What to do if you are currently with a Composite or Managed Company.

[Nixon Williams]

There are a few minor points that people often miss:

1. It the site constitutes no more than 40% of your work time then you can continue to claim it is a temporary site and so claim the travel etc. There is no limit to this.

2. If you start a company and only work at one site and then close you cannot claim travel even if it was for less than 24 months. This is because the site cannot be temprary as it was the only site!

3. The new legislation will apply to MSC's and umbrella's as they will be considered employees of the MSC/umbrella, this will not be the case with ltd companies.

4. Expenses could be paid to a sales rep as part of their job is to travel and meet customers etc. A contractor generally would not be doing this but would be based at a site(s).

Alan

[dmini]

According to an email I have seen, from ContractorUmbrella

"There is also talk in the document of more heavily regulating the types of expenses that can be claimed when using an umbrella, brought about by the unethical practises of certain companies who claimed that could you submit almost unlimited expenses without receipts "

So on that basis it will be "watch this space", see what the regulations ACTUALLY say. Not NO expenses - but more heavily regulating them.

Until the changes are published, we won't know what is in them, and cannot really guess. As an employees, if all expenses were disallowed, they would haveto be for all employees, as pointed out, and permies DO get paid for the whole cost of going to different sites, than their "base", may get lunch allowances if away from their base (I did in one job), and all I know certainly get hotel & meals etc if they are staying away from home!
Whatever happens, we will know fairly soon. Everything else is just speculation!

[jimmynothing]

No, you can claim at present because by definition the contract site is classed temporary. From 6th April 2007 the site you actually work at will be classed as your permanent work place, even if less than the 24 months.

Please can you show the link to this information? I had a look at the pre budget report and couldn't see any specific references to workplaces definition or expenses.

[jh0711]

Hi Alan,

All this seems fine except

Sales man - employed by brolly - spends most time at HO (cannot claim expenses for this) - goes to client can claim expenses
Coder/It supportperson etc.etc.etc - employed by brolly - spends little if any time at brolly HO (cannot claim expenses) - spends a lot of time at client site - and again cannot claim expenses?????????

What it will ultimately mean is no benefit of being a contractor so more people go permie as the security but lower wages of permie will now be more attractive than the lack of security and only slightly higher return for being a contractor.

Thus a larger skills shortage as contractors will not be as encouraged to travel/stay away from home to work in out of the way places.

I can see why Gb is attacking composites as that is just a tax dodge but attacking PAYE brollies seems very short sighted omho (didn't he bang on about 14 million flexible workers in the last budget or something?) flexible workers require felxible rules! - or does he want the whole of the contracting world to run LTD co's - that will help the HMRC no end i am sure!

[Nixon Williams]

Someone working via an umbrella would not be based at the HQ of the umbrella company, his place of work will be the site he is at, so no claim allowed. This is from April 2007 if the proposals are enacted.

The saleman cannot claim home to office travel as that is his base but travel to a customer is claimable.

Alan

[ChimpMaster]

I wish the Gov would get smart. The average contractor might have revenue of say £60k, and hence pay about £15k tax. If he is forced to go permie, he will prob earn, say £40k, and pay about £11k tax.

Am I being stoopid here? i.e. does the Gov want less tax by forcing us all to become permies?!

Then again, I've always said that only the thickest and least educated people work for government, hence that explains their thinking...

[dude69]

I wish the Gov would get smart. The average contractor might have revenue of say £60k, and hence pay about £15k tax. If he is forced to go permie, he will prob earn, say £40k, and pay about £11k tax.

Plus employer's NI

[Skillz]

This may well be sound advice, but shouldn't this be an impartial forum?

A worryingly large number of posts here are from SJD, Contractor Umbrella and the likes. They try to sound unbiased but obvioulsy this isn't the case.

Why are the moderators torelating this?

Actually, I wouldn't be surprised if there aren't any, given the amount of abuse certain members throw at others.

There are moderators... I uncovered a recruitment scam and told you all about it on these boards and within two hours the post was removed and I was told to complain to the company in question. Bah humbug!

[Sockpuppet]

There are moderators... I uncovered a recruitment scam and told you all about it on these boards and within two hours the post was removed and I was told to complain to the company in question. Bah humbug!

There is difference between SJD, Contractor Umbrella offering advice to the masses as long as every post isnt "well what you could do is call us and we can set you up..."

What you were saying was border lines liabel so I dont think CUK want to get sued.

[ASB]

I wish the Gov would get smart. The average contractor might have revenue of say £60k, and hence pay about £15k tax. If he is forced to go permie, he will prob earn, say £40k, and pay about £11k tax.

Am I being stoopid here? i.e. does the Gov want less tax by forcing us all to become permies?!

Then again, I've always said that only the thickest and least educated people work for government, hence that explains their thinking...

I'm not sure, but one thing that often isn't factored in is the extra corporation tax. If the cost of the resource drops from 60k gross to 40k gross (inclduing employers NI etc) then of itself that gives the treasury 6k in CT (assuming 30% band) because the profit to the enterprise has increased by the 20k difference.

Quite how the overall figures stack up I wouldn't know - but it's not so much how much the contracter pays but overall the take and from whom.