Reimbursed expenses

Hi, I'm sometimes being reimbursed for project-related expenses by my clients. That is, I'm paying for something and then getting the amount back from my client. What would be the best way of recording these transactions? Also, can I claim these reimbursed expenses for tax relief? If I do not claim these reimbursed expenses for tax relief, and *do* record the reimbursement from my client as an income - I will pay more tax than I should I believe. Also, do I need to invoice my client for these expenses? I hope my question is clear enough. I will be happy to make it clearer if it isn't. Thanks, 

Hi,
 

Please note that re-imbursed expenses should be taken into account  when calculating your total self-employed income. If however some or all of the reimbursed expenses are 'allowable', you can of course include them as deductible expenses :.    HS222 How to calculate your taxable profits (2020)   . Thank you.

Thank you

This is also my question. So say I am charging £200 for my time and £50 for my train fare, which the company have agreed to pay. I include £250 on my total income amount on my tax return. Can I also include the £50 on the expenses total amount even though I am not out of pocket for that amount as it was reimbursed to me on my invoice? Thanks

Hi,

You would need to declare the whole amount paid to you as turnover and claim expenses for travel, subject to the rules on travel expenses.

Expenses if you're self-employed

Thank you.

That's also my question - are reimbursed travel expenses meant to be included in the turnover (total income before expenses) even when earnings aren't high enough to be taxable, and therefore can't claim expenses? So I earn well below the Personal Allowance and the Small Profits Threshold, so I can't claim expenses. Sometimes my clients reimburse the cost of travel to get to them (usually bus or taxi), so the travel expense is cancelled out - there's no profit from the reimbursement. Should those reimbursements be added to the total income? (Using cash basis)

Hi
Yes.  
If a client pays your expenses, this is profit to be added to your gross profit.  
You would also claim expenses for the travel.

Hi I offer legal services as an agent for law firms and once this service has concluded I invoice the firm for the cost of legal services, mileage and parking fees. I am registered as self employed so when completing my tax returns should I include my income as the total of what I have received including my charges for legal services, mileage and parking or should mileage and parking be excluded? If parking and mileage should be included as my income, should I then also claim mileage and parking as an expense? My second question is that should I only be declaring my income for invoices I have been paid for within the financial year or should it also be for invoices I have sent in the financial year but have been paid in the following financial year. Thanks

Hi ! I'm travelling for work and my company has reimbursed me for some of the visa costs related to travel that I had to pay out of pocket at the time. Do I need to declare this reimbursement / will I be taxed for this reimbursement?

Hi, My client has a small accommodation benefit for being able to use a property for 2 weeks a year. I have made sure that the employee contribution is more than adequate to offset the BIK calculated in accordance with ITEPA 2003. Does this still need reporting on the P11D, and is there an exposure to penalties is it isn't (given no P11D is currently submitted) as there is no Potential Lost Revenue. Many thanks

Hi SH.123 Hussain,

You should include the total income you claim on the invoice and then claim the mileage and parking as expenses if these were solely work related.

What you declare depends on whether you are using cash basis or traditional accounting for your accounts. You can see guidance here:

Cash basis

Thank you.

Hi Fk02,
No, for both,
Thank you. 

Hi Rob,

As you have provided a benefit, this should be reported on P11D, you may still incur a penalty for late filing.

Thank you.

Hello, I have to travel to different locations for my work and my mileage for this travel is reimbursed at 45p per mile by my employer. The mileage that is reimbursed is paid with my salary as income. Therefore tax and National Insurance (i assume) is deducted from my mileage expense. I don't think this is right and tax and N.I should not be taken off my mileage expenses. Can i get the tax and N.I back? Thanks

Hi AadilH,
The mileage allowance payments made by your employer, to you, for using your own car, that meet the qualifying amount, should not have tax or NIC deducted by your employer.
Any amount above the qualifying amount should have tax and NIC deducted.
Please see: 
Expenses and benefits: business travel mileage for employees' own vehicles
Thank you. 

Hi HMRC Admin, Thanks for your reply. I will need to check what my employer has done. IF my employer has taken tax and NIC from my mileage expenses. Is there anyway I can get this back and how? Thanks

Hi AadilH,
You would need to provide evidence that this has happened and submit a claim to HMRC for review.
Thank you. 

Hi HMRC Admin, I need to complete a self-assessment to pay the high income child benefit charge for 22/23. I currently work for a research institution via an umbrella company who are technically my employer. I was reimbursed for a £75 professional course fee. Do I need to include this anywhere on my self-assessment? Is it a benefit? Is it an expense payment? Is it an employment expense? Can I just ignore it? Thanks

Hi,

If skills learned through this course were necessary for you to continue in your employment, then it would exempt from tax.

As your employer reimbursed you the cost of the course, you have had 100% relief on it's cost. As it was fully paid for by your employer, there is no need for you to declare it on your return.

Thank you.

Hello, As a director of my own limited company, I normally claim the allowable expenses such as mileage, use of home and subsistence; and then pay it back to my personal account. This is more or less clear. My question is: Would it be acceptable to include all these expenses in my Self Assessment and claim tax relief on them? The tricky part is all these expenses are already taken through my limited company profit and loss, and company is receiving tax. On the other hand, it doesn't stop these expenses from being the "allowable expenses". Can anybody clarify this please, what specific rules apply? Thank you.