Claiming expenses through PSC whilst working through Umbrella

[PK2]

Hi there.

I was unfortunately classified to fall inside IR35 only a month after my start date on this new assignment, so will now have to switch to an Umbrella.

I very much wish to continue working through my PSC, maybe straight after this assignment ends, so planning to keep it active.

Question: I may not be able to claim any travel and subsistence expenses for this assignment anymore, but can I still carry on claiming things like IT equipment through my PSC if it remains active (even whilst not trading)? After all I am still using this equipment for my company admin, self-training and searching for potential new contracts (that'll hopefully be outside IR35).

Sorry if it's an obvious one.

[Craig@Clarity]

If it's wholly, exclusive and necessary for the purpose of the trade then yes.

[northernladuk]

If it's wholly, exclusive and necessary for the purpose of the trade then yes.

I don't think that really helps the OP though. All that does is give him just enough rope to hang himself.

What he is likely to miss is that his trade is next to nil at present unless he is developing apps or a service offering to sell which is highly unlikely for most contractors so most things bought right now will not meet the purpose of trade as there isn't any. Admin, self-training and searching for contracts sounds like hog wash. That said it might cover a very basic laptop if you really don't have a PC or laptop in the house due to always using client kit. Anything else than that is gonna be a stretch. Even then its highly likely that personal use is going to far exceed business use so not meet the criteria as much as you try convince yourself.

I can't find them as my search seems to be bugged but I'm certain we've had threads where accountants have suggested it is best not to buy stuff whilst inside unless it's 100% bomb proof it's only for the business in case HM comes looking.

What exactly are you thinking about purchasing?

[GhostofTarbera]

Hi there.

I was unfortunately classified to fall inside IR35 only a month after my start date on this new assignment, so will now have to switch to an Umbrella.

I very much wish to continue working through my PSC, maybe straight after this assignment ends, so planning to keep it active.

Question: I may not be able to claim any travel and subsistence expenses for this assignment anymore, but can I still carry on claiming things like IT equipment through my PSC if it remains active (even whilst not trading)? After all I am still using this equipment for my company admin, self-training and searching for potential new contracts (that'll hopefully be outside IR35).

Sorry if it's an obvious one.

Dont forget to pay the inside tax form start of your contract, not when you switch over to Umbrella

[PK2]

I don't think that really helps the OP though. All that does is give him just enough rope to hang himself.

What he is likely to miss is that his trade is next to nil at present unless he is developing apps or a service offering to sell which is highly unlikely for most contractors so most things bought right now will not meet the purpose of trade as there isn't any. Admin, self-training and searching for contracts sounds like hog wash. That said it might cover a very basic laptop if you really don't have a PC or laptop in the house due to always using client kit. Anything else than that is gonna be a stretch. Even then its highly likely that personal use is going to far exceed business use so not meet the criteria as much as you try convince yourself.

I can't find them as my search seems to be bugged but I'm certain we've had threads where accountants have suggested it is best not to buy stuff whilst inside unless it's 100% bomb proof it's only for the business in case HM comes looking.

What exactly are you thinking about purchasing?

Thanks for those more detailed useful thoughts! I did realise I'm stretching it but was just curious.
I think there's no point overthinking it as you're right it doesn't make sense to be expensing IT or other equipment when you'r not actually spendimg much time working through the company so I'll drop it.

[PK2]

Dont forget to pay the inside tax form start of your contract, not when you switch over to Umbrella

I was actually surprised they've asessed it inside because so far it's been an all-remote job without set workhours and some freedom as to what assignments I work on.
There wasn't any strong indication in favour of being inside when I was reading the contract.

I know many are stressing about staying with the same client because of backading tax payments but wasn't there a statement from HMRC they're not going to be chasing and backdating?

And how would I go about calculating & paying that extra tax for that month or so I've worked through my PSC prior to April?

[jamesbrown]

I know many are stressing about staying with the same client because of backading tax payments but wasn't there a statement from HMRC they're not going to be chasing and backdating?

There was a mealy mouthed statement about not using information from the off-payroll rollout (i.e., SDSs), but all of their regular avenues for finding and pursuing low-hanging fruit are still open, as well as random compliance checks... but you probably won't get caught and one-month is hardly a big risk if you do. Chances are you were inside all along, though.

[northernladuk]

I was actually surprised they've asessed it inside because so far it's been an all-remote job without set workhours and some freedom as to what assignments I work on.
There wasn't any strong indication in favour of being inside when I was reading the contract.

But they are minor flags at best. The main pillars are MoO (lack of), Substitution and D&C. The fact you assignments to chose from indicates D&C and potentially MoO. If they expect to give you a list and you pick and carry on then that's more toward perm than a contractor doing one specific piece of work. If they won't allow a sub then inside it is. Even if they don't fully understand all those they'll pick the safest option and put you inside.

How well to you really know IR35 to be able to say what factors affect your status? You've picked two that are pretty irrelevant so do you really know enough to say?

I know many are stressing about staying with the same client because of backading tax payments but wasn't there a statement from HMRC they're not going to be chasing and backdating?

And you believe that?

And how would I go about calculating & paying that extra tax for that month or so I've worked through my PSC prior to April?

I wouldn't bother for a month. It's the 12 months to 5 year permatractors that don't know any better they are after.

[PK2]

How well to you really know IR35 to be able to say what factors affect your status? You've picked two that are pretty irrelevant so do you really know enough to say?

And you believe that?

Actually there was a clause about being able to substitute myself and some other things I don't remember exactly without looking at it again.

[jayn200]

I disagree with most here and would think a laptop is probably fine if you need it. I wouldn't buy one if your business already owns one that is working fine, just wait to upgrade until you're back in contract, it's just a waste of money otherwise.

Since you're inside your client/employer is probably providing a laptop and all other IT equipment you need. If they aren't I would ask them too since they've assessed you inside.

Just use all your laptops for their own purposes. I have 3 laptops with me right now as is quite common (1 company, 1 personal, 1 client). It's good habit to use them for their designated purpose even if no one will ever verify it. It's good habit because you are less likely to accidently expose someone's or your own data or have some other incident. If you use 1 laptop for everything or you mix them up and just do whatever on each one then it's just messy.