Expense Claims for Contractors

There are plenty of business costs that you can claim back as a contractor, but if you don’t know what they are, then you’re missing out. You be saving yourself a bundle each year. Here’s a look at a few of the costs you should be claiming back so you can make sure you keep all the essential receipts. Bear in mind, things only count as expenses if they are wholly, exclusively and necessarily done for your business or work. You can’t claim for a trip to the shop just because you’re posting a few invoices on the way.

Travel

As a contractor, it’s pretty likely you’ll be travelling around a fair bit. If a job comes up that is quite some distance, travelling can put a bit of a dent in your earnings. Luckily, you can claim some the costs back.

If you’re driving, you can claim 45p per mile for the first 10,000 miles. It goes down to 25p thereafter. You can even claim if you’re just a passenger too, but that’s just 5p a mile. Parking costs and congestion charges are also included, while travelling public transport can be claimed back as well.

It goes without saying that any fines incurred won’t be included.

Training

If you want to claim for training, you need to be specific. You can’t just take up a training course relevant to your skills and claim the costs back. The course needs to increase your ability to do a job under an already existing contract and the job that entails. Make sure that you’re ready with a good explanation of why that’s true in case HMRC decide to investigate your claim.

Food

Although it might be arguable to suggest that as you need energy to work, all food is technically directly relevant to work and is therefore an expense. As nice as that would be, it unfortunately is not the case. All that counts are meals costs from working at a remote site away from your home or normal place of work, or when staying overnight away from home as well. To be on the safe side, it isn’t advisable to order lobster and caviar at your hotel though.

Accommodation

This applies to hotel or bed and breakfast costs when it’s essential for you needing somewhere to stay. Fairly straightforward, but as with the food, HMRC aren’t going to consider a night at the Ritz as a reasonable expense, so it wouldn’t be a good idea to try that out.

Clothing

You can claim for work clothes, but you have to be careful. These clothes cannot be considered in anyway “every day” clothes. For example, buying a new t-shirt that you only wear at work, does not count. Things like hard hats do count, although you’re probably welcome to wear the hard hat out on the town if you like.

There is plenty more information on HMRC’s site, such as this A – Z of expenses. There is a lot of stuff in there, so make sure you keep receipts or proof of purchase for everything that you think might be a claimable expense. Also remember that HMRC can investigate claims up to 6 years old, so don’t chuck everything out each year. If you can’t prove an expense, you will have to pay it back.