Contracting questions for experienced contractors or accountants here

JamesFuller

Hello all,

I have a friend very new to contracting so asking the following questions.

1) What is the general acceptable amount you can claim for lunch when working 8hr days + 4 hours travel (total)?

I suppose this depends on where they are and what they buy. In London it's expensive to buy lunch (portions small etc) compared to say countryside little towns.

2) Is it possible to buy a smartphone and phone plan through LTD company? E.g. If you are VAT registered etc? Already have a business account and card. Do you just pay through this?

3) Is it possible to claim on entertaining clients and general drinks expenses to generate business?

4) What is an acceptable amount when it comes to staying in hotels? Again, this is about being reasonable. Obviously you don't want to stay in a dive but also not in Ritz either. Something reasonable.

Most hotels cost £75-100 a night and my friend may be staying out of their own business expense 2-4 nights a week for 3-4 months.

Appreciate I am asking lots of questions but I am learning and sometimes the answers are not always so clear reading on the web so I ask.

unforeseen

1. Nothing. HMRC have clamped down. You would need to buy lunch regardless or make and take your own. It is no longer an allowable expense without a good reason

2. Yes

3. Talk to your accountant on what you may be able to claim. Alcoholic drinks tend not to be claimable apart from possibly one with an evening meal if you are staying away

4. Up to you what you pay as it depends where in the country you are, what time of the year any major events in the area pushing prices up etc.
As an example, I had an arrangement with one hotel I stayed at regularly for a fixed price all year (around £75 p/n). Being Edinburgh then prices used to rocket when the festival was on but I still paid my normal rate AND they would always find me a room..

It also depends on what you want out of a hotel. I now tend to use travelodge type places because they are cheap and I'll get my food elsewhere.

happyandcontented

unforeseen wrote: »

1. Nothing. HMRC have clamped down. You would need to buy lunch regardless or make and take your own. It is no longer an allowable expense without a good reason

2. Yes

3. Talk to your accountant on what you may be able to claim. Alcoholic drinks tend not to be claimable apart from possibly one with an evening meal if you are staying away

4. Up to you what you pay as it depends where in the country you are, what time of the year any major events in the area pushing prices up etc.
As an example, I had an arrangement with one hotel I stayed at regularly for a fixed price all year (around £75 p/n). Being Edinburgh then prices used to rocket when the festival was on but I still paid my normal rate AND they would always find me a room..

It also depends on what you want out of a hotel. I now tend to use travelodge type places because they are cheap and I'll get my food elsewhere.

Our Accountant advises that £4-£5 per day is allowable and that is what is claimed. Subsistence for overnight stays is larger.

OP your friend needs a good Accountant, unless he gets one he will miss out on a lot of tax breaks. It will cost less in the long run.

JamesFuller

Hi unforeseen, thanks for your reply.

1. The work location is 60 miles away and have to travel 2.5hrs to get there and back. Would that be acceptable? This leaves very little time to make lunch or even have breakfast.

2 -

3 - Thanks

4 - How did you do it? Do you have any tips making such arrangement? I would be looking at places like Travelodge / Premier Inn at £75 mark.

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5. How much can you claim for dinner? Let's say you do a takeaway and it cost around £15-£20 max.

gettingtheresometime

happyandcontented wrote: »

Our Accountant advises that £4-£5 per day is allowable and that is what is claimed. Subsistence for overnight stays is larger.

OP your friend needs a good Accountant, unless he gets one he will miss out on a lot of tax breaks. It will cost less in the long run.

The OP / friend has been advised to get a good accountant before - though the questions being asked suggests that advice is being ignored & the good people of MSE are stepping into the breech

sangie595

gettingtheresometime wrote: »

The OP / friend has been advised to get a good accountant before - though the questions being asked suggests that advice is being ignored & the good people of MSE are stepping into the breech

^^^This^^^

When the advice you get is wrong, who is paying the bill? Your friend will. Trying to be cheap about it will potentially cost them a fortune.

happyandcontented

JamesFuller wrote: »

Hi unforeseen, thanks for your reply.

1. The work location is 60 miles away and have to travel 2.5hrs to get there and back. Would that be acceptable? This leaves very little time to make lunch or even have breakfast.

2 -

3 - Thanks

4 - How did you do it? Do you have any tips making such arrangement? I would be looking at places like Travelodge / Premier Inn at £75 mark.

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5. How much can you claim for dinner? Let's say you do a takeaway and it cost around £15-£20 max.

So this suggests the information is for you, not a friend! Get an Accountant!

motorguy

JamesFuller wrote: »

Hi unforeseen, thanks for your reply.

1. The work location is 60 miles away and have to travel 2.5hrs to get there and back. Would that be acceptable? This leaves very little time to make lunch or even have breakfast.

2 -

3 - Thanks

4 - How did you do it? Do you have any tips making such arrangement? I would be looking at places like Travelodge / Premier Inn at £75 mark.

---

5. How much can you claim for dinner? Let's say you do a takeaway and it cost around £15-£20 max.

Typically, i dont claim for lunch, however i claim for a flat rate for an evening meal if i'm staying over and a nominal amount for overnight subsistence.

I dont think theres much of an issue claiming whatever you need to for a hotel. If you want to stay in the Ritz and are on £1,000 a day, for example, what odds?

Personally i take the view that the cheaper the hotel the more money in my pocket so i tend to find cheap, clean hotels within walking distance of my place of work, ideally.

£15-20 a night for a meal - i dont think thats unreasonable but check with an accountant.

motorguy

JamesFuller wrote: »

4 - How did you do it? Do you have any tips making such arrangement? I would be looking at places like Travelodge / Premier Inn at £75 mark.

I use IBIS. I get the IBIS Budget for around £42 a night in Manchester and its within walking distance of the office.

I also look for good B&Bs (harder as i'm in Manchester centre) but i've stayed in Slough, Hatfield and Woking (living the dream! ) before now and i've generally been able to find B&Bs for under that price.

Some of the other contractors i work with rent an apartment if they're there all week and for extended periods and some of them share an apartment.

I'm only away 3 nights a week so i just stay in a hotel / B&B

JamesFuller

Thanks all the friend is working with an accountant now but this information has been useful.

Makkusu

I am a contractor accountant, a lot of this information is very wrong and I wouldn’t be surprised if you get yourself into a very bad situation.

Get an accountant and stop posting questions.