Umbrella company travel benefits explained

Posted on 3 December 2008

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Travel is one of the key claimable expenses a contractor can use to reduce their payments, according to a leading industry website.

Contractor Calculator has explained this kind of tax "efficiency" can help a contractor to take home a larger amount of pay than they would otherwise receive in permanent employment.

The website has explained there are two distinct ways in which travel expenses can be claimed by a contractor.

One is by claiming travel costs as a "legitimate business expense", which results in less tax paid on business profits.

The other is by a contractor paying for their travel using money belonging to the company rather than their own cash.

"Contractors should keep accurate records of their business travel expenses, including all receipts and vehicle mileage logs," warns the site.

Freelancer expert Bob Jones recently wrote on Shout 99 that Her Majesty's Revenue and Customs are likely to more closely examine the record keeping of umbrella companies over the coming months.

Category: Contractor News

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