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TERMS OF YOUR CONTRACT

TERMS OF YOUR CONTRACT

CONTRACTOR EXPENSES GUIDE

Contractors and IR35

IR35

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The amount of allowable expenses will depend to a large extent on your IR35 status.

If your contract is caught by IR35 then the only expenses claimable before calculation of the deemed salary are:-

  • 5% of net sales
  • Travel and accommodation expenses
  • Pension contributions
  • Professional subscriptions

The expenses allowable for a contract not caught by IR35 would typically be as follows:

  • Company formation
  • Accountancy fees
  • Business travel and accommodation
  • Postage for business
  • Stationery for business
  • Business telephone calls
  • Mobile telephone and calls
  • Salaries
  • Employer's N.I. contributions

Claiming expenses can have a considerable effect on your business through tax implications and available income for salary and dividends. All claims should be considered carefully.

  • Contributions to an executive pension plan
  • Business entertainment
  • Equipment purchased for business purposes
  • Motoring expenses using fixed rate allowances
  • Computer software
  • Technical books and journals
  • Certain professional subscriptions
  • Use of home as office
  • Company bank charges and interest

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