One of the many perks you’ll enjoy as a contractor is the ability to claim legitimate business expenses – as long as they’re incurred during an assignment.
You may be unaware of this opportunity, or you might be confused about exactly what can be claimed for – luckily, we’re here to help.
We’ve created this handy guide that explains all you need to know about claiming expenses.
If you have to stay in a hotel or B&B during your assignment, you can to claim back the cost of accommodation. You could also get up to an additional £5 per night for personal incidental expenses – that’s things like toiletries. This rises to £10 if you’re temporarily out of the UK while on assignment.
To submit a claim for accommodation expenses, you’ll need to provide a scanned copy or picture of your receipt. If you’re seeking reimbursement of rental costs, the original, signed copy of the rental agreement will be needed.
Any rental accommodation claim needs to meet HMRC’s Dual Purpose rules – basically saying that you’re already maintaining a property while you’re renting the second one for your assignment. If you're renting a property to live in during your working week and then returning to your main home at weekends, you can seek reimbursement for the full cost of renting the second property.
You can claim expenses for a range of different transport methods, including planes, trains and automobiles – even bicycles are eligible! What’s more, additional costs such as rail/tube passes, taxi fares, road tolls and congestion charges can also be claimed for.
If you’re a driver, you can claim 45p per mile for the first 10,000 business miles you travel each tax year, then 25p after that. This includes journeys to and from home and assignment locations, plus between different sites. Keep your VAT receipts as they’ll need to be submitted with each claim.
Reasonable car hire charges can also be claimed for, provided they are just for business use. That means if you hire a car for seven days, but only work five, you can only claim for the amount of time you were on assignment.
A note on car hire: If you’re claiming for car hire, you won’t be able to claim as much for mileage. Speeding or parking fines can’t be claimed for, so please drive carefully!
If you prefer to get there on two wheels and cycle to and from your assignment, you’ll be able to claim 20p for each mile you travel.
Food & Drink
Any meals you buy while on assignment can be claimed for. They just need to be bought and consumed either on your way to or from work, or while at work. Buying food and drink the day before and eating it while at work doesn’t count.
If you keep your receipts, there are no restrictions on the amount or type of claim you can make. The maximum amount that can be reimbursed without a receipt is £25 per day.
You can make up to three food and drink claims in any 24 hour period without having to provide a receipt. The following table shows the maximum allowances that can be reimbursed.
Breakfast and evening meal allowances apply to days where you have to work longer hours than usual. They can’t be claimed on a regular basis, unless that’s your WorkStyle of course.
You can also claim for reasonable costs incurred when entertaining a business contact or client. Just submit these requests along with details of the people you’re entertaining. Unfortunately, nights out with friends, family or work colleagues don’t count!
The costs of electrical equipment such as an iPad or laptop can be claimed for too, provided they’re essential for your assignment. Software also counts as well. Personal safety wear can also be claimed for, such as hard hats, safety glasses or boots.
There’s no limit to the amount that you can claim, as long as you detail how each purchase supports your role.
It’s also possible to claim for the costs of any courses or training that you sign up to – provided it’s related to a professional qualification. If this is a requirement for the current assignment, there’s a good chance that the request will be accepted. Any non-work related qualifications aren’t eligible for reimbursement.
Although claiming for the odd bit of stationery may seem more effort than it’s worth, when you add together the cost of each item it really does make sense – think of the amount of pens you get through in a year!
There’s no limit to what can be reimbursed, as long as each purchase is related to your current assignment.
How to claim expenses with Parasol
At Parasol, we understand that contractors have extremely busy WorkStyles. That’s why we’ve made the process of claiming expenses as hassle-free as possible.
Simply log in to our online portal and upload or scan your receipts. It’s that straightforward! Submitting your claims this way guarantees that we’ll check them within 48 hours, so there’s no need for you to waste time chasing payments.
Contracting is anything but 9-5, so neither is our portal. You can submit your expense claims any time day or night when it suits you. This is just another example of how we’re with you all the way.
Please note that we’re only able to accept and check your expenses claim if:
- The picture/scan shows a fully-itemised receipt – detailing the item purchased, the cost, and the date & time of the transaction
- The picture/scan is clear and legible
- If VAT was charged on the expense, the VAT amount and VAT number should be visible on the receipt
In order to comply with HMRC regulations, we can’t accept bank statements, credit & debit card confirmation receipts, spreadsheets or photocopies of receipts.
Need more help?
We hope this guide sheds some light on how easy and beneficial it is to claim legitimate business expenses. If you think you need more information, please call 0800 458 0818 or email firstname.lastname@example.org.