Giant.... dispensation...ahem.

[gadgetman]

But why would that be any better than using your own Ltd with a similar 'scale rate' dispensation?

As far as I can see nobody has anything to lose by using Giant and their scale rate dispensation. If ever the situation gets so bad that I have to wrap up my Ltd Co or I have to work an "IR35 caught" contract, then I will seriously consider Giant I think now.

[Turion]

If you want 'real' receipts to produce just in case, just do a google search. You'll find plenty of ways to get receipts in a hurry. The web is the best place to look if you're in a spot of bovver. Would only bother if an investigation is looming though

[SueEllen]

Turion you are coming across as a fraudster.

[r0bly0ns]

As far as I can see nobody has anything to lose by using Giant and their scale rate dispensation. If ever the situation gets so bad that I have to wrap up my Ltd Co or I have to work an "IR35 caught" contract, then I will seriously consider Giant I think now.

Apart from people who's hotel bill is more than the scale rate.....

[LisaContractorUmbrella]

From the HMR&C website:

A scale rate payment which is calculated to do no more than reimburse the expenditure incurred by employees on allowable expenses will not be regarded as a round sum allowance ( EIM05100). The employer can be authorised to make such payments without deduction of tax under PAYE. See Booklet 490, Section 9.6 onwards.

However, it is important that you only apply that treatment to appropriate items. In general, scale rates are only appropriate for expenses which are widely incurred, in broadly similar amounts, but for which it is often difficult to get receipts. For example subsistence, or the expenses of cleaning uniforms or protective clothing (see EIM32465). Scale rates should be set at a fairly modest level which, taking one day with another, will be enough to cover the relevant expenses. They should not be pitched at a level to cover the highest amount that an employee might spend.

A dispensation can be given for this. Scale rate payments are amounts that are calculated to do no more than reimburse the average amount spent by employees

HTH

[meridian]

Doesn't sound much different in practice to the expenses claimed by MPs and MEPs - receive a £250 allowance per flight, book a 1p flight on Ryanair, pocket the difference.

Surprised they let Joe Public away with that sort of racket though!

[TheFaQQer]

As far as I can see nobody has anything to lose by using Giant and their scale rate dispensation. If ever the situation gets so bad that I have to wrap up my Ltd Co or I have to work an "IR35 caught" contract, then I will seriously consider Giant I think now.

Nobody has anything to lose, assuming that your costs are less than or equal to the scale rate dispensation, and you are IR35 caught so will be taking everything as PAYE rather than dividends. This assumes that you are not on FRS for VAT, and the costs of joining an umbrella are less than or equal to the costs of running a Ltd.

But why would that be any better than using your own Ltd with a similar 'scale rate' dispensation?

Because a scale rate is calculated as an average cost of your employees expenses. If you only have one person in your company, then you won't get a scale rate, since it will always average to your actual expenses.

[ASB]

If you only have one person in your company, then you won't get a scale rate, since it will always average to your actual expenses.

HMRC do seem to imply that they will allow scale rate for international travel for any size company though.

Mind you they are not exactly generous. The room rate I pay in Lille and Paris is more than the daily scale rate.

[LisaContractorUmbrella]

This may help:

A round sum expenses allowance is an allowance which is paid to an employee irrespective of whether he or she spends it or not in a particular way, and so it is taxed as earnings (s 62 ITEPA 2005).

A scale rate payment is a payment made as a reimbursement of expenditure actually incurred by an employee and this is tax free in the employee’s hands (principally s 336 to 338 ITEPA 2005)

So, to clarify, if the employee incurs the cost and that cost is being reimbursed a scale rate payment is applicable and no tax is due. However, if the employee has not incurred any cost but an expense is paid it is a round sum alllowance and therefore should be taxed as earnings.

[Bob Jones]

Some time ago I covered the question of scale rates on my website at

http://www.internet-taxation.co.uk/scale%20rates.htm

Bob Jones
InternetTaxation Limited