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IT contracting expenses

  • 16-02-2013 5:41pm
    #1
    irishguy
    Registered Users, Registered Users 2 Posts: 3,310 ✭✭✭


    I am doing some research to see how tax efficient contracting through a LTD company would be. Can anyone validate my assumptions

    Assume my registered office is one bedroom of my 3 bed house then I could claim:

    1/3 of the following:
    Gas,
    Electricity,
    Property Management fee,
    House insurance,
    Water rates (When they come in),

    Others I am not really sure of:
    Cleaning
    Property maintenance


    100% of the following:
    Broadband,
    Mobile phone.

    I know I wont be able to classify my home as my ordinary place of work (as I would mostly be on client sites) so I guess I cant claim mortgage payments and subsistence.


    Also I will on occasion need to drive to meet clients. Would I be better buying a car through the company and paying BIK?

    Anything else I am missing?


Comments

  • #2
    srsly78
    Registered Users, Registered Users 2 Posts: 7,157 ✭✭✭srsly78


    Missing lots of stuff. Proprietary director or normal director? Other employees? Pension? Purchase of equipment? Flat rate subsistence when travelling to clients, if that isn't your normal place of work (nowhere is it clear what the exact definition of this is). Business trips abroad (secondment to foreign clients)? VAT?

    You definitely can't claim a portion of mortgage payments, but if you were renting you can expense some of that.


  • #3
    irishguy
    Registered Users, Registered Users 2 Posts: 3,310 ✭✭✭irishguy


    I would be a proprietary director. 1 other director , pension sorted
    I would be working on a clients site, which I think would be classed as my ordinary place of work (would be a 6month rolling contract) as you said it's a bit of a grey area. So I doubt I would be able to claim subsistence, only the odd time when I am going for a meeting.


  • #4
    Mr. Incognito
    Registered Users, Registered Users 2 Posts: 9,798 ✭✭✭Mr. Incognito


    I am going to have to close this thread and I will tell you why.

    The difference between setting up a Limited Liability company and being self assessed is massive.

    Companies have filing obligations. If you do not file, you will be struck off the CRO.

    Once your company makes a profit you will have to pay Corporation Tax THEN employers PRSI and PAYE on the profits that you extract as salary, in effect paying corp tax AND income tax on the profits so it is very expensive and paper heavy.

    But the reason I am closing this, and where you need professional advice is as soon as you start classifing parts of your house as a business it has two consequences,

    1. Wear and Tear Capital Allowances have to be apportioned
    2. It immediately affects your CGT if you dispose of your house and specifically your PPR relief which may have knock on consequences for Stamp duty claw backs and mortgage insurance relief.

    In short, it's not that simple. Seek a professional


This discussion has been closed.
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