Daily Subsistence

**james14** · 14 June 2007, 13:51

Well, Lisa, this ageres with what I have always thought. But Parasol read out over the phone to me from what they asserted was their dispensation letter from HMRC confirming £5 per day subsistence - no receipts required. They justified my claiming it on the basis of their head office being in Warrington, and my working in London.

**Ardesco** · 14 June 2007, 14:05

And that is why so many people are trying to claim expenses that they should not claim and opening themselves up to sever fines and worse if they get inspected.....

They should really pass legislation to make the umbrella companies liable for the tax owed, they would stop offering out free money via dispensations pretty sharpish.

james14, call back the account manager and ask him to send you a signed statement confirming that you can claim £5 per day, and also confirming that Parasol will indemnify you against any tax owed because of this £5 a day you are claiming if you get investigated.

I bet he won't......

**LisaContractorUmbrella** · 14 June 2007, 14:07

Originally posted by james14

Well, Lisa, this ageres with what I have always thought. But Parasol read out over the phone to me from what they asserted was their dispensation letter from HMRC confirming £5 per day subsistence - no receipts required. They justified my claiming it on the basis of their head office being in Warrington, and my working in London.

That's right but you can only claim it if you are working from home overnight - it is not an automatic allowance for going to work each day.

**james14** · 14 June 2007, 14:07

Strangely enough, Ardesco, I did ask him and he said he would. But that there was no need as it was all within the law.

**james14** · 14 June 2007, 14:11

But Lisa... (I agree with you) but he read it over the phone to me from HMRC's letter as a daily allowance - not an overnight allowance. £5 for over 5 hours, £15 for over ten hours. Either he was making up his letter from HMRC, or it was true.

He told me that different umbrella companies negotiated different agreements with HMRC. I pointed out that it meant that different taxpayers were treated differently which went totally against the basic principles of taxation. He indicated that umbrella companies based in the south east would be able to negotiate a higher subsistence level than those based in the north west like Parasol.

I asked him to send me a copy of the letter, but he refused on the basis that it contained commercially sensitive information.

**Damo1176** · 14 June 2007, 14:15

This is crazy!!! Does the HMRC want to waste money investigating people or just pass a law that says exactly what the mean and allows none of this crap doneby umbrellas. I got a receipt for lunch and debated whether to input as expense, now binned and just my diesel receipt kept.

THe only route then is to live off £33k and dump any thing over into your pension or go limited and debate IR35.

**Cowboy Bob** · 14 June 2007, 14:21

Originally posted by james14

But Lisa... (I agree with you) but he read it over the phone to me from HMRC's letter as a daily allowance - not an overnight allowance. £5 for over 5 hours, £15 for over ten hours. Either he was making up his letter from HMRC, or it was true.

A dispensation letter has nothing to do with what you can and cannot claim. All it means is that the Umbrella don't have to see those receipts (or enter them onto your P11D) if you are eligible for the expense. If you are not eligible for the expense and you claim it, then ultimately the buck stops with you as the Umbrella are not legally obliged to audit the expense under the terms of their dispensation.

**Ardesco** · 14 June 2007, 14:37

Originally posted by james14

Strangely enough, Ardesco, I did ask him and he said he would. But that there was no need as it was all within the law.

If he will send you out a letter stating that Parasol will pay any tax owing/fines in the event of a tax investigation take him up on his offer and claim away!!!

**spiderlover** · 14 June 2007, 14:56

Originally posted by Cowboy Bob

A dispensation letter has nothing to do with what you can and cannot claim. All it means is that the Umbrella don't have to see those receipts (or enter them onto your P11D) if you are eligible for the expense. If you are not eligible for the expense and you claim it, then ultimately the buck stops with you as the Umbrella are not legally obliged to audit the expense under the terms of their dispensation.

Finally - someone who tells it as it is!

James, what's so hard to understand - are you looking for a reason NOT to use an umbrella?

Daily Subsistence