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One of the main benefits of operating through a UK Limited Company is that you are able to reclaim a substantial proportion of the expenses that you incur from the Company and these expenses are allowable against Corporation Tax.
To enable us to capture this non-billable expense information, we issue Expense Reports on a monthly basis by the close of the third working day after each month which we ask you to complete and return in time for us to validate the details and include the reimbursement of the expenses incurred in the monthly payroll run on the 25th day of the month.
Broadly speaking, non-billable expenses fall into three main categories – day-to-day expenses, recurring expenses and allowances.
Day-to-Day Expenses are those expenditures that change depending on the purchasing decisions of the Director(s) and are supported by a receipt.
We have identified the following main categories:
As a guide, spending of up to £20.00 on a meal can reasonably be categorised as Subsistence whereas spend of over £20.00 would be deemed to be Entertainment. From a tax perspective, there is a difference in the treatment of Entertainment incurred in the UK and overseas. Hence, we have included a category for each. Motor Expenses are for the variable elements such as licences, repairs and servicing. Car Lease costs and insurance appear on the Recurring Expense schedule.
Recurring Expenses are those expenditures that occur regularly on a periodic basis and at least a portion of which can be treated as a business expense.
We have identified the following main categories:
The level of these costs that can be reasonably treated as a business expense depends on the circumstances of the individual but the benchmark for the Home Office cost elements is 25%.
For certain categories of expenditure, as an alternative to claiming the reimbursement of receipted expenses, the HMRC has set the following allowances that can be claimed:
Subsistence
Where you are unable to obtain a receipt and you are working on a client’s site but are not staying overnight, then a meal allowance can be claimed on the following basis:
Accommodation
Where you are unable to obtain a receipt, an allowance is available in respect of accommodation, meals and incidental subsistence costs, at the following rates:
Mileage
Mileage can be claimed for business-related travel including to and from your home to your place of work. The following rates are applicable:
| Vehicle Type | First 10,000 business miles | Over 10,000 business miles |
| Car | 45p | 25p |
| Motorbike | 24p | 24p |
| Cycle | 20p | 20p |
Incidentals
The maximum cost of incidental expenses of £5 per day in the UK and £10 per day if overseas can be claimed for each night that you have to stay away from home.
This is to cover costs such as laundry, personal telephone calls and newspapers.
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