Umbrella company problem with expenses (+£25K owed)

[kennygratts]

Hi All

To cut a long story short ... was with my umbrella company for a year working on a contract the other side of the country. So was entering my weekly travel expenses which were being checked/approved against valid petrol receipts (or so I thought) by my umbrella company "account manager".

Now the contract has just finished, been informed by my umbrella company that I was incorrectly entering my travel for the period of the contract. Which is correct, using their online portal system I had accidentally specified 500 miles a DAY rather then 500 miles a WEEK.

Now being told by the umbrella company that I effectively owe +£25K...

Help. Any thoughts/advice welcome. I accept that I made the mistake, but equally the umbrella company must surely take some responsibility for the fact that they have been blindly approving my travel expenses, and have never reconciled my petrol receipts against actual mileage claimed .. otherwise would have been obvious that was a discrepancy. Since they were approved each and every week I made the mistaken assumption they were fine.

Is there anything I can do, or am I fully responsible? As my employer is there any legal redress for the fact that they have not been checking/reconciling my expenses or is this totally down to myself for entering them "wrong".

Also any ideas on what options I have if indeed I am fully culpable for the £25K overpayment.

Not been a good day!

[Magpie252]

Are you serious? Something didn’t twig when they refunded £4,000 in the first month for travel expenses

Bottom line here, when you enter your expenses you certify that they are correct, while the umbrella should have spotted this, this is your responsibility.

You will have to at least refund the money on paper, then take the £25K as taxable income, so your liability is the tax on £25K, not the full £25K

And before NLUK come along, hope this isn’t your only contract, as you shouldn’t have been claiming travel expenses

[TheFaQQer]

If you've wrongly claimed the money, then you need to repay it. If you haven't got the money, then you need to discuss this with your employer ASAP and sort out how to repay it.

You might also want to read the recent court case where the KPMG consultant was charged with fraud because he accidentally claimed multiple times for the same expenses - details here.

[TheFaQQer]

I assume that you didn't spot that after a few months the rate changed significantly as you were claiming 2500 miles a week which would hit the expenses threshold pretty quickly.

[stek]

Another poor sockie attempt...

[kennygratts]

Yes I am serious.

No I didn't notice unfortunately, yeah my screw up. But equally the umbrella company have blindly approved every one of those expense claims .. is that irrelevant? I am rather ignorant when comes to finance, and took it on trust that everything was good and only looked at my monthly pay without drilling down.

The fact that the umbrella company had full knowledge of my home address and place of work plus my weekly mileage led me to the stupid assumption that since they were approving the expenses and cross checking (( thought) petrol receipts against mileage all was good. I even specifically asked them if what I was doing was correct, and as never got a response took it as acceptance was fine.

The umbrella company are still "doing the sums", but they are saying the figure is "at least +£25K". I don't have that kind of money so no idea what that means in black and white. Do I have to get that money and repay?

Was my only contract, which has now ended so out of work with no income or savings.

The travel expenses were legitimate as I was working away from home, it was simply the fact that over-claimed in error.

No idea where I stand legally and exactly what to do going forward.

[TheFaQQer]

Do I have to get that money and repay?

Yes

Was my only contract, which has now ended so out of work with no income or savings.

The travel expenses were legitimate as I was working away from home, it was simply the fact that over-claimed in error.

If it was your only assignment, then it's even worse for you. The workplace wasn't temporary, so you cannot legally claim travel and subsistence expenses. You need to repay all of the illegally claimed expenses and sort out the tax situation of what was effectively an undeclared interest free loan.

No idea where I stand legally and exactly what to do going forward.

Best case scenario is that you arrange a repayment plan, repay all the expenses that were illegally claimed, and nothing more is said.

Worst case scenario is that the umbrella company call the police, you get done for fraud for the stolen money, still have to repay all the expenses, and HMRC then take an interest in what they see as your tax fraud for illegally claiming the expenses.

I'd start by looking into the price of a good quality lubricant if I were you.

[kennygratts]

I can claim travel/accommodation... the workplace was temporary as was a short-term contract so that isn't in dispute.

I am simply asking if I have any legal redress against the umbrella company as they were effectively my employer, or is negligence on there behalf something that I can do nothing about.

Likewise what my options are legally/financially.

Rather than providing flippant comments and making a joke of it TheFaQQer, f you can't actual provide something useful keep the comments to yourself.

[DiscoStu]

I can claim travel/accommodation... the workplace was temporary as was a short-term contract so that isn't in dispute.

I am simply asking if I have any legal redress against the umbrella company as they were effectively my employer, or is negligence on there behalf something that I can do nothing about.

Likewise what my options are legally/financially.

Rather than providing flippant comments and making a joke of it TheFaQQer, f you can't actual provide something useful keep the comments to yourself.

He's not being flippant, what he's written is entirely correct.

I've bolded the relevant section below:

ESM2030 - Overarching Contracts of Employment

Background
An overarching contract of employment links together a series of separate assignments so that each location of each assignment becomes a temporary workplace. A temporary worker effectively becomes a permanent employee of the employment business under an overarching contract of employment.

Temporary workers, traditionally engaged under agency contracts and caught by the agency legislation, are not entitled to relief for payment of travel and subsistence expenses, including home to work travel to a client's work premises, as each assignment is deemed to be a separate employment and so each new place of work becomes a permanent workplace.

Many employment businesses and umbrella companies have changed their business model by looking to implement an overarching contract of employment. If it is accepted that contracts are overarching contracts of employment, then each new place of work usually becomes a temporary workplace (subject to the “24 month rule” - see Employment Income Manual EIM32080) and the individuals travel and subsistence expenses would qualify for relief under the travel rules. The employment businesses then apply for a dispensation to include the travel and subsistence payments. (See guidance relating to dispensations in the Employment Income Manual at EIM30050 onwards and in the Compliance Operational Guidance (COG) manual COG907080.

As travel expenses are only allowable once more than one assignment has been linked under an overarching contract a single assignment would automatically become a permanent workplace.

[stek]

I can claim travel/accommodation... the workplace was temporary as was a short-term contract so that isn't in dispute.

I am simply asking if I have any legal redress against the umbrella company as they were effectively my employer, or is negligence on there behalf something that I can do nothing about.

Likewise what my options are legally/financially.

Rather than providing flippant comments and making a joke of it TheFaQQer, f you can't actual provide something useful keep the comments to yourself.

I can't see where the brolly is at fault here, the error is entirely yours.

Imagine if you'd been underpaid, would you feel the same?