Umbrella company qs about income and claims

[Lewis]

Giant

[TroubleAtMill]

The OP also needs to consider their PAYE Code which affects, amongst other things, the tax-free allowance.

[original PM]

all brollies try to get you to claim as much in the way of expenses as possible because

a) It raises your take home pay and so makes them look better
b) To get VAT receipts which they can use to claim VAT back from HMRC to get more money.

with regards to your specific problem - it will depend on a number of factors

1) What is your tax code - should say on the PAYE informaion they send to you - if it is BR or even a wk1 code this will be the main reason why the take home is so low.

2) If you are on £900 per week it means you will earn £46k (approx) which does put about £10k of your earnings in the 40% tax bracket - in addition how much have you already earned this year?

[Brussels Slumdog]

Umbrella companies and a dispensation from the Inland Revenue

Umbrella companies normally have a dispensation from the Inland Revenue
which allows them to process some expenses without having to record them on the P11D or file receipts.
However, the dispensation does not apply to you, as an individual, and therefore you must keep receipts for any expense that you claim.

http://www.contractorumbrella.com/um...mpanies.html#1

My umbrella allows £21 meals per day £70 accomodation or £95 London
plus £5 non receipted.
When you eat the £21 meal is your choice I guess. I claim my breakfast
in the accomodation part.

[LisaContractorUmbrella]

Umbrella companies normally have a dispensation from the Inland Revenue
which allows them to process some expenses without having to record them on the P11D or file receipts.
However, the dispensation does not apply to you, as an individual, and therefore you must keep receipts for any expense that you claim.

http://www.contractorumbrella.com/um...mpanies.html#1

My umbrella allows £21 meals per day £70 accomodation or £95 London
plus £5 non receipted.
When you eat the £21 meal is your choice I guess. I claim my breakfast
in the accomodation part.

Just to clarify the final point - just because an umbrella company has £21 per day for meals on its dispensation does not mean that you are entitled to claim £21 per day on food; HMR&C criteria for claiming meals as an expense would still have to be met.

[NotAllThere]

Groundhog day

[brollyman]

[QUOTE=original PM;989454]all brollies try to get you to claim as much in the way of expenses as possible because

a) It raises your take home pay and so makes them look better
b) To get VAT receipts which they can use to claim VAT back from HMRC to get more money.QUOTE]

This is all sounding very familiar and surely covered in the stickys....

Any (reputable) umbrella will tell all contractors to claim only what they have actually spent. There is nothing worse for umbrellas who make huge assumptions at the registration phase than receiving countless calls from contractors complaining that they have not been paid as much as the amount given in their initial illustration.

The simple rule is claim for what you have spent, no more, no less and only if the expenses is allowable under HMRC regulations.

We are obliged to audit expense claims and if a contractor appears to be claiming up to the dispensation amount every day, then they will single themselves out for investigation. We can (and have) reported contractors who were unable to show valid receipts for their claims. It's the contractor who bears the liablity, not us.

[original PM]

This is all sounding very familiar and surely covered in the stickys....

Any (reputable) umbrella will tell all contractors to claim only what they have actually spent. There is nothing worse for umbrellas who make huge assumptions at the registration phase than receiving countless calls from contractors complaining that they have not been paid as much as the amount given in their initial illustration.

The simple rule is claim for what you have spent, no more, no less and only if the expenses is allowable under HMRC regulations.

We are obliged to audit expense claims and if a contractor appears to be claiming up to the dispensation amount every day, then they will single themselves out for investigation. We can (and have) reported contractors who were unable to show valid receipts for their claims. It's the contractor who bears the liablity, not us.

It is covered in stickeys etc but it seems to be a slow news day.

Problem is during the sales process the take expected take home pay figure is artificially enhanced by putting expenses in up to the legal limit - and thus when the punter gets his or her first pay cheque it is nowhere near the advertised value and we get posts on here.

Bunch of robbing tw@s

[Brussels Slumdog]

Not difficult to eat £21 per day

Just to clarify the final point - just because an umbrella company has £21 per day for meals on its dispensation does not mean that you are entitled to claim £21 per day on food; HMR&C criteria for claiming meals as an expense would still have to be met.

I don't find it difficult to eat £21 per day plus I need to keep receipts anyway
for Belgian tax reasons.
In order to claim under double taxation rules,I have to be prepared to prove
to the Belgians that I was phsically in the UK.

Golden rule "Always keep receipts in spite of what the umbrella tells you"
This could be difficult if you are an Aussie backpacker renting a bed sit
in London on a 2 year contract.
Where do you put all those receipts in that backpack?

[brollyman]

It is covered in stickeys etc but it seems to be a slow news day.

Problem is during the sales process the take expected take home pay figure is artificially enhanced by putting expenses in up to the legal limit - and thus when the punter gets his or her first pay cheque it is nowhere near the advertised value and we get posts on here.

Bunch of robbing tw@s

That's exactly the point I'm making.

I know most umbrellas tend to get tarred with the same brush but a lot now seem to be cleaning up their act where it comes to illustrations.

I can only speak from my own firm's point of view - we take a conservative approach at the illustration stage and will drill down to the ACTUAL expenses the contrator is likely to incur when they start their role. Saves a lot of angry calls as in nine cases out of ten, when they get their first payslip, the net figure is the same as the illustrated figure.