Expenses for one night a week at client

[Dboy]

I'm just dipping my toe back into contracting and I'm horrified to see the changes to allowed expenses due to come in in April.

I'm looking at a contract where I would work at home but visit my client for 1-2 days a week.
Would any travel and subsistence be allowable before/after April?

Also I'm probably going down the umbrella route for now. I only wound up my Ltd Co a year ago...

[mudskipper]

I'm just dipping my toe back into contracting and I'm horrified to see the changes to allowed expenses due to come in in April.

I'm looking at a contract where I would work at home but visit my client for 1-2 days a week.
Would any travel and subsistence be allowable before/after April?

Also I'm probably going down the umbrella route for now. I only wound up my Ltd Co a year ago...

After April, under a brolly, expenses to the "permanent workplace" of the gig won't be allowed if you are subject to supervision, direction or control.

The consultation considers the workplace to be permanent if the worker:

"Goes to the same workplace for all or almost all of the time for which the worker is likely to hold, or continues to hold, the same employment. This will normally be the case if the worker is employed to work at one place on a fixed term contract, for example."


So it comes down to whether you can argue that the permanent workplace is not the client office, and what risk the brolly is prepared to take around this.


If you go ltd, then if you're outside IR35 you will still be able to claim.

[Dboy]

After April, under a brolly, expenses to the "permanent workplace" of the gig won't be allowed if you are subject to supervision, direction or control.

The consultation considers the workplace to be permanent if the worker:

"Goes...".

Thanks mudskipper. This client is offering 1-3 months working at my home office but with further opportunities later in the year, so:

• I'm hesitent to set up a new ltd co until I've been contracting for 3 or months.
• I will only be visiting the client one or two days a week.
• Could a brolly elect to tax the expenses and I claim back at the end of the tax year? Or is that a red herring.

[LisaContractorUmbrella]

Thanks mudskipper. This client is offering 1-3 months working at my home office but with further opportunities later in the year, so:

• I'm hesitent to set up a new ltd co until I've been contracting for 3 or months.
• I will only be visiting the client one or two days a week.
• Could a brolly elect to tax the expenses and I claim back at the end of the tax year? Or is that a red herring.

Depending on the type of contract that the umbrella company has in place they won't be allowed to allow tax relief on the expenses at source regardless of the position on SDC. You would have the option to claim via self-assessment but you would need to provide evidence that you had not been subject to SDC in the event that the claim was queried by HMRC

[SlipTheJab]

Just remember it's just the tax portion of the expenses that you were saving before, a £100 hotel bill is not an extra £100 in your pocket if expensed... I would say suck it up for 3 months and then go Ltd if it's working out.

[Dboy]

Just remember it's just the tax portion of the expenses that you were saving before, a £100 hotel bill is not an extra £100 in your pocket if expensed... I would say suck it up for 3 months and then go Ltd if it's working out.

Indeed - that's exactly what I'm thinking of.

[VectraMan]

Depending on the type of contract that the umbrella company has in place they won't be allowed to allow tax relief on the expenses at source regardless of the position on SDC. You would have the option to claim via self-assessment but you would need to provide evidence that you had not been subject to SDC in the event that the claim was queried by HMRC

Not even if it's not the normal place of work (i.e. 1-2 days a week)? What if the client sends you to a different site for a day; is the umbrella still not allowed to apply tax relief to those expenses?

[northernladuk]

One or two days a week is horrifying?? Where is the client site? Dubai??

[LisaContractorUmbrella]

Not even if it's not the normal place of work (i.e. 1-2 days a week)? What if the client sends you to a different site for a day; is the umbrella still not allowed to apply tax relief to those expenses?

In theory it could be allowable if there wasn't a contract in place which meant that the salary payable was variable according to the expenses that were being paid i.e. a standard over-arching contract of employment. After April 2016 an umbrella company contract will have to arrange a contract which deducts a fixed amount from the contract rate against which expenses will then be applied as and when they are incurred (in much the same way as we deal with holiday pay) otherwise any tax relief will have to be claimed by the contractor via self-assessment.

Unfortunately none of this is set in stone as we will not see the final legislation until the Finance Bill 2016 is published which I think is sometime in March i.e. a few weeks at most before the legislation comes into force