Another promise of 85%!

[ilovehr]

Another firm saying they can net you 85% though an umbrella.....

Starting to become a bit of a habit now - are umbrellas really that desperate for business???

[DaveB]

Do a quick search on the forums. You'll find some interesting reading.

[MarkOD]

it's not a promise though is it. They're saying in theory you can come out with 85%

[MarkOD]

apologies you're right, there's a guy i'm working with, he commutes each day and he does it. I've tried explaining that he's the one who'll be in the sh*t. Some people in my opinion are completly naive. If you're not spending it you can't claim it, simple as!

[Maslins]

If a contractor follows an umbrella's advice and claims a whole load of expenses they didn't incur, and that contractor gets caught by HMRC...wouldn't the contractor have a pretty good case against the umbrella?

Surely the umbrella owes the contractor a duty of care, and if they've recommended claiming for expenses that weren't incurred, isn't that negligence?

Or do the umbrellas simply train all their staff to be very careful about what they actually say, so it would always be argued that the contractor had simply misunderstood?

[TheFaQQer]

If a contractor follows a dodgy umbrella's advice and claims a whole load of expenses they didn't incur, and that contractor gets caught by HMRC...wouldn't the contractor have a pretty good case against the umbrella?

Possibly - not sure exactly what law / tort applies though.

Surely the umbrella owes the contractor a duty of care, and if they've recommended claiming for expenses that weren't incurred, isn't that negligence?

I'm not sure - it's not as if they are accountants that you are paying for professional advice. If you work for a company, and someone there says "why don't you claim this" and you do (but shouldn't) - would you have a claim against your employer? Possibly, but I'm thinking probably not.

Or do the dodgy umbrellas simply train all their staff to be very careful about what they actually say, so it would always be argued that the contractor had simply misunderstood?

Try getting it in writing. Then you'll see the whole 85% unravel quickly!

Three questions to ask umbrella staff when they are talking about expenses and how much you can claim:

1) Are you sure?
2) Will you put that in writing?
3) Will you indemnify me against any legal action that HMRC might undertake against me, based on this advice?

Answers - "yes", "um, no, you don't need it in writing, trust me", "no. Click. <disconnected tone>"

[MarkOD]

to be fair the brollies do get a bad press and not always warranted, you're going to get bad apples in everything. i'm with one because i prefer the ease of use and my contract and working practice genuinly aren't outside of IR35. I've spoke to colleagues who are doing the whole salary/dividend split but haven't even heard about IR35 but say "my accountant says it's the most tax efficient way" which obviously it is but........... If you don't know if you're outside of IR35 then aren't you just as bad as a brolly who's telling you to claim certain expenses you might not be incurring a cost for?

[malvolio]

Some whle back, when we just beginning to get concerned about optimisitic expense policies, i spent a few hours unravelling Prosperity4's website. Buried in the depths of the small print was a line about the contractor needing to keep all receipts to prove expenditure in the event of a query.

[ASB]

If you're not spending it you can't claim it, simple as!

[ducks for cover]
That is not strictly true. In the case of scale rates (which is different from a dispensation) then you can claim the scale rate provided you spent something. It seems as though some brollys might be moving towards scale rates, However the sampling regime is pretty stringent (the basic theory being it represent a general average). I do rather imagine that HMRC will be tightening up on scale rates (again) soon. It is only very recently they widened again who they were prepared to grant scale rates to.
[/ducks for cover]

[TheFaQQer]

[ducks for cover]
That is not strictly true. In the case of scale rates (which is different from a dispensation) then you can claim the scale rate provided you spent something. It seems as though some brollys might be moving towards scale rates, However the sampling regime is pretty stringent (the basic theory being it represent a general average). I do rather imagine that HMRC will be tightening up on scale rates (again) soon. It is only very recently they widened again who they were prepared to grant scale rates to.
[/ducks for cover]

I was going to mention that, but thought I'd better not

HMRC are reviewing expenses allowed by umbrellas, so I wouldn't rely too much on scale rates and dispensations, to be honest.