Giant.... dispensation...ahem.

[sidknows]

Just as a matter of interest , is anyone aware of any paye umbrella clients who have been told they must pay additional tax as a result of their umbrella company misleading them

I would guess that the answer to this would be no , which is why umbrella companies can mislead contractors with their 'dispensation'

[TheFaQQer]

Hi T,

Thank you for coming back to me and I’m sorry to hear that you feel that this information is incorrect. I can assure you that even if you only paid £40.00 for your Bed & Breakfast (and have the receipt to prove that you incurred this cost) you will be able to claim the full £90. This is due to the Dispensation that we have with the HMRC which is a formal agreement made between HM Revenue and Customs regarding allowable expenses that an employee may claim.

As a result of the dispensation the expenses the employee receives tax relief on them automatically. The dispensation means that the employer (giant) carries the risk of additional tax following an investigation instead of the employee. HM Revenue and Customs carry out routine audits on companies holding dispensations.

I hope this gives you the reassurance you need, however if you would like to have these receipts returned, please confirm this to me, as this will have an effect on your next payment.

I look forward to hearing from you whether you definitely want these receipts back and if you do have any further questions, please do let me know.


Regards






I've decided to get my receipts back and close GIANT at the end of my contract in a couple of weeks.....


Thanks for your comments......

Of course, we may all be wrong here, and Giant are right. Ring HMRC and see what they say - this confirmation is worth keeping and discussing with HMRC and / or PCG anyway.

[NotAllThere]

Of course, we may all be wrong here, and Giant are right. Ring HMRC and see what they say - this confirmation is worth keeping and discussing with HMRC and / or PCG anyway.

It would be rather nice if we were all wrong.

[LisaContractorUmbrella]

It would be rather nice if we were all wrong.

Is that you Eternal Optimist????

[Alan @ BroomeAffinity]

Surely a dispensation allows employees to claim UP TO a specified amount - in this case £90 - but only what has actually been spent.

But this is how a lot of unscrupled brollies operate - They say you can increase your earnings my maxing out your dispensations.

As has been said on this thread - and many other before - you can only claim tax relief on what has been spent.

[ASB]

Just as a matter of interest , is anyone aware of any paye umbrella clients who have been told they must pay additional tax as a result of their umbrella company misleading them

I would guess that the answer to this would be no , which is why umbrella companies can mislead contractors with their 'dispensation'

Thare was one rather large brolly/accountants in what are now classed as MSC which was investigated and came to an agreement on behalf of it's customers where they all had to stump up a certain amount. I think this centered on travel expenses.

I am sure there have been other and will be more when HMRC start the investigations they have already implied they intend.

[Fred Bloggs]

I believe there is a long term strategy to end the claiming of expenses by contractors. The MSC co action was a start, the declared "war" on brolly dispensations is next, the failuire to lift mileage allowances and let with wither away in value is another indication. I think it is just a matter of time before it will be almost impossible to claim expenses for most of us.

[ASB]

I believe there is a long term strategy to end the claiming of expenses by contractors. The MSC co action was a start, the declared "war" on brolly dispensations is next, the failuire to lift mileage allowances and let with wither away in value is another indication. I think it is just a matter of time before it will be almost impossible to claim expenses for most of us.

I suppose at least that becomes a level playing field. Albeit the wrong one

It has always seemed to me fairly bizarre (though I have obviously taken advantage of it since I didn't make the rules) that I was able to claim the expenses associated with obtaining my income whereas anybody in permanent employment wasn't.

Personally I think the everybody should be able to claim these costs. If nothing else it would increase mobility substantially.

An example, now I'm permie I'm home based. Somebody wanted to poach me last year, in the same geographical area as my employer. However I would have needed to be office based 2 days a week. In order to cover the associated 15k miles and 50 hotel nights I would need an extra 25k to cover it rather than the 15k it would actually cost.

[The Lone Gunman]

I may have to change my mind. From the IR web site.

Expenses and benefits in kind: a guide for tax and NICs: how to operate the rules: dispensation
How to cut down on your paperwork

You may be able to cut down on your paperwork by asking us for a dispensation. A dispensation is a notice, issued by an Inspector, which relieves you from reporting details of expenses and benefits on forms P11D or P9D.
You can ask for a dispensation for expenses payments you make, or benefits you provide, that would attract a full tax deduction in the hands of the employee. Examples include payments to meet the cost of business travel, or benefits provided wholly for work purposes.
You may also use a dispensation for NICs purposes. We accept that:

• expenses payments covered by the dispensation are not earnings for Class 1 NICs purposes and
• benefits mentioned in it are not liable for Class 1A NICs.

A dispensation also helps your employees. They do not have to include details of the expenses and benefits covered by the dispensation in their tax returns. Nor are the expenses and benefits included in either their tax assessments or PAYE codes.
The quick guide to whether tax and NICs are due tells you which expenses and benefits can be covered by a dispensation.
Guidance P11DX - How to cut down on your paperwork: dispensations (PDF 35K) gives further information and includes an application form. You can find detailed guidance at EIM30050 onwards.

The bold bit is my emphasis and seems relevant.

[Fred Bloggs]

And your point is? You still need receipts to claim against, do you not?