Advice Needed -Consultancy asking for expenses to claim them as their own

[Mobious]

Hi everyone,

First-time poster here and I need some advice as I am feeling rather stressed.

I received a call from the consultancy I am working on a 6-month contract. They asked me to send them my expenses. I asked them why because in my contract it says I don't have any expenses. I double-check with my agency and they confirm that expenses aren't part of my contract.

I tell them this, and they said they want my travel expenses because they want to claim them. I told them they can't do that as I claim them through my limited company and if you are to claim expenses on my behalf then I expect to receive my expenses back.

They then said well we agreed on a contract with you before we had agreed with it with the client and we can't claim expenses so we are losing out and we need to claim them through you.

I told them, you can't do that as amongst other things its false accounting and contractually I don't claim expenses through you as a company.

They then responded, well if you don't feel 'comfortable' we will renegotiate your contract to a lower level, and then you will claim your expenses back.

I said I wouldn't agree to that. There are three other people with me who are in the same boat. I am simply lost for words that they are trying to do this.

How on earth do I deal with this? The market is obviously dead otherwise I would have walked, so I am like many people in a difficult financial position, and I don't want to talk myself out of a role. The pay is already half my normal day rate!!

[Paralytic]

Just submit your travel expenses. If they're zero, they're zero. Not sure exactly what the issue is here. Did they actually ask you to make stuff up?

You also need to be clearer on who this "consultancy" is. Is the engagement You -> your Ltd -> Agency -> Consultancy -> Client? What is your agency saying about the situation?

[Mobious]

For clarification.

I go through an Agency who are working for a consultancy who places me on site with an end client.

I claim my travel expenses through my Ltd company as part of the day rate. As part of the contract there is no prevision for expenses to submitted to the agency.

The consultancy has suddenly asked for my expenses which they want to submit on their behalf to the end client.

So I have NO agreement with the consultancy for expenses, but they want me to send them my mileage claim. In doing that, they are claiming the mileage as revenue generation.

I won't receive my mileage back from the consultancy and I won't be able to claim back the expenses through the ltd company.

They are threatening to rip up the contract and try to make us take a lower rate.

[BlueSharp]

Keep an eye out for late payments as to me this suggests cashflow problems with the agency.

[Lance]

they're not asking you to do anything wrong.
It's entirely up to them if want to charge 'their' client expenses. Whether they do that is not materially inked to whether they reimburse you.

It does sound a bit dodgy though.
And what's weird is if I was the consultancy I'd be making up the expenses I was claiming anyway. Unless they're after your receipts.

The bit where it get's dubious is when you claim the VAT back on your receipt for you own purposes, and the consultancy also claim back the same VAT. That is very clearly VAT fraud.

What would I do..... I'd probably give them copies of the receipts as pissing off your customer over something of no monetary value to you is not wise.
I'd also put in writing that the receipts are supplied for their own internal purposes and that I have already claimed back the VAT from HMRC and whilst I don't care what they do, I want to make it very clear that it would be illegal/criminal fraud of them to also claim the VAT back.

[ladymuck]

I think Lance has a decent angle on that. Keep the originals, send copies only and make it very clear that your LtdCo has reclaimed any VAT and that you are not making any claim for expenses from the consultancy.

[Paralytic]

Something needs clarified.

They asked me to send them my expenses. I asked them why because in my contract it says I don't have any expenses. I double-check with my agency and they confirm that expenses aren't part of my contract.

I tell them this, and they said they want my travel expenses because they want to claim them. I told them they can't do that as I claim them through my limited company and if you are to claim expenses on my behalf then I expect to receive my expenses back.

Do you or do you not incur expenses as part of your work for the client? And if you do, do you claim them from the client, or do you just claim them from your Ltd company (ie, it comes out of your gross day rate)?

[Mobious]

Thank you for the responses and let me clarify.

So I am recruited through an agency to work with an end client on behalf of the consultancy.

My contract is with the agency. I have a day rate.

When I refer to expenses, I mean my travel expenses which I claim back through my limited company.

So as far at the agency is concerned, they just pay me the day rate and any expenses I incur is my responsibility to claim back through my Ltd company.

The consultancy as asked me to send them my travel expenses as they want to claim them.

They can't as I will have already claimed the VAT back and like others have stated, this would be VAT fraud.

They are threatening to renegotiate the contract if I don't agree.

[Lance]

They can't as I will have already claimed the VAT back and like others have stated, this would be VAT fraud.

But they can claim back from their client if their client allows it.
for mileage they shouldn't need receipts anyway. Receipts for fuel are only any use for VAT claims.

[malvolio]

But they can claim back from their client if their client allows it.

How, exactly, if they haven't incurred the expense? More going on here than meets the eye. I would be demanding precise answers from the agency...