Contractors: Essential Guide October 2016

4 What expenses can I claim? Deductible expenses Any expense you claim needs to be ‘wholly, exclusively and necessary to the business’ – meaning that the expense has to be 100% related to your company. Odiri Tax Consultants can provide assistance using the cloud software, Freeagent expenses tracking too, which allows contractors to submit expenses that we then review to determine whether they will be deemed allowable by HMRC.              Travel costs Business mileage Accommodation and subsistence (only when staying away from home) Business insurance Computer equipment IT software and consumables Telephone and internet Printing and stationery Accountancy Postage Salaries Pension contributions paid by your limited company on your behalf Professional subscriptions 5 Do I need to register for VAT? Requirement to register for VAT is only mandatory if your turnover will be more than the VAT threshold or the company you are contracting for requires it. Where this is the case, it is sensible to consider applying for the flat rate scheme, which is available to small businesses with a VAT exclusive annual taxable turnover of up to £150,000. Under the terms of the scheme, you can charge VAT to the business you are contracting for at a rate of 20% but pay it back to HRMC at a reduced percentage. The rate you are required to pay depends on the sector your limited company is categorised under. 5

Contractors: Essential Guide October 2016 | Page 5