses. This is provided they have been incurred while on assignment.
When submitting your expenses, it is essential that you only attempt to claim for what you are entitled to. HMRC is taking an increasingly aggressive stance on tax avoidance, so any attempt to flout the rules could land you in trouble.
Of course, it’s not just contractors that could get caught out for submitting illegitimate expenses. Back in 2009 there was uproar as details of MPs’ claims were circulated in the media.
As many of you remember, the costs of moat cleaning, wigs, a Jacuzzi and a duck island, were claimed by shamed MPs.
The scandal is a great example of what not to do when it comes to business expenses. It’s important to remember that the system is there to support your contracting career and should not be exploited.
What are you entitled to claim?
While working on an assignment you may be racking up costs that could be claimed as business expenses. Some of the charges you can claim for are:
- Food and Drink
- Electronic equipment
To see if your business cost can be claimed as an expense, see our full breakdown.
Keep a record of your expenses
It is vital you keep a clear record of your expenses in case HMRC comes calling. Your records should be accurate and lawful.
If you’re using a compliant umbrella company, such as Parasol, they will assess if your claims meet HMRC guidelines. This means that only legitimate expenses will be allowed to pass through the system, thereby preventing you from getting into trouble.
Have your say
Are you a contractor? Do you claim business expenses? Join in the discussion on Twitter, or leave a comment below.