IT Contractor - Claiming expenses question?

turninggreen

Hi

Hope I have this in the right forum. I am a self employed (sole trader) IT contractor. Last year I got an IT contract in Dublin (living in West) and travelled up Sunday and returned Thursday or Friday to west. My accountant now doing my returns and has informed me that I should not be claiming expenses for rent and food. Is he correct in this? If this is the case I will have spent a very hard year and a half working away from home and by my calculation be lucky to have made the minimum wage?
How do other contractors survive if this is the case? Any thoughts much appreciated. Thanks

FusionNet

Im under the impression that if you something like 20 miles away from your work working on a site you can claim set amounts. These cover accomadation, food, travel etc. I think he might be being overly cautious. I mean if Im 80 miles away from home I have to eat or stay somewhere. If its for work that cant come out of my pocket thats a business expense. Now you cant pop a bottle of champagne but you can def right off a certain amount of food and accomadation Im sure..

USER X

Im also a self-employed IT Contractor. You can claim a subsistence allowance, ask your accountant about this. You are also entitled to claim some sort of a mileage allowance off your car. There is a meal allowance as well because you have to travel a certain distance from your normal place of work... This means you dont need to keep receipts for food because the set allowance applies. You should also have receipts for all fuel used in your car as its a business expense which lowers your profit. If you have bought any hardware for your business e.g. NAS, MFD, Servers, Computers, Switch(s), routers, firewalls, etc for the use of the business (Not for a customer), you can use the depreciation of these assets to lower your tax liability. Theres some information relevant to the subject on http://www.revenue.ie/en/tax/it/leaflets/it54.html . Sorry if it seems like I am not being specific/accurate enough here but its a while since I went over the exact details with my accountant. Sounds like your accountant needs to learn to be a bit more flexible with the rules, is he relatively new to this line of work?

Just remembered about your house/apartment. You are entitled to claim a percentage of your rent and bills for your rented accommodation if thats where the business is registered and is "The normal place of business". I think it comes down to what percentage of the rented premises is occupied by your businesses equipment and what percentage of the electricity is consumed by your business activities. A portion of your heating bills are also included as your "Office" needs to be heated.

Another small piece of advice... If you dont already have health insurance and you intend to continue self-employed, get some! I had a bad accident earlier this year and because I hadn't paid PRSI stamps (Your not obliged to but as I know now, its a good idea), social welfare (Disability allowance) pretty much just game me the two fingers even though I had disability certs. Also the public health system really is an insult, they said they might be able to get around to fixing an infected ingrowing toe nail in 4-5 months (at which time the toe would probably have fallen off), I was able to walk into VHI Swiftcare clinic and have it sorted in a day...

blue4ever

hear you knocking turninggreen!!

You can claim your actual travel experiences -based on receipts - rent?.. not too sure on that one

turninggreen

Hi

Thanks all for reply. What my accountant is saying is that since I was working on the customer site 4/5 days per week, the cost of renting accomodation and food is my own expense as it could be seen as my normal place of work since this was my only customer. My accomodation & food was approx 950 per month. Not to be able to claim at least part of this would serverly hit my takings. I am a one man band & impossible to work for more than one customer as suggested by accountant, which I believe would help things since I would then be seen to have multiple customers. Hope above makes sense.

USER X

Surely you did a few small jobs (nixers) here and there? Might be worth declaring them if it means you can declare a percentage of your rent against the business. If he's making the argument that you cant be in two places at the same time, you could have been doing web development or database related work remotely or online for a customer.

kenbrady

turninggreen wrote: »

Hi

Thanks all for reply. What my accountant is saying is that since I was working on the customer site 4/5 days per week, the cost of renting accomodation and food is my own expense as it could be seen as my normal place of work since this was my only customer. My accomodation & food was approx 950 per month. Not to be able to claim at least part of this would serverly hit my takings. I am a one man band & impossible to work for more than one customer as suggested by accountant, which I believe would help things since I would then be seen to have multiple customers. Hope above makes sense.

Did you work for this company for 1.5 years ?
Mileage & Subsistance can only be claimed when you are working away from your normal place of work.
There is a limit of 56 days for claiming this, afte rthat you have to negotiate a deal with the revenue.

turninggreen

Hi Kenbrady, yea the contract was for a year and then extended for another 6 mths. I started off doing 5 days per week, then after six months worked to 4 days in dub and 1 in west. Six mths later went to 3 days in dub (but worked hours for 4 days) and one in west and I took Friday off to try spend some family time. I still had to pay same rent as I was paying monthly whether there 1 or 7 days per week.