Contractor expenses to client

[witko999]

I've been an engineering contractor for several years, and very recently started working for a new client (outside IR35).

The nature of my work means that I rarely need to charge expenses to my clients, so I'm not sure what is 'normal'. However, the new client is a bit different from my previous ones.

They want me to travel overseas for a week or so, and I want to know what I can reasonably charge back to them. Obviously I will invoice them for expensive costs such as flights and accommodation etc. What about other costs like subsistence, taxis, parking? I could quite easily spend a few hundred on food etc. Is it normal to charge literally everything back to the client, or should I expect to foot some of the bill as the cost of doing business?

I bill hourly. Should I be billing for hours worked + hours spent travelling?

There's no contract in place covering expenses/reimbursement and it hasn't been discussed either. The trip was sprung on me pretty last minute.

[GT03ROB]

I would expect to bill for hours spent travelling up to a normal working day.

In the absence of any agreement I would expect then to bill expenses on an actual & reasonable basis.

Either way get the basis agreed before you go.

[witko999]

GT03ROB said:

I would expect to bill for hours spent travelling up to a normal working day.

In the absence of any agreement I would expect then to bill expenses on an actual & reasonable basis.

Either way get the basis agreed before you go.

OK, what about if I end up doing an 8hr working day and then have eg. 4hrs travelling on top? Is it reasonable to bill for 12hrs?

Just to clarify, I'm not looking to make money or take advantage, just don't want to end up out of pocket.

[witko999]

CheesecakeRunner said:

Does the client have a travel expense policy for their permies? That might be a reasonable starting point. For example, if they normally only fly economy, you billing for business might not go down well.

I don't know is the answer. I've literally just started working with them and have never met anyone other than 1 person. I'm also fully remote and their site is located elsewhere in the country.

I'll be flying short haul economy so not looking to take advantage there.

[mikef]

I've done a lot of overseas contracting in my time. I've never billed for travelling time, which was often on weekends. I have always charged for travel to airport, airport parking (if not taking a taxi), fares (although often the client pays those directly), hotel (same), meals (excluding any alcohol) while travelling. I agree it's useful to see their staff travel expenses policy, in so far as that gives a guideline, but as a contractor I will spend what is reasonable. I've never had expense claims turned down or rejected.

You may also want to check reimbursement turnaround times, typically you'd want reimbursement in time to pay your credit card bills, which may well be sooner than time to pay fee invoices

[Pit Pony]

You are NOT an employee, you are a supplier.

Your purchase order, backed up by contract, does not cover this new service.

So you need to get in writing what your Ltd company feels is appropriate.

For instance. I dealt with an automation supplier a few years back. For site visits for services outside of warranty, such as modifications, they charged £2 a mile, plus £80 an hour once on site, plus materials at cost plus 20%. That was their price. Not an expense,because their employee, wasn't employed by us.

You are not employed by your client. You are employed by your Ltd company. Scale up your company in your head. Imagine, you are employing a consultant. What would your Ltd company charge.

This is what I would charge :
Taxi cost at cost, plus admin of 5% for arranging it,
Airport parking at cost plus admin of 5%
55p a mile for using my own car (my Ltd company would pay m 45p
For flights and trains less than 4 hours, the most convenient flight cost with cancellation plus admin of 5%
For more than 4 hours, business class.
Travel insurance at cost plus 5%
All travel time, until I check into my hotel paid at the agreed hourly rate. Or from the time I leave my hotel.

A few years ago, (10 ?) whilst working as a consultant for an areospace company based in the East Midlands I was asked if I could go to thier sister site in Berlin. The hiring manager didn't have time to organise getting approval from above, so we came to an unwritten agreement.
I'd charge all hours including travel to the client, and calculate my costs, and divide them by my hourly rate and then add the number of hours to my invoices over the next 3 weeks. I attempted to show him what I'd spent, but he just said "I trust you" but I don't think I could operate like that now.

[witko999]

Thanks all. Some good information here.

[Giantt]

Tell them what YOU want then leave them to decide,is it actually worth your while going?
Business travel, business class,forget economy you want to arrive rested and ready to go

[Actual]

I avoid all work and business travel. Hopefully I would not be out of pocket and on some occasions could make a little off the daily allowance but this did not compensate for travelling on my own time and being stuck in a hotel on my own time. Restuarant meals get really tedious after a few days. For some reason employers and even employees think travel is perk. I should have charged for every minute I was away from home.

There was never any job I really needed to travel for as all my work could be done from home over a VPN and much more efficiently too. Turn up on a customer's site for a big upgrade and the only screen is my tiny notebook computer screen but from home I have a full trading desk ready to go.

[Mr Pointy]

Actual said:

I avoid all work and business travel. Hopefully I would not be out of pocket and on some occasions could make a little off the daily allowance but this did not compensate for travelling on my own time and being stuck in a hotel on my own time. Restuarant meals get really tedious after a few days. For some reason employers and even employees think travel is perk. I should have charged for every minute I was away from home.

There was never any job I really needed to travel for as all my work could be done from home over a VPN and much more efficiently too. Turn up on a customer's site for a big upgrade and the only screen is my tiny notebook computer screen but from home I have a full trading desk ready to go.

As a contrast to that we discovered that getting developers on site is hugely beneifical as it enable much quicker resolution of of issues. They hated it but we got problems resolved ten times faster.

[Countdown]

As a Contractor would you not provide a single quote which covers everything e.g.

Costs of travel
Travel time
Subsistence

[Time4another]

Prior to visitting any of our customers they are quoted, post visit they are then invoiced the actual costs.

Travel to site - Charged from home to hotel at a travelling rate which is half our basic site rate.
Flights - Whatever they cost, including baggage etc.
Hire car - Per day charge.
Fuel - Any fuel used.
Hotel - Per night charge
Sustenance - €52.62 (Not sure if this is a tax thing)
hours worked - Hours on site. Different rates depending on overtime, weekends, night shifts.
Return home travel - Charged from hotel until home.

Any other costs we pick up the bill.

Have some customers who moan about some costs, have others who wouldn't flinch if the costs were double.

[wombleh]

Depends on the client, we tend to quote excluding expenses with a statement indicating "typical" costs, then add to invoice at the end, but with an option to include the travel costs as a line item on quote/invoice if they prefer, with the proviso that it's based on an estimate and may be higher. If the company has decided on their own policy for staff travel expenses already then I'd try to line up with that (cost-wise) to keep them happy.

If on hour/day rate then I'd be looking to treat time spent travelling as working hours that are billable. If billing on the job then I'd just account for it in the original estimate. That'd include all food/travel/hotels/etc.

Edited by wombleh on Monday 10th June 16:29

[Eric Mc]

witko999 said:

CheesecakeRunner said:

Does the client have a travel expense policy for their permies? That might be a reasonable starting point. For example, if they normally only fly economy, you billing for business might not go down well.

I don't know is the answer. I've literally just started working with them and have never met anyone other than 1 person. I'm also fully remote and their site is located elsewhere in the country.

I'll be flying short haul economy so not looking to take advantage there.

As an outside contractor, you are not a "permie" (of course) and in order to protect yourself from any risk of being challenged by HMRC on this score, I would NOT be looking at what the "permies" do in relation to claiming their expenses from their employer.

You are not in an "employer/employee" relationship. You are in a business to business relationship and that should be emphasised in everything you do, including in the way you raise invoices.

As a person who runs my own business, I very rarely charge expenses to my clients/customers. On the odd occasion that I do, I will add them to the foot of my basic invoice as an extra charge on top of the charge for my time.

If you are VAT registered, you need to be very careful about how you treat VAT on recharged business expenses.

[Mortarboard]

Direct or indirect contractor?

If direct, it's up to negotiation between you and the client.

If indirect, it's up to negotiation (or as already agreed) with your client's supplier.

I used to do associate consultancy for a large consultancy firm (i.e. they used me to fill gaps in their normal area of expertise). I charged them my expenses, what they chose to pass on (or not, or add a management fee to) was entirely up to them.

M.

[EmilA]

Can't see a mention of scale rates, this may apply to you aswell so have a look.

https://www.gov.uk/guidance/expenses-rates-for-emp...

[Blown2CV]

what accommodation for expenses recharge is declared in the contract you both signed?

[PorkInsider]

EmilA said:

Can't see a mention of scale rates, this may apply to you aswell so have a look.

https://www.gov.uk/guidance/expenses-rates-for-emp...

OP isn't an employee.

[witko999]

Thanks all.

As it happens costs to my company were minimal as client paid for pretty much everything whilst over there. I'll only need to bill for the flights so will do so on my next invoice.