Dispensations

[LisaContractorUmbrella]

Hi Everyone,

We are asked about umbrella company dispensations almost every day so I thought I would add something here to try and help clarify the situation.

All umbrella companies have dispensations - if we didn't we would spend all our time filling in forms for the Inland Revenue Normally when expenses are paid the accountant is required to complete a P11D; a dispensation just means that this will not be necessary for those expenses which it covers.

An umbrella company's dispensation does not dictate what expenses you can or cannot claim. It is merely a list of expenses that your umbrella company is not compelled to record on a P11D.

If the dispensation has specific figures on it for different types of expenses it does not mean that you can claim up to that amount regardless of what you spend. e.g. if accomodation is shown as £95 per night it does not mean you can claim £95 if you have only spent £60.

If you claim expenses you will definitely and without question need to keep receipts - a dispensation means that your umbrella company does not have to present receipts to the Inland Revenue, it does not mean that you don't need them. And it will be you that will be penalised if you falsify expense claims and not your umbrella company!

Hope this helps

[ASB]

Or just insert fingers in ear, find some water to push up hill and say "la la I can't hear you".

[Nixon Williams]

Totally agree with what you have said Lisa, sadly many umbrella's do not tell the full story and let clients assume that they can claim upto the limits on the dispensation.

Alan

[Pondlife]

Can we have a sticky for this please?

[Ardesco]

You'll still get idiots saying "LA LA LA don't belive you, contractor umbrella and Nixon Williams are just trying to get business. I get £XXX in expenses and my umbrella says it is fine LA LA LA"

[ASB]

Originally Posted by Pondlife

Can we have a sticky for this please?

Perhaps this one? http://forums.contractoruk.com/thread11349.html

[Nixon Williams]

Originally Posted by Ardesco

You'll still get idiots saying "LA LA LA don't belive you, contractor umbrella and Nixon Williams are just trying to get business. I get £XXX in expenses and my umbrella says it is fine LA LA LA"

That sounds great, ask for confirmation in writing from your umbrella that (a) you do not need receipts, (b) you do not have to actually incur the cost and (c) that they will pick up the tax bill if the Revenue investigate and find disallow the ghost expenses.

Alan

[Ardesco]

Originally Posted by Nixon Williams

That sounds great, ask for confirmation in writing from your umbrella that (a) you do not need receipts, (b) you do not have to actually incur the cost and (c) that they will pick up the tax bill if the Revenue investigate and find disallow the ghost expenses.

Alan

I've asked people for information like this before, but the problem is the kind of person who refuses to listen to the advice given out on this board (or at least investigate it) Is the kind of person that will belive what thier umbrella says over the phone and think that everything is fine, even if said umbrella won't provide it in writing.

To be honest not much hope for them....

[Waldorf]

I once beleived in an umbrella, non believer now

[To BI or not to BI?]

Originally Posted by Nixon Williams

That sounds great, ask for confirmation in writing from your umbrella that (a) you do not need receipts, (b) you do not have to actually incur the cost and (c) that they will pick up the tax bill if the Revenue investigate and find disallow the ghost expenses.

Alan

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