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Expenses
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This guide gives you an overview of the type of expenses that HMRC considers allowable. It is based on
their current guidelines and is therefore subject to change but don’t worry - we will keep you informed
and will always ensure you stay compliant.
An expense must be incurred wholly, necessarily and exclusively in the performance of your duties.
We have the expertise to help and advise you on what you can and can’t claim so that only allowable
expenses are processed. Any claim found to be fraudulent may result in you being subject to disciplinary
proceedings and you will be required to re-pay the appropriate level of tax to HMRC. Pinnacle will, from
time to time, conduct random audits to ensure expenses are legitimate and receipted appropriately.
Unless otherwise stated, you must send us receipts to support all claims. Where we refer to an
expense as ‘Un-receipted’, you may submit your Pinnacle expense form without receipts. However,
in line with our audit procedures we’d strongly recommend you retain any receipts to validate your
claim when required. Debit or credit cards till receipts are not sufficient.
What can you claim?
Section 1 -– Travel & Subsistence
In order to qualify for tax relief on expenses in this section, you must be able to confirm that you have not
nor do you expect to work at the same site for more than 24 months and you will work at (or intend to
work at) more than one site during your employment. You must also live at least 5 miles from the site to
which you will be travelling.
Please note: the moment you believe your time at a particular site will exceed 24 months or you believe this will be your only
contracting assignment you will undertake, you should stop submitting travel and subsistence expenses and let us know ASAP.
Travel
Mileage can be claimed for all business related travel, where you are obliged to travel to and from your
temporary place of work and use your own vehicle. You can claim the following mileage rates:
Vehicle Type
First 10,000 miles per tax year
Cycle
10,000+ miles per tax year
20p20p
Motorbike24p 24p
Car
45p25p
Pinnacle Passengers
5p
5p
Public transport costs, tolls, congestion charges and parking fees are also reclaimable where receipts are
provided with each claim.
Expenses
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Subsistence
Covers sustenance (food and drink) and personal incidentals when staying away from home (i.e. private
telephone calls, newspapers & laundry services). You can either claim for receipted costs of subsistence or
use the following set rates:
Subsistence can be claimed on the following basis:
If you are out of the house 5-10 hours
Un-receipted
£5.00
If you are out of the house 10+ hours
Un-receipted
£10.00
Staying in accommodation overnight
Receipted
£25.00
*You may claim an additional £5 subsistence if you have worked additional hours in a shift outside of your regular working pattern
before 06:30 or after 20:00.
** If this irregular shift exceeds 10 hours and finishes after 20:00 you are able to claim a total of £25.00 subsistence.
Section 2 -– Working away from home
If it is necessary for you to stay away from home during your contract, you can claim tax relief on
expenses subject to the condition that you must continue to maintain a main residence elsewhere in the
UK. You must also send us your receipts for all expenses claimed under this section.
Hotels/B&Bs
Our guide to what is reasonable is as follows:
Location
Amount per night allowed
Within the London postcode area
Anywhere else in the UK or Ireland
Anywhere else outside of the UK or Ireland
Up to £110
Up to £90
Up to £120
You can also claim up to £20 per day for the cost of an evening meal provided it is not included in the
accommodation fees (see Section 1; Subsistence). This is increased to £30 when staying outside the UK and
Ireland. Receipts are required and please note that this cannot be claimed in addition to a £25 subsistence
overnight claim as the meal has already been consideration within that margin.
Expenses
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Rented accommodation
The accommodation cost (including gas, electricity, council tax etc) can be reclaimed subject to you
maintaining a property elsewhere... you must maintain at least two properties one of which is kept
solely for the purposes of your work. A rental agreement or letter from your landlord should be supplied
as evidence (where this is not available a signed declaration must be provided by the payee) as well as
receipts for the payment of rent and financial responsibilities (e.g., utility bill, council tax bill etc). Unless
you have signed for your primary residence on your application form you will need to provide a utility bill
from this address aswell.
Personal incidental expenses (PIE)
As outlined earlier you may claim for the cost personal incidentals to the value of £5; this increases to a
maximum of £10 when staying outside of the UK & Ireland. Where you have evidenced you are staying
away from home i.e. have an accommodation claim supported by a receipt we will the add appropriate
PIE.
Section 3 - General expenses
The following expenses can also be claimed. Unless otherwise stated, you will need to provide receipts.
Telephone and internet
Business calls and internet costs are tax allowable providing they are incurred wholly, necessarily
and exclusively in the performance of your duties. The cost of purchasing a mobile phone cannot be
reclaimed. We require itemised bills to be submitted with the business calls highlighted.
Car hire
The cost of hiring a car can be reclaimed providing it is for business purposes. The maximum term you
can claim this for is 6 months and you will need to provide the lease agreement and VAT receipts for fuel.
Please note that mileage reimbursement in this instance is NOT claimable as you will be claiming the cost
of fuel.
Office consumables, postage and stationery
Provided they are incurred for business purposes, these are an allowable expense.
Subscriptions
Professional subscriptions can be reclaimed providing: they are included on HMRC’s list of approved
bodies and societies (www.hmrc.gov.uk/list3/list3.pdf <http://www.hmrc.gov.uk/list3/list3.pdf>) and
membership is required for your job.
Expenses
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Training course and tuition
These are reclaimable providing they are designed to impart, instil, improve or reinforce any knowledge,
skills or personal qualities which are likely to prove useful to you as an employee when performing your
duties.
Tools and equipment
If you need to purchase tools, safety equipment/wear or other equipment that is essential to your
assignment, such costs are reclaimable. If you believe the amount will exceed £250 per year, please
contact us to discuss before purchasing.
Home working
Where you are required to work from home for the majority of your time, you are entitled to claim £3
per week to cover additional costs such as increased electricity/gas usage. You don’t need to send us any
receipts to support this.
Eyesight tests for computer screen users
The cost of an eyesight test up to the value of £15 is allowable with a receipt. Please note that the cost of
glasses, contact lenses or laser correction treatment cannot be claimed.
Client Entertaining
Client entertaining is not an allowable expense through the umbrella service. If you envisage that your
role will involve a significant amount of entertaining please call us to discuss whether an alternative
payroll solution would be appropriate.
Other expenses
For any other expenses not listed please call us on 0161 876 0333 to discuss.
For more information on all forms of contracting, call or email a Pinnacle Sherpa
call 0161 869 1740 email [email protected]
web pinnacleaccountingandtax.co.uk
Woodcock House, Waters Edge Business Park, 1 Modwen Road, Salford m5 3ez