Expenses I can claim as a self-employed consultant abroad

icebergx

Hi all,

I will start working as a Self-Employed Consultant (Sole Trader) for a Danish company from next month. I will be spending 40-50% of my time in Denmark once I start and I'd prefer to live an apartment rather than a hotel.
My question is, should I claim these accommodation costs as a business expense or can I submit these expenses to my client and claim them back from him? I presume the second option is preferable.

In an ideal world, I'd like him to give me an accommodation allowance so that I can decide where to live, if I'd like to "top up" the amount he gives me to get a nicer place or get a more modest apartment and keep the difference. What is the best way to do this?

Can my client claim these accommodation cost as a legitimate business expense?

Thanks.

Premier_2

Lots of questions here. e.g..

(a) are you liable for UK tax?

(b) are you actually self employed?
This is a big question. See the HMRC site for help
Usually if an company is willing to pay you business expenses, this would suggest you are employed by them.
(Although I do nkow of at least one huge employer who pays business expenses to people who do not work for them ... but as HMRC informed me, they are such a big company they appear to often make up their own rules and just tell us this is the way it is going to be :cool:)

Normally if you really were self employed you would either include the costs within your overall quotation, or quote on a basis of labour plus (agreed) costs. Those additional costs would still need to be invoiced (not on the employers expense reports) and they should be treated as income by your company (although you could still put the value of the allowable costs through your business as an expense)

I suggest seeking the advice of an accountant with particular experience on overseas business.

icebergx

Yes I should be liable for UK tax as I will be spending most of my time living here. Right?

OK so, I can just increase the amount to be invoice by the amount of rent I need to pay. But, i presume if the tax man looks at this, they will see this as income to me for which, I would be taxed?

Premier_2

icebergx wrote: »

Yes I should be liable for UK tax as I will be spending most of my time living here. Right?

OK so, I can just increase the amount to be invoice by the amount of rent I need to pay. But, i presume if the tax man looks at this, they will see this as income to me for which, I would be taxed?

That's right, it will be income ... and may push you above the VAT threshold too (if not already). But the taxman will only tax you on profit.

martindow

Are you VAT registered? If so you will not be able to claim back Danish VAT on purchases there. With your VAT number you will be able to be invoiced for goods with no VAT but I don't know the situation with a hotel.

icebergx

Hi,
I'm not VAT registered.
Do I need to charge VAT? My understanding is that VAT is due in the country where a service is delivered. In this case, most of my time will be spent in the UK, working from home but, I will be providing my services for the benefit of a Danish company. What applies here?

Thanks.

steve1980

Are you working for one company and one company alone or are you tendering other jobs as well? If the former then you are not self employed but actually employed by the Danish company and cannot claim to be self employed.

Premier_2

icebergx wrote: »

... In this case, most of my time will be spent in the UK, working from home but, I will be providing my services for the benefit of a Danish company. What applies here?

Thanks.

Remembering what you've already posted

icebergx wrote: »

... I will be spending 40-50% of my time in Denmark ...

icebergx

At the moment I'll be working exclusively for this company, on a specific project. However, I intend to tender for other work in the medium term (9 months-1 year).
Would I really be considered an employee in this instance?

steve1980

icebergx wrote: »

At the moment I'll be working exclusively for this company, on a specific project. However, I intend to tender for other work in the medium term (9 months-1 year).
Would I really be considered an employee in this instance?

Yes you would. This is how companies get around the responsibilities associated with full timers.

If you are not able to tender and work for someone else then you are employed.