Tax Tip - Week - 1 - Tax Free Subsistence Payments
Welcome to the new tax year for 2009-10, and what a way to start !
ContractorUKreported on the fact that the new HMRC advisory subsistence scale rateshave been published on 2nd April.
Most of their article referred to theimpact on Umbrella Companies who will now have to apply these rates,but for Professional Contractors and Freelancers who run their ownLimited Companies are also employees from a tax perspective these newrules apply to a Limited Company, and so we are presented with a newtax year and a new tax planning opportunity.
There is plenty of tax saving for all Professional Contractors andFreelancers working on a temporary work site, so the new tax yearstarts with a great tax tip, that can save you tax for the whole of the2009-10 tax year.
Professional Contractors and Freelancers can save tax in 2009-10 by applying the HMRC benchmark advisory scale rates for subsistence.
For some directors of their own Limited Companies working for 44 weeks a year and paying Higher rate Tax this could provide a tax saving of £440 per year where you are working for at least five hours a day inlcuding travelling, and £880 a year where you are working for at least 10 hours a day including travelling.
For full details of the conditions that you need to meet in order to apply these new scale rates then please see our article on Subsistence Payments.