Charging clients expenses?(7 Posts)
So, clever freelancing MNers, what do you do about charging expenses?
As part of the work I'm doing for one of my clients, I seem to be driving all over the place for meetings and briefs, which obviously is an expense to my business. During March, This month this has totalled around £200 or thereabouts, but what would you do? Take those expenses and charge the client and be taxed on the whole payment, or not charge them and deduct them from the tax you'd pay on the invoice amount, which would obviously be £200 less?
I'm favouring the latter, as this way my client pays even if I get taxed on it (and they invoice their client for them anyway) and I'm not out of pocket, but I'd be grateful to know what the accountancy folk would suggest...
Thanks in advance, a slightly puzzled, head-scratching CW
I charge for " reasonable expenses" while working for my clients such as phone calls etc but I don't charge for going to meetings with my clients.
I have one client who asks me to visit HIS client and I do charge expenses for that.
Can't you take briefs etc over the phone or email or webinar rather than in person?
Of course you should be deducting all mileage etc ( I use 40p per mile) before calculating any tax due.
What you describe is pretty much what I do. I don't charge for phone calls or for visiting my client, only when I have to travel to attend my client's clients' meetings. Does that make sense?
I've just invoiced my client for last month's work and included my expenses, including car travel and train travel, parking etc. They've asked the question about whether I include expenses and be taxed on the whole amount (my invoice amount plus expenses) or I invoice purely for the work, and I deduct my expenses from that before I pay tax. Does that make sense?
I think so but I'm unsure as to why they ask you what or how you are taxed. Nobody has ever asked me that.
Sorry if I'm Being a bit dense here!
I charge for 'extra' expenses - in the same way you do, I don't charge expenses for 'my' meetings but do for 'their' meetings iyswim. I also make it very clear to my clients that I will charge a full day for a face to face meeting, rather than by the hour or whatever else we've agreed.
I then deduct my expenses when I do my tax return - they are still a cost to my business.
I've never had a client ask that question though - I'm struggling to see what on earth it's got to do with them? I think sometimes there's a VAT implication but iirc, you won't be VAT registered yet?
Thanks Wilson and Hopping, much appreciated.
The only reason they asked is one of the directors was freelance for a while, did her own accounts and thought she was being 'helpful'. I'll stick with my original plan which was to invoice them for the costs I incurred (parking, train travel, mileage, etc).
Doesn't it depend on what your contract with them says? I used to list my hourly/daily rate then additional costs: travel and at public transport rate or car mileage, printing mega size reports ( rarely as I would email the docs), etc
I think you need to clarify with the client. But if they are actual costs then they are deductible
Join the discussion
Registering is free, easy, and means you can join in the discussion, watch threads, get discounts, win prizes and lots more.Register now »
Already registered? Log in with:
Please login first.