Originally posted by kennygratts
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For example:
1. You work 20 days at £400 – the umbrella has a £8,000 pool to work with.
2. The Umbrella then refunds your expenses, £4,000 in your first month, reducing the pool to £4,000
3. The Umbrella takes their cut, plus Employers NI etc., this reduces the pool to say £3,000
4. You pay tax on the remaining pool i.e. £3,000
Assuming you claimed 120,000 miles:
First 10,000 @40p plus 110,000 @25p = £31,500
Less what you might have been able to claim (24,000 miles)
First 10,000 @40p plus 14,000 @25p = £7,500
So you may have received between £24,000 and £31,500 tax free depending if expenses are payable, you need to account for your personal tax liability.
You may also have to recalculate Employers contributions as well, but this is where it gets difficult, some umbrellas have been found to be playing fast & loose with steps 2 & 3 above. Calculating Employers contributions before reimbursing expenses, then pocketing the difference. You need professional advice here
Originally posted by kennygratts
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Originally posted by kennygratts
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At best you've underpaid tax, at worst you've committed fraud & underpaid tax & you still have no idea why HMRC would be interested
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