Withheld Expenses - Can they do this?

**questiontime** · 26 February 2010, 11:36

Yes, they cannot pay expenses any more as you have left their employment. This expense comes out of your contract earnings. I assume you understand this point. So,they have already paid you, though, after deducting tax.

The expense claim will be 800*.40=320 ... You would have paid no more than 40% tax. so the max savings you are looking at is 130. Reclaim this when you submit your tax return for 2009-10. Make sure your accountant knows about the claim in advance.

Not worth loosing sleep over this amount.

Originally posted by JB1973 View Post

Hi All

Would just like to have some feedback on what my old umbrella company has done, has this happened to anyone, did you get a resolution?

So I was working though an umbrella company for the first three months of my contract, everything was OK, but they failed to make the payment for my Mileage expenses over three months, despite me putting the claims in at the same time as my timesheet - when challenged they said this was becasue I had not supplied the reciepts, which I promptly did and they confirmed there was around 800 miles outstanding.

During this time I had decided to go limited and informed them of my plans. Now, after starting the Limited company, they are saying that they cannot pay my expenses and have advised me to put this against my current year end tax return - they claim that cannot pay my expenses as I am no longer an employee

Needless to say, I am not impressed with this and was looking for a bit advice from the forum if anyone has had a similar experience?

Cheers
JB

**Hex** · 26 February 2010, 12:44

When the umbrella receive the money that they invoice your client for, they will first subtract expenses from it and then the rest will get distributed to you as salary after deduction of Employer's NI.

I am presuming that they didn't subtract the expenses cos you didn't give them the paperwork in time so they distributed you all the money as salary.

If this is the case, then you would have had to get this corrected while you still worked for them in order for them to pay you. They're not going to give you money now as your account has 0 left in it after you've left them and been given your P45. There are no funds left that can be distributed as expenses.

You can, I believe, claim back the expenses on your tax return at the end of the year.

**MarkOD** · 26 February 2010, 12:49

As Hex says, you've already been paid for this so they can't backdate. you need to have a payment in order to offset these expenses. Don't forget these are only offset they don't pay these to you. the other alternative is to put these through your LTD company however i'm sure people on here will say you can't do that as in theory this mileage should have gone through the Umbrella. In theory though, overall it will even itself out

**BolshieBastard** · 26 February 2010, 12:55

Bless. How did I know this thread was about a brolly?

Just say 'NO!' to brollies!

**malvolio** · 26 February 2010, 13:01

Also...

As someone else discovered recently, if you only have one client through the brolly, the "temporary workplace" rules doesn't apply and you can't claim expenses anyway. Apparently. And the brolly world will only get worse when the AWD takes effect next year - allegedly...

I rarely agree with BB (and vice versa, come to that), but this time I'm with him.

**Churchill** · 26 February 2010, 13:02

Originally posted by BolshieBastard View Post

Bless. How did I know this thread was about a brolly?

Just say 'NO!' to brollies!

I'm with Giant, have been for years - no problems whatsoever.

Very happy with their service.

**Sausage Surprise** · 26 February 2010, 15:05

Originally posted by Churchill View Post

I'm with Giant, have been for years - no problems whatsoever.

Very happy with their service.

and so is Mr Brown.

**MPwannadecentincome** · 26 February 2010, 17:20

Originally posted by malvolio View Post

Also...

As someone else discovered recently, if you only have one client through the brolly, the "temporary workplace" rules doesn't apply and you can't claim expenses anyway. Apparently.

really - can I have more information please?

Interesting, what is the difference between big consultancy co bodyshopping their staff out to different places (one client at a time) and those travelling expenses being allowable yet for a brolly employee this is different?

**malvolio** · 26 February 2010, 18:01

BigCo people have a nominated permanent place of work, which may or may not be geographically logical, so client sites are always temporary. Hence travel is always allowable. And since their place of work hasn't changed, the 24 month rule doesn't kick in either.

Apart from the 24 month thing, that works for brollies as well, as long as you have more than one assignment, which makes any Client Site a temporary workplace. If however you only work for one client, how is that a temporary location?

Yes, I know it's stupid, but that's what one brolly claimed: there's a thread on it on here somewhere.

As for the AWD, one interpretation is that brolly users will lose even that concession and won't be able to claim expenses anyway. I've no idea how that one will turn out.

Withheld Expenses - Can they do this?