Dispensations

[LisaContractorUmbrella]

Originally Posted by downnout

Does anyone know anything about Tarpons dispensation?

It would be unlikely that Tarpon would have a dispensation at all as they are a newly established company. Mind you whatever it contains you should remember that it will be for their benefit, not yours. You will need to keep receipts for any expenses claimed and you can only claim to the value of those receipts; just because your umbrella company's dispensation has a limit for accomodation of £95 per night it does not mean you can claim that amount if you have only spent £50.

[haorenyishengpingan]

If a non-UK resident comes to the England to work as contractor in the UK office of a multi-national corporation for 6-12 months, can he claim the rent of accommodation in the UK and daily subsistence, since he works away from his home country.

Is there any minimum daily subsistence allowance permitted by inland revenue without the need to keep a receipt? Note that what I mean is different from dispensation. The latter one indeed needs a receipt, even though the umbrella companies never see it.

[Cowboy Bob]

Originally Posted by haorenyishengpingan

If a non-UK resident comes to the England to work as contractor in the UK office of a multi-national corporation for 6-12 months, can he claim the rent of accommodation in the UK and daily subsistence, since he works away from his home country.

Is there any minimum daily subsistence allowance permitted by inland revenue without the need to keep a receipt? Note that what I mean is different from dispensation. The latter one indeed needs a receipt, even though the umbrella companies never see it.

No and no.

HTH

[can1605]

This is very interesting indeed

I recently signed up to an umbrella company for the first time (I had used ltd before but my current contract is within IR35). I was considering just being paid PAYE direct by the agent but went umbrella becuase I wanted to get tax relief on the expenses I was incurring

I was given a load of patter on dispensations and about being able to claim daily allowances, without receipts, for food (£5 if I left home before 7am, £15 if working over 10 hours etc etc) I signed up to the umbrella on this basis. I later found out through my own research (and it is confirmed by what I've read on this thread) that the notion of unreceipted expenses is very misleading and that should I be investigated I would need to substantiate any daily subsistence claim

I feel like I've been misled in order to get me signed up and won't be using this company again when my contract. I think that anyway umbrella company using the term 'dispensation' as an advertising tool to get people on board should be forced by HMRC to disclose what this term actually means - it's something of convenience to them and not the contractor

[original PM]

see the other Thread entitled Umbrellas Doomed

Umbrellas use the maximums allowed by the dispensation to artificially inflate your expected take home pay (just take a look around all of the calculators they have on their websites).

When you get your first payment it is not what you expected - but by then you are already tied into that brolly company and it is a pain to leave.

All brollies will give you exactly the same return for the same invoice value and expenses value assuming the same tax code - the only difference is the fee they charge.

The dispensation is not a sales tool and does not set amounts that you can claim - what it does is allow the brolly to pay you expenses for certain items up to certain levels without the need for them to see your receipts (if HMRC come knocking you will need to show your receipts).

[Maloty]

[quote=To BI or not to BI?;163368]Funny enough, I questioned the legitimacy of the subsistence claims and was told that (a) I don't need receipts and (b) I don't have to incur the cost. Only when I asked the (c) question answers (a) and (b) changed to:
(a) I can claim substinence only if I incur the cost
(b) I should keep receipts because if I am investigated they won't be responsible for any extra taxes, interests and possible fines to pay

So I guess this settles it (see also http://forums.contractoruk.com/thread12666.html for more details)
I am off to set up my own Ltd[/QUOT

So which umbrella was it... your info is no good unless we know who it is!

[Maloty]

Regardless of their dispensation, if you join Tarpon you will need every bit of help possible... look at their fee structure!!

See the livechat transcript below..... hilarious! It makes good reading

__________________________________________________ ____________

Please wait for a site operator to respond.

You are now chatting with 'Kelly'

Kelly: Hi Mark, how can I help?

Mark Thompson: Hi Kelly, I have 7 contractors who were previously working through an umbrella that has gone under and looking for a replacment.

Mark Thompson: hello?

Kelly: Sure, would you like one of our advisors to give you a call to discuss further?

Mark Thompson: I'm on the train at the moment. Could you tell me what fee's they will pay please.

Kelly: Our fees are based on their hourly/daily rate and are applied on each invoice. Hence no work done no charge, what are their rates please?

Mark Thompson: They differ...

Mark Thompson: I have 2 guys on £15 an hour

Mark Thompson: 1 on £11

Mark Thompson: 1 on £800 a day

Mark Thompson: I'll have to check the others but they are somewhere between.

Kelly: Ok, £800 daily will be 6% gross (4% net as it's deducted before calculating tax and NI) £15 per hour 8% gross (5.36% net) and £11 per hour 10% gross (6.7% net) The fee includes a total of £20 M insurance cover, the services of a personal Business Manager + much more. Is there an e-mail address where I can send you more info?

Mark Thompson: Right ok...

Mark Thompson: email is markthompson321@hotmail.co.uk

Mark Thompson: why is there different fee's for different people?

Mark Thompson: Hello?

Kelly: Thanks Mark, I will ensure that an info pack is e-mailed over to you today. Fees are applied according to our structure, unable to give you more details on that sorry! Should you need to get in touch again, perhaps for a calculation for each one of your contractors please feel free to use the contact details on the e-mail you will be receiving shortly!

Mark Thompson: I don't understand how I would explain this to the guys? Do you not have a set fee?

Mark Thompson: I would have one guy on £11 an hour paying £2112 a year, and one guy on £800 a day paying £11,520 a year???

Mark Thompson: Other umbrellas are charging between £20 and £30 a week???

Chat session has ended.


{removed bu CUK}


Please wait for a site operator to respond.
You are now chatting with 'Kelly'

Mark Thompson: Hi Kelly, not sure if I lost signal

Kelly: Hi Mark, sorry I seem to have lost you! I'm back now...we offer a second to none customer service on the market and feel that the fee structure has been working well for us and our contractors. Please feel free to reply to our e-mail with further queries should you need to do so.

Mark Thompson: Right ok?... It doesn't sound like it would be something the lads would be too keen on to be honest, I'm just trying to look out for their best interests. £11k is quite a lot in fee's, I think they would prefer one of the others, they seem to work out about £10k a year less.

Mark Thompson: Thanks for your time though Kelly.

Kelly: Nice chatting to you too Mark, an e-mail is on its way to you.

Mark Thompson: Ta

[dave20]

Don't get a company! Stay self employed!

[PayMatters]

From next tax year HMRC are proposing (as confirmed by our accountants) to make expense scale rate dispensations available to all umbrella companies (without having to go through an application process based upon previous payments/receipts).

This should make it more of even playing field between umbrella companies.

The dispensations are expected to be less than those currently offered by some Umbrella Companies i.e. food and drink up to £10 per day. Also criteria are expected to be harsher i.e. you only qualify for Breakfast if you leave your house prior to 6am. Higher costs would be allowed with receipted evidence.

An employer will not need to apply to HMRC to specifically use the standard scale rates, but will be required to indicate that they will use the rates by completing form P11DX.

[PayMatters]

Please find attched the release from HMRC opening up scale rate dispensations for all (and potentially removing ones currently offered by some, as over time you would expect HMRC to expect scale rates to be in line with their policy unless exceptional circumstances exist?).

HMRC Scale Rate Dispensations

Even with Scale Rate dispensations it will still be best practice to send in your receipts to verify that you have incurred expenses you're claiming for. A good Umbrella will store these for 7 years to ensure you cannot be accused of any false claims.