Parasol & lunch & travel costs

[james14]

This is my first temping job, so some help please if you can.

I have been given a job through an employment consultant working for a city firm. It is a 4 month fixed-term contract of employment (which with any luck will become permanent). For the first month, however, as it is too late to go on the Company payroll I am being paid by my employment consultant.

They (have just started to) outsource their payroll to Parasol.

I don't believe that I can claim lunch or travel expenses against tax. Can I really? From next month I am a fixed-term employee working at the site mentioned in my employment contract.

The recruitment consultants have agreed to reimburse me the £60 per month Parasol fee.

This sounds very complicated - they need to reimburse the e'er's NI too. That means that they'll have to withhold NI & PAYE on what they repay me... which will be a really unpleasant calculation.

Any thoughts? My thought is that my recruitment company should be outsourcing payroll, not using an umbrella company... Many thanks. (Parasol swear blind that none of this will be a problem.)

[james14]

Oh yes, and they bang on about it being a Schedule E expense. From what I recall, such expenditure has to be wholly exclusively and necessarily incurred - which is a hurdle that is virtually impossible to pass except for professional subscriptions which are separately permitted. I recall reading an article in Taxation some years back arguing that a schoolmaster might be able to deduct the cost of a home computer against Schedule E if he prepared a lot of lessons on it at home.

[Spacecadet]

Wow - this really is your first contract

a. its a contract not a temp job

b. The agency is not out sourcing their payroll, they are leaving payroll to you to sort out and have passed it on to parasol to deal with on your behalf. Usually you can choose the umbrella company yourself or, as quite a few people do, have a limited company of your own that the agency can pay direct. Then you sort out payroll and dividends etc. Looks like they're steamrollered you into using parasol. Oh well, there are worse out there.

c. Close your eyes and let parasol sort it out - i used them for the first 6 months of contracting and they seem to be above board.

d. Expenses you can claim: Travel, hotel, food, equipment. If you're not staying over night then you'll only need to claim travel (don't bother with lunch). You will need receipts for everything and parasol did require me to send copies of them in.

[james14]

Thanks for your comments, yes it is my first time!

>expenses you can claim: travel, don't bother with lunch.

Why can I claim travel? I am definitely employed and not self-employed. I have a permanent site of work, as specified in my contract of employment which starts next month.

If I can claim travel, then why can I not claim lunch? Parasol say I can claim up to £5 which is presumably a lie. Indeed, they imply a straightforward subsistence claim - rather than one backed up by receipts.

SUBSISTENCE
1.0 Subsistence
Subsistence are basically meal costs incurred whilst working at a
temporary workplace, such as meals, drinks etc.
Daily Subsistence
Up to £5 per day if you work more than 5 hours.
Up to £15 per day if you work more than 10 hours.
Alternatively Parasol’s dispensation flexibility will allow
reasonable subsistence amounts to be claimed above the £5
or £15 allowances provided they are incurred wholly for
business purposes and are supported by the original
receipts.
An additional overnight subsistence can be claimed when
staying in temporary accommodation. Please refer to the
General Expense section of this Guide ref. 3.5

[malvolio]

Ermm...

If you are employed, you can't claim travel to your normal place of work. You can't claim lunch either - it is assumed you would eat lunch anyway, so it's not a business expense.

So basically, turn up, get paid, go home. You don't qualify for expenses.

[LisaContractorUmbrella]

Thanks for your comments, yes it is my first time!

>expenses you can claim: travel, don't bother with lunch.

Why can I claim travel? I am definitely employed and not self-employed. I have a permanent site of work, as specified in my contract of employment which starts next month.

If I can claim travel, then why can I not claim lunch? Parasol say I can claim up to £5 which is presumably a lie. Indeed, they imply a straightforward subsistence claim - rather than one backed up by receipts.

SUBSISTENCE
1.0 Subsistence
Subsistence are basically meal costs incurred whilst working at a
temporary workplace, such as meals, drinks etc.
Daily Subsistence
Up to £5 per day if you work more than 5 hours.
Up to £15 per day if you work more than 10 hours.
Alternatively Parasol’s dispensation flexibility will allow
reasonable subsistence amounts to be claimed above the £5
or £15 allowances provided they are incurred wholly for
business purposes and are supported by the original
receipts.
An additional overnight subsistence can be claimed when
staying in temporary accommodation. Please refer to the
General Expense section of this Guide ref. 3.5

You cannot legally claim a daily allowance for subsistence unless you are working away from home overnight I am afraid James. To quote directly from the IR themselves:

"I can confirm that contractors cannot automatically claim £21 per day (or any other amount) for each day they are at work. It is also worth saying the Inland Revenue would not give general approval of a company's expenses policy. A dispensation would never cover large amounts of unsupported expenditure" and "The cost of food, drink and accommodation is not in general an expense incurred wholly and exclusively for business purposes, since everyone must eat in order to live"

HTH

[james14]

Well Malvolio, I agree with you. I am a contractor. I will have - next month - a contract of employment for a fixed term period.

Yet Parasol swear blind that I can claim expenses - the girl on the end of the phone got quite aggressive about it (and said "of course you have to pay employer's NI, but it's worth it because of the expenses you can claim"; she clearly didn't understand at all). And Space Cadet falls halfway between Parasol's view and ours. Why?

[james14]

You cannot legally claim a daily allowance for subsistence unless you are working away from home overnight I am afraid James.

I know!! Thanks for agreeing with me, though. So why do Parasol say that I can? It is, as I said, presumably a lie.

[Spacecadet]

And Space Cadet falls halfway between Parasol's view and ours. Why?

Looks like Parasol have fallen in line with the other cow boy umbrella co's

Your day rate should compensate you for paying the employers NI and the parasol fees and still leave you a lot better off than a permanent employee.
Unless you agreed to a pro rata rate similar to a permie?

[Newby]

I kinda feel for you, you cannot claim expenses, what you really want is a permanent job, but you have been given a fixed term contract, they are probably using this as a trial to see if you are any good- but they dont have the balls to tell you that!

You are really getting the thin end of the wedge!!!

You should name and shame your agent too, just so I can avoid them!!

Good Luck though I hope it works out in the end