Incorrect advise from Umbrella Company?

[yamamma]

Been speaking to a few umbrella companies about working as a contractor. Currently outside UK but arriving in July. One of the companies that quoted me a better take home pay amount claimed i could claim the following expenses:

* Rental accomodation of $400 per calendar month
* Additional expenses of $1800 prepresenting relocation costs and two return flights to AUS.
* Relocation expenses including shipping costs, airfares, visa expenses, 6-8 weeks of temporary accomodation, airport transfers etc.

Does this sound right? It doesnt make sense to me that i should be able to claim my rental accom and travel back to Aus every year. Please enlighten me.

[malvolio]

Been speaking to a few umbrella companies about working as a contractor. Currently outside UK but arriving in July. One of the companies that quoted me a better take home pay amount claimed i could claim the following expenses:

* Rental accomodation of $400 per calendar month
* Additional expenses of $1800 prepresenting relocation costs and two return flights to AUS.
* Relocation expenses including shipping costs, airfares, visa expenses, 6-8 weeks of temporary accomodation, airport transfers etc.

Does this sound right? It doesnt make sense to me that i should be able to claim my rental accom and travel back to Aus every year. Please enlighten me.

Walk away.

They are being economical with the truth to get your business, as you suspect. As a general rule of thumb, do not deal with any umbrella that pushes expenses as a routine income factor.

[LisaContractorUmbrella]

You should question any umbrella company that quotes figures for expenses without actually asking you what costs you are going to be incurring.

The Inland Revenue decide what expenses can be legitimately claimed and, therefore, no umbrella company can claim to offer you a better take home pay than any other - or rather they can claim it but it would be untrue.

HTH

[yamamma]

A follow up question from the original post is
For a contractor inside IR35:
Can rental accomodation be claimed as an expense? (my assumption was only expenses such as hotel accomodation was valid)

Can Airfare from O/S to UK claimed as an expense? (again my assumption was only cost incurred during commute from home to work could be classified as an expense)

[timh]

As an employee of an umbrella, IR35 is fairly irrelevant, as far as I understand it.

There may be a difference between umbrellas in that some umbrellas may not let you claim expenses that are perfectly legitimate.

Think in terms of the umbrella as your employer; if you worked for a big company and they sent you away to work in the US for 2 months, is your air fare a business expense? Yes. Is you accomodation there a business expense? Yes. Could it be classed as a relocation? Possibly not, I don't know. Is your $500 bill for 2 months of pay-per-view porno in the hotel a business expense? No, it's not (unless your work involves researching the porn industry).

From what I recall, renting temporary accomodation is allowed as long as the total cost is equal to or less than what reasonable hotel accomodation would be for the same period.

[Bluebird]

From what I recall, renting temporary accomodation is allowed as long as the total cost is equal to or less than what reasonable hotel accomodation would be for the same period.

Correct.

I was a permie down in Hampshire for IBM a few years back - I rented a cottage rather than sit in a hotel for 6 months - they picked up the tab no problem - only hassle was having beans on toast rather than a hotel meal every night !