Query about allowable deductions(toe in the water stuff)
Tom Cohen
I'm considering coming over to the UK to work for a while. The IR35
controversy has been noted, and I'm waiting to see how it will pan out.
In the meantime though, for planning purposes, I wonder if someone who
trades through a PLC of their own can tell me what sort of expenses are
tax deductable?
In Australia, if you're running a company, any expense occurred in
running the business is a deduction from the company profits. For
instance, if you have a room of your house put aside as an office,
you can claim a percentage of your rent, power, phone and so on.
You can also claim any travel costs between places of business - so
if you don't work from home at all, commuting doesn't count, but if
you have an office at home, commuting becomes travel between your
home office and a client and thus a legitimate expense.
What, if any, of these expenses are allowable/claimable?
If anyone can help, I'd be mighty grateful.
On the IR35 Saga - how likely is it that consultants can change the
way they work - more fixed rate work and so on? I suppose it takes
two to tango and so the client's wishes must also be taken into
account. At least in Australia when they tightened up the tax laws
for company/employee differentiation you only had to pass one test
out of 4 to be counted as a company - over there you lot have to pass
them all, and even then you might not get company status!
thanks in advance for any information,
thos
Andrew McKay
wrote:
>trades through a PLC of their own can tell me what sort of expenses are
>tax deductable?
A PLC is a different entity to a LTD. The former is only possible if
you are a large company (I don't know what the precise rules are). You
would most likely be forming an LTD.
>In Australia, if you're running a company, any expense occurred in
>running the business is a deduction from the company profits. For
>instance, if you have a room of your house put aside as an office,
>you can claim a percentage of your rent, power, phone and so on.
>You can also claim any travel costs between places of business - so
>if you don't work from home at all, commuting doesn't count, but if
>you have an office at home, commuting becomes travel between your
>home office and a client and thus a legitimate expense.
You can claim all of these things. However there are issues with
respect to when you come to sell your house. I'm not sure of the rules
on this, but you can be clobbered for capital gains tax on the basis
you have made a profit out of a business arrangement.
Under IR35 you will be hog-tied to a 5% expense margin. Go over that,
tough. There are some giveaways, such as if you work at one location
for less than 24 months you can claim business mileage (you won't get
rich on this). Note that the city of London is deemed to be a single
workplace, so changing contracts to another company in the city means
you are stuffed.
>On the IR35 Saga - how likely is it that consultants can change the
>way they work - more fixed rate work and so on? I suppose it takes
>two to tango and so the client's wishes must also be taken into
>account. At least in Australia when they tightened up the tax laws
>for company/employee differentiation you only had to pass one test
>out of 4 to be counted as a company - over there you lot have to pass
>them all, and even then you might not get company status!
I would suggest you take a look at http://www.pcgroup.org.uk. The PCG
are representing contractors (from any background) and may be able to
offer you additional information.
It costs 100 pounds per years to be a member of the PCG. It has
roughtly 12,000 members today and was only started about 18 months
ago.
Andrew
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Multi-user resource planner
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Rod Ellingham
A large donation to "Labour" party funds would likely do the trick.
Rod E
> G'day.
> I'm considering coming over to the UK to work for a while. The IR35
> controversy has been noted, and I'm waiting to see how it will pan out.
> In the meantime though, for planning purposes, I wonder if someone who
> trades through a PLC of their own can tell me what sort of expenses are
> tax deductable?
> In Australia, if you're running a company, any expense occurred in
> running the business is a deduction from the company profits. For
> instance, if you have a room of your house put aside as an office,
> you can claim a percentage of your rent, power, phone and so on.
> You can also claim any travel costs between places of business - so
> if you don't work from home at all, commuting doesn't count, but if
> you have an office at home, commuting becomes travel between your
> home office and a client and thus a legitimate expense.
> What, if any, of these expenses are allowable/claimable?
> If anyone can help, I'd be mighty grateful.
> On the IR35 Saga - how likely is it that consultants can change the
> way they work - more fixed rate work and so on? I suppose it takes
> two to tango and so the client's wishes must also be taken into
> account. At least in Australia when they tightened up the tax laws
> for company/employee differentiation you only had to pass one test
> out of 4 to be counted as a company - over there you lot have to pass
> them all, and even then you might not get company status!
> thanks in advance for any information,
> thos
Sianti
house expenses as you might get caught for Capital Gains Tax. Better agree a
fixed amount for wear and tear.
Laurie Rose
yourself?
- Laurie