How are finance and interest costs are treated for tax purposes, and which typical expenses can be offset against your limited company’s Corporation Tax bill?
Limited Company Contractor Expenses
- As a contractor, you may incur a number of expenses related to your trade.
- For limited company contractors, you can offset almost all legitimate business expenses against your company's Corporation Tax bill.
- However, if you receive any personal benefit from business expenses paid by your company, you will be taxed on the value of any 'Benefits-in-Kind'.
- Umbrella contractors can typically reclaim a number of expenses, although the treatment of expenses claims does vary between providers.
- Start with our contractor's guide to limited company expenses.
As a limited company contractor, you may incur a variety of business expenses whilst undertaking your contract duties. Here, we look at how expenses are ‘allowable’ for tax purposes, and some common errors to avoid.
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Investing in improving your own skills or those of your employees can give you a crucial edge when it comes to pitching for new contracts. However, before funding training via your limited company, it’s important to know what you can – and cannot – claim as a deductible expense.
Many contractors travel by car on business – they may be visiting client sites, or attending conferences and training sessions. However, when it comes to claiming tax relief for the costs of these journeys, the rules can be confusing.
If you are a professional contractor, at some stage you may need to invest in some kind of marketing for your business – but can these costs be offset against your company’s tax bill?