Umbrella Expenses

[Kylie4485]

Over-arching contract

1. the over-arching contract is a term in your contract of employment.

Without this term a first time contractor should not be claiming expenses. Only professional contractors are allowed to claim for expenses (professionals contractor classed as have worked at least 330 hours in a year)

The term basically means that you have the intension to carry on contracting after your first one.

2. When you go through an Umbrella Company, your home is classed as your permanent place of work.

[To BI or not to BI?]

Precisely. The umbrella's tax affairs will be completely in order. However in recent months a certain umbrella sank like a stone because it couldn't pay it's VAT bill.

They are a convenience and take away a lot of the work (not that there's that much involved) but ultimately it's your money and you get to pay the fines.

its

[Cowboy Bob]

1. the over-arching contract is a term in your contract of employment.

Without this term a first time contractor should not be claiming expenses. Only professional contractors are allowed to claim for expenses (professionals contractor classed as have worked at least 330 hours in a year)

The term basically means that you have the intension to carry on contracting after your first one.

2. When you go through an Umbrella Company, your home is classed as your permanent place of work.

That is a complete load of carp.

1) Expenses have nothing to do with how long you've been contracting, they are to do solely with the circumstance surrounding the current contract
2) Your home is your permanent place of work only if you either a) have your own Ltd company registered there, or b) you exclusively work from home.

[TheFaQQer]

1. the over-arching contract is a term in your contract of employment.

Without this term a first time contractor should not be claiming expenses. Only professional contractors are allowed to claim for expenses (professionals contractor classed as have worked at least 330 hours in a year)

The term basically means that you have the intension to carry on contracting after your first one.

2. When you go through an Umbrella Company, your home is classed as your permanent place of work.

Where did you get the figure of 330 hours from?

What you are saying is that if I work for one month a year and then don't bother with the rest of the year (which I could do), I wouldn't be able to claim expenses because I wasn't a "professional contractor"?

[Bluebird]

1. the over-arching contract is a term in your contract of employment.

Without this term a first time contractor should not be claiming expenses. Only professional contractors are allowed to claim for expenses (professionals contractor classed as have worked at least 330 hours in a year)

The term basically means that you have the intension to carry on contracting after your first one.

2. When you go through an Umbrella Company, your home is classed as your permanent place of work.

carp.

[Kylie4485]

ok boys, whatever you say

[Rialto99]

Thanks Mal - I appreciate your advice. With all this in mind then, 1. how can Umbrellas justify processing contractor expenses (mileage to / from the temp / perm workplace) and therefore reduce your tax bill if these expenses are indeed not allowable?, surely Umbrellas would all go out of business if contractors couldn't legally offset their tax bill in this way...

2. Who has to pay back the tax saved (by claiming such expenses) if / when HMRC audit the Umbrella?

Thinking about it logically, surely over the last (say) 7 years HMRC have indeed audited several Umbrella Companies (maybe 100's) and not pulled them up on this generic 'incorrect' treatment of the expenses legislation. Otherwise how on earth can a company such as Parasol (1,000s of contractors) continue to process and offset expenses to reduce contractor's tax bills?

R

Umm, a very interesting debate indeed!

So back to my original question then, how on earth can a company such as Parasol (1,000s of contractors, endorsed by the PCG!) continue to process and offset expenses (let alone non-receipted dispensation expenses) to reduce contractor's tax bills if the contractor's place of work (as in the place of work he goes to every day for a particular assignment) is classed as a Permanent Workplace?

If the answer is "they can offset the expenses, it's just not strictly allowable therefore you will have to repay any tax you've saved by claiming these expenses" then what the **** is the point in an Umbrella Company and why the h3ll are there so many out there?!

Sorry for my foul language...please forgive me

R

[Damo1176]

Umm, a very interesting debate indeed!

So back to my original question then, how on earth can a company such as Parasol (1,000s of contractors, endorsed by the PCG!) continue to process and offset expenses (let alone non-receipted dispensation expenses) to reduce contractor's tax bills if the contractor's place of work (as in the place of work he goes to every day for a particular assignment) is classed as a Permanent Workplace?

If the answer is "they can offset the expenses, it's just not strictly allowable therefore you will have to repay any tax you've saved by claiming these expenses" then what the **** is the point in an Umbrella Company and why the h3ll are there so many out there?!

Sorry for my foul language...please forgive me

R

According to info I have read a place does not become your permanent workplace until you've been there for 2 years or to the pont you knoiw it will cotninue beyond 2 years.

My previous job I worked in one place for ages but then the company asked me to commute to another location for the foreesable future but still my permie location was my previous location, I claimed expenses for it (to the company) and alsdo got tax back on some of it. After 2 years this was not recognised anymore and my permie location changed, expenses over!

[NotAllThere]

ok boys, whatever you say

Well, would you care to back up what you've said?

[Kylie4485]

I would love to, but being told what I am saying is carp, its not very welcoming, text from different sources:

"It is important to establish that you are a professional contractor from the outset and that you intend to seek a succession of assignments through an Umbrella Company. An umbrella companies contract of employment is an ‘over-arching' contract and enables you to establish your permanent work place at your home. You will use your home office to find new (successive) assignments, to undertake skills training, to use as a base to travel to your temporary assignments and to complete the paperwork for your current assignment. Your assignments (of limited duration - less than 24 months) take place at temporary workplaces."

"an “overarching” contract, under which a number of separate postings are made then the normal temporary workplace rules can apply. Where the contracts of employment are successive separate contracts no expenses will be deductible at all if the employee spends or is likely to spend most of his time at the same site."

An over-arching term from a contract of employment:
"As a minimum we do however guarentee that you will be offered at least 336 hours of paid work over the course of any full 12 month period of employment commencing on the start date." That term has been viewed by revenue.

I Should not even give you an explanation, you was so rude