Umbrellas Doomed?

[IR35 Avoider]

I've only skimmed the thread so please don't jump on me if someone's said this already...

...also the rules may have changed since I read this...

... but I seem to remember that if you work for an umbrella, since they don't undertake to pay you once your current contract runs out, this means that you expect to work at client site for the whole duration of your employment, that means it is not a temporary workplace, therefore you are not allowed to claim even for the first two years.

(I know that in practise everyone does claim.)

The situation for limited company contractors and EDS employees is different, their employer does expect to pay them indefinitely regardless of the length of individual contracts, so they can claim travel expenses.

I've never claimed travel expenses so I've not studied the issue much. No doubt someone will correct me shortly.

[TheBigYinJames]

... but I seem to remember that if you work for an umbrella, since they don't undertake to pay you once your current contract runs out, this means that you expect to work at client site for the whole duration of your employment, that means it is not a temporary workplace, therefore you are not allowed to claim even for the first two years.

It's not right. An umbrella has what is known as an over-arching contract with you. When an individual client contract runs out, you are still under contract with the brolly (employed by them), you just can't get any money out of them.

[original PM]

but I seem to remember that if you work for an umbrella, since they don't undertake to pay you once your current contract runs out, this means that you expect to work at client site for the whole duration of your employment, that means it is not a temporary workplace, therefore you are not allowed to claim even for the first two years.

Generally you are actually employed by the brolly and if you wished to turn up for work at their offices they would be obliged to pay you minimum wage for the hours you were there. (no one is ever likely to do this because it is for minimum wage and you could not claim expenses)

They also have a clause regarding a minimum of 336 hours payment in the second twelve months of your contract. (not sure what bearing this has)

In essence the relationship has not changed but the way it is worded in the contract has which gets it around the whole temporary workplace issue.

[Jubber]

I have come close to packing it in a couple of times and I live in constant fear that at some time in the future the fruits of all my hard work could be ripped away because som HR bod who I have never had dealings with says the wrong thing to Hector.

Get it out of the company then dear Hector will have nowt. If your papers are in order and no slight of hand can be proved, he can have the 200 pounds float you keep in the company.

Not ideal I know - but not worth the risk of leaving podges of loot in the company account.

[Sausage Surprise]

Why is out of context? If EDS guys can claim T&S, and it's tax deductable, then how are they evading the law as it stands now? There's 3 possibilities:

1. They're breaking the law
2. EDS are picking up the employees tax charge
3. They've found a way round

Further, it seems to me difficult to change the rules on expenses in such a way that EDS won't be affected, but we will.

On what basis do you state that the government hold the view that

That's what they do after 2 years so the permie isn't out of pocket. I worked in Telford for 3 years and Lytham for 4 years for EDS as a permie - home base was in the NE. After 2 years at each they picked up the BIK tax bill.

[TheBigYinJames]

That's what they do after 2 years so the permie isn't out of pocket. I worked in Telford for 3 years and Lytham for 4 years for EDS as a permie - home base was in the NE. After 2 years at each they picked up the BIK tax bill.

I had a stint at the Telford EDS building. Nice looking building, woefully short of toilets. I lasted 10 weeks before packing it in. I was scared at how bad it was, and this was a govt contract.

[Sausage Surprise]

I had a stint at the Telford EDS building. Nice looking building, woefully short of toilets. I lasted 10 weeks before packing it in. I was scared at how bad it was, and this was a govt contract.

Which one - there were 7

I was in Matheson, Boyd, Reynolds and St James during my time there.
Others from what I can remember were Plaza (the big blue one), Partnership and Coalport.

[TheBigYinJames]

Which one - there were 7

I was in Matheson, Boyd, Reynolds and St James during my time there.
Others from what I can remember were Plaza (the big blue one), Partnership and Coalport.

The Plaza.

Contractors weren't allowed to park in their staff car park (which was half empty) and I had to park in the Odeon's car park across the road at £7 a day, a cost which I extracted from them by leaving a few mins earlier than I claimed each day, the swines.

[malvolio]

The Plaza.

Contractors weren't allowed to park in their staff car park (which was half empty) and I had to park in the Odeon's car park across the road at £7 a day, a cost which I extracted from them by leaving a few mins earlier than I claimed each day, the swines.

Still don't get it, do you? That's a good thing: if you can't use teir facilities, you're clearly ot a member of staff so are clearly not an employee so probably cannot be liable for IR35... £35 a week saves you 15% on your gross contract value.

Some people really ought to learn cost accountancy.

[TheBigYinJames]

Still don't get it, do you? That's a good thing: if you can't use teir facilities, you're clearly ot a member of staff so are clearly not an employee so probably cannot be liable for IR35... £35 a week saves you 15% on your gross contract value.

Some people really ought to learn cost accountancy.

You forget, I use a brolly, so IR35 considerations don't affect me. I'd much rather have been able to park outside the door of the place I worked.