Ive seen that you both look after contractors so hoping you can help!
Can you give me a quick update (in idiots language) on the rules for processing hotel accomodation and meal costs when they are away on contracts - generall allowability and VAT reclaimability (if thats a word!) and limits type of thing. I know its a Limited company, Directors only, no staff. Not sure what length of contracts but lets assume they are defo not more than two years. But what if they are say a week at a site or a month at a site?
TIA
-- Edited by Casu on Monday 10th of July 2017 08:07:15 PM
Ive seen that you both look after contractors so hoping you can help!
Can you give me a quick update (in idiots language) on the rules for processing hotel accomodation and meal costs when they are away on contracts - generall allowability and VAT reclaimability (if thats a word!) and limits type of thing. I know its a Limited company, Directors only, no staff. Not sure what length of contracts but lets assume they are defo not more than two years. But what if they are say a week at a site or a month at a site?
TIA
I'm going to pass on this Casu, my main dealings are with sole trader subbies and on my one Ltd Co I never claimed meals, as he was stopping at campsites with his tourer caravan, so only the campsite expenses were claimed.
Looking at the rules it's not as straightforward as I thought as its based on journey time so how that works on an extended contract I don't know, but this link will help I hope https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim30240
On the VAT side if the company pays the bill the VAT can be reclaimed, but if the Director/Employee is reimbursed a flat rate then VAT can't be claimed. If travel is paid at so much a mile (max 45p) then the fuel scale charges can be used for claiming the VAT back.
Sounds like you already know the rules on length of contract but for clarification it's up to 2 years at a temporary workplace providing the length of contract is not known and ends before the 2 years are up. At the point it is known that a temporary workplace will go beyond 2 years travel costs can no longer be claimed.
Sorry I can't help more but hopefully Doug can.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
you may want to change from aiming questions directly at specific contributors as it then seems rude for others to interject.
You might however wish to emphasise the type of contractor? i.e IT contractor? might they be subject to IR35? is the expenditure wholly and necessarily for business purposes? Is the expenditure reasonable compared to the income generated.
Meals can be a bit of a nightmare but travel and hotels are more straightforwards.
I'll step aside and leave this to the adressee's of the request to respond to.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
You might however wish to emphasise the type of contractor? i.e IT contractor? might they be subject to IR35? is the expenditure wholly and necessarily for business purposes? Is the expenditure reasonable compared to the income generated.
Arrgh, I just assumed it was CIS.
You make a valid point about the question being aimed at just two people, I never really gave that a thought until you mentioned it.
You should make your comments anyway methinks
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
A very detailed reply considering you gave the question a Pass, definitely better than any answer I can give!
Hi Casu
I am in a very similar position as John as that all the Contractors that I have as clients are Sole Traders within the building trade, the couple that do work away only do so occasionally and the extra expenses are always reflected in the price that they charge, I never have a problem with the travel and hotel expenses but meals still have to be a reasonable amount, but as I say this is for Sole Traders and not for a Ltd Co.
As picked up by Shaun I do not think that by aiming a question directly at John and myself is entirely fair not just for the two of us but also for the other contributors on this forum who would feel that their replies are not required, I think that as you can tell from the replies from both myself and John (No offence John) that other peoples advice would be greatly appreciated in gaining the answers you require, the more the merrier.
I would suggest maybe starting a new post with a new title and including in the post all the information that Shaun has recommended.
Sorry I could not be of greater help.
Cheers
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
As picked up by Shaun I do not think that by aiming a question directly at John and myself is entirely fair not just for the two of us but also for the other contributors on this forum who would feel that their replies are not required, I think that as you can tell from the replies from both myself and John (No offence John) that other peoples advice would be greatly appreciated in gaining the answers you require, the more the merrier.
No offence taken and I completely agree with your comments.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Noted re the callout. Although on the basis of very few contributors who answer questions and knowing you two had such clients I did not think it out of line. But will not do it again.
Thank you for comments, noted. Also thank you for the link, provided a good start and now digging round HMRC.
I work for a Ltd company in the construction industry.
When operatives work away on contracts thy have their hotels booked for them by us (me usually). On the rare occasion this doesn't happen then a full VAT receipt is required for us to reimburse the worker whether that is a tradesman on site or the managing director.
With regards to meals we either use the HMRC rates and give them the cash so vat cant be claimed back or sometimes we book breakfast at the hotel and so we would get a VAT receipt for that.
As picked up by Shaun I do not think that by aiming a question directly at John and myself is entirely fair not just for the two of us but also for the other contributors on this forum who would feel that their replies are not required, I think that as you can tell from the replies from both myself and John (No offence John) that other peoples advice would be greatly appreciated in gaining the answers you require, the more the merrier.
I think you guys should be flattered!
Wouldnt stop me answering
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I work for a Ltd company in the construction industry.
When operatives work away on contracts thy have their hotels booked for them by us (me usually). On the rare occasion this doesn't happen then a full VAT receipt is required for us to reimburse the worker whether that is a tradesman on site or the managing director.
With regards to meals we either use the HMRC rates and give them the cash so vat cant be claimed back or sometimes we book breakfast at the hotel and so we would get a VAT receipt for that.
Thank you. Was pondering P11D issues but will start a new post.
Don't worry Casu, genuine mistake, you merely tried to grab the attention of who you thought could help, but hope you understand how it then possibly restricted other people giving advice. I read all the posts anyway and try to help where I can.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
