Expenses for self-employed individuals
AmberPay are required by law to operate PAYE and national insurance on all payments made to you but we can still reimburse you for any genuine expenses you have incurred without them being subject to tax and national insurance.
These guidelines set out the rules you must follow in order to be able to claim expenses tax free from AmberPay as a self-employed person and any other expenses you wish to claim when you do your tax return that have not already been claimed from AmberPay.
Please note that any expenses claimed that we consider are not in line with these rules will not be processed by us or alternatively will be have to apply PAYE and National Insurance to those expenses. If you have any questions or are unsure about whether your expense is covered by this policy, please contact us on 01624 815189 before submitting your expenses claim.
Wholly and exclusively
As a self-employed person you may only claim expenses incurred wholly and exclusively in the performance of your trade (s.34 of ITTOIA 2005) and these may be reimbursed to you along with your payment for the services provided.
If any part of the expense is deemed to have a personal benefit attached (also known as duality of purpose) the whole of the expense will be taxable. An example of this would be a claim for general clothing, HMRC would say that the clothes were not exclusively for the performance of your trade as they could be worn as everyday clothing (unless it is specialist clothing such as overalls or steel toe cap boots).
It is important that you only claim expenses genuinely incurred and you should have receipts to support all expenses claimed (including mileage). HMRC may seek recovery of tax for any incorrect expenses reimbursed to you. Mileage claims must be accompanied by VAT receipts in order that we may verify the miles claimed with the amount spent on fuel with HMRC tables. AmberPay will need a COPY of all receipts for expenses claimed. PLEASE DO NOT SEND ORIGINAL RECEIPTS
Travel - Regular and predicable places of business
If the expense you are claiming is travel from your home to another place of business it can only be claimed where you are based at home and the travel does not form a regular and predictable place of business.
The law does not make it clear at what point a place of business becomes regular and predictable but HMRC have clarified their position in their own guidance where BIM37675 confirms that:
"Where a subcontractor works at two or more different sites during a year travelling expenses between the taxpayer's home and those sites should normally be allowed."
It then goes on to say:
"However, where the subcontractor works at a single site in the year and this is the normal pattern for the business, travelling expenditure between the subcontractor's home and the single site should only be allowed if the home is, in some real sense, the centre or base of the business."
When driving to and from site you may claim up to the government set rate for each mile travelled, this is currently 45p per mile. If you do more than 10,000 miles in any tax year (April to April) this then reduces to 25p per mile. You must complete your expense form detailing your start location, end location and number of miles. We will check and verify mileage claims against auto-routing software. If you have to take a longer route for any reason, please indicate this on your claim form e.g. road works.
The mileage rate covers the costs of running and maintaining the vehicle, such as fuel, oil, servicing, repairs, insurance, vehicle excise duty and MOT.
You can only claim the amount per mile basis for journeys that are wholly and exclusively for business purposes.
You can claim the cost of your train/bus fare but you need to detail your start location on the expenses claim form and submit a COPY of the receipt which details clearly the date and amount paid.
If using an Oyster or travel card, we will not be able to reimburse the total cost paid out if you have used this card to travel for any other purposes other than to perform your trade. Where possible (mainly for Oyster cards) we need an itemised list of activity which you can get online.
Subsistence – food and drink
Claims for food and drink can only be made if you are not working close to your home. There is little guidance on how close or far away you have to be to qualify but as a general rule, if you could get home, eat lunch and get back to work during your lunch break, it would be difficult to demonstrate the expense was incurred wholly and exclusively in the performance of your trade.
s.34 of ITTOIA 2005 also stipulates that food and drink can only be claimed if you do not travel to the place more than occasionally and the expense is either not part of the usual pattern of travel or that there is no regular pattern of travel. This would follow the same approach as travel.
All subsistence claims must correspond to a business journey, whether or not a travel expense claim is made in relation to that business journey. This means that an expense must be incurred on the day of travel and not in advance of the date of travel i.e. bread and filling obtained as part of a weekly shopping trip.
Please send AmberPay COPIES of all receipts relating to claims for subsistence.
Where your trade requires you to stay away from your home you may claim the cost of the room, dinner and breakfast. You must provide a receipt clearly detailing the date and complete your claim form detailing where you stayed.
You cannot claim accommodation where you are not working the next day or could reasonably return home and all claims must be reasonable and not excessive.
Tools and Materials
Where it is necessary for you to purchase tools and materials for the performance of your trade you may be able to claim the expense providing you send us a copy of your receipt which clearly identifies the item and the cost. Only tools and materials purchased for sole use in the performance of your trade may be reimbursed and once reimbursed belong to the company unless or until otherwise notified.
Home working Allowance
The home working allowances enables an engager may make a payment to a home workers to cover the extra light and heat costs of home working, with no requirement to provide any records of any actual expense incurred.
Any amounts in addition to this rate for working from home should be claimed in your annual Self Assessment Tax Return.
If you have legitimately worked from home you should include either a weekly or monthly submission on your expenses claim form or if will always apply please inform us and we can process these automaticaly.
PAYMENT OF EXPENSES
Legitimate expenses are not paid as an additional sum on top of the amount received by Amberpay Limited, but are deducted from your payment before calculation of statutory deductions. This enables you to obtain tax and NIC relief for these expenses. If your expense form covers several weeks it may not all be reimbursed in the same week and they may be carried forward each week until all the expenses have been allocated.
HMRC have a page on their website titled "Tax allowances and reliefs if you're self-employed" which explains various reliefs, allowances and expenses you can claim to reduce your tax bill. Amberpay is not able to process all of these in relation to your payment, you may be able to claim these additional expenses not already claimed when you complete your annual Self Assessment Tax Return. http://www.hmrc.gov.uk/incometax/relief-self-emp.htm (2014)
Amberpay Limited is not obliged to
If you have any questions about the expenses you can claim or how to fill out the claim for please contact one of the team on 01624 815189 or 0333 3356060.