Relationship with Umbrella broke down - witholding expenses

**MPwannadecentincome** · 11 June 2009, 16:12

Expenses can only be paid out of earnings (invoices to agency or client) that has not already been paid as PAYE.

Unless you have future earnings to come through to the umbrella then you have to accept you have now lost those expenses.

Well, at least until you fill in your tax return, enter there the value of the expenses you did not get paid and your year end tax calculation will take those into account (in theory).

**pzz76077** · 11 June 2009, 16:26

What expenses??

Are these expenses that come out of the taxable portion of the income from umbrella co or expenses that the end client has agreed to reimburse you that are detailed in part of your contract??

The UC should have no problem paying you non taxable expenses immediately and to withhold these would be illegal. If they are waiting for client co (via the agency) to reimburse expenses then they are correct to say that they wont pay these 'till they have received funds to cover these.

Also note that if you end your contract with umbrella co, how does that effect the contract chain back to client co??
Technically you have no remit to work (or be paid) without some kind of contractual mechanism between you and the agency.

Hope this helps.

PZZ

**pzz76077** · 11 June 2009, 16:29

Also..

Also note that many agencies have a policy of not reissuing contracts mid term to a new UC or Ltd co.

PZZ

**DaveTT** · 11 June 2009, 17:16

Hi,

Thanks for the reply, these are not chargable expenses but tax deductable expences, transport & subsistence.

My contract is actually being renewed at the end of this month, and I said during the heated discussion that I would be 'dumping' the company for another at the end of the term, but the manager of the umberella took things pretty personally and said he would post my P45 today... I didnt argue with this as I want shut of them, but I did state that the contract is not settled until everything is paid up.

Can they just terminate like this? especially if there is another months wages and expences yet to go through, on top of aprils and mays expenses?

In his email rely he has twisted my words round and said the relationship is over as per my request, where as what I actually said in my email was that they could consider it over once everything is settled up..

I have not ended my contract with the UB, just so we are clear, I have however told them in no uncertain terms I will not be renewing with them... and the MD kept going on about issuing a p45.

I will most certainly stick with them untill the end of my contract (end of June) if needs be to keep everything straight...but can they just turf me out and leave me minus 3 months expenses and a month salary, if my agency will not swap over 'mid term' as it were?

Thanks very much for your comments

**DaveTT** · 11 June 2009, 17:24

Just to add,

I am due one more final monthly payment on this contract, so surely I can ofset the 3 months expences against that payment?

I have a feeling that he thinks he has railroaded me into terminating early, but I have checked what I have written, and luckily I was carefull with my wording, and did not throw the towel in as such, I just said 'once we are square, you can consder the contract terminated' or words to that effect.

I have since replied, stating as such, but have had no word back yet.

Money is very tight at the moment, I only make £90 per day so I really count on the expenses to help me get through the month, so any advice is greatly appreciated!!:

**LisaContractorUmbrella** · 12 June 2009, 08:06

If you have an outstanding invoice raised with your umbrella company, that your agency has received and is going to pay then they should process your expenses with your final payment. However, non-chargeable expenses effectively reduce your taxable income so, if the value of 3 months expenses exceeds the value of the invoice it will not be possible for your umbrella company to process all of them.

If your umbrella company is of the opinion that you have terminated your contract with them, they may raise a credit note against the invoice that you have outstanding and issue your P45, in which case any remaining expenses you have will not be processed. They can, however, be claimed via self-assessment.

HTH

**pzz76077** · 12 June 2009, 08:19

If they are issuing a p45 then you are an employee and they can let you go any time.

My advice would be to tell them that you have chanced your mind and will be sticking with them. Heat of the moment and all that.

Once you have got your money, send them notice that you are leaving remembering to give the contracted period of notice. Advise your agency of what you are doing and switch contracts/payroll co on the agreed date.

Make sure you get your holiday pay, dividends etc before you go also...

PZZ

**DaveTT** · 13 June 2009, 08:38

Thanks for the advice all!

It's good to know about the self assesment thing, I thought there must be some way to recover the expenses !

It looks like they are playing ball now anyway, as my contract is renewed this month anyway... they agreed via email to process the final invoices so it should be nice and tidy... even though it turns out they have issued a P45, they said to send it straight back to them.

I have given my agency a heads up about the contract renewal, so all I think I need to do now is get a new umbrella in place to take over and fingers crossed it should be a smooth transition... man that was a frustrating couple of days!!!

Thanks again!

Relationship with Umbrella broke down - witholding expenses