Best Umbrella Company to use?

[gezzagregz]

The umbrella company have advised that he can claim £26 per day, every day, just for going to work - even if you were allowed to claim for lunch and breakfast it is unlikely to add up to anywhere near £26. The fact is that, if you are going to the same place of work each day, you cannot claim for the cost of meals - just because you spend money on something it doesn't automatically become an expense.

I dont want to get wrapped up in this, if his meals do go up to 26quid a day then why cant he? i dont know his contract status ask him! iam sure your aware of the 24month rule? if he aint gone over that why cant he? he aint classed as a permie. I know what expenses i can and can not claim, and i claim my meals as an expense, as a contractor a million miles away from IR35 i can. if i was a permie it would be different. I think your wrong? Maybe i am wrong. anyone else help?

[moorfield]

Used Parasol for my first two years, changed to ltd co 12 months ago.
Didn't really have any problems with them except for their famous system downgrade. Eventually got fed up of their slowly increasing monthly fee and seeing that employer NI amount on each payslip.

[LisaContractorUmbrella]

I dont want to get wrapped up in this, if his meals do go up to 26quid a day then why cant he? i dont know his contract status ask him! iam sure your aware of the 24month rule? if he aint gone over that why cant he? he aint classed as a permie. I know what expenses i can and can not claim, and i claim my meals as an expense, as a contractor a million miles away from IR35 i can. if i was a permie it would be different. I think your wrong? Maybe i am wrong. anyone else help?

For something to be classified as an expense, the cost has to be incurred wholly and exclusively because of the contract. The way the IR view it is that you would have to eat lunch and breakfast regardless of whether or not you are contracting and therefore there is no additional cost to you and subsequently no grounds for claiming the expense.

[salazie]

It's my understanding that breakfast and dinner are ok as expenses as long as you're working away from home (if staying in hotels etc. someone can't be expected to be able to make their own beakfast and dinner and so has to eat out or in the hotel).

Lunch is different as most people don't take a packed lunch in to work, and therefore staying away from home is no different to commuting from home. (in that they'd be paying for lunch regardless).

[gezzagregz]

For something to be classified as an expense, the cost has to be incurred wholly and exclusively because of the contract. The way the IR view it is that you would have to eat lunch and breakfast regardless of whether or not you are contracting and therefore there is no additional cost to you and subsequently no grounds for claiming the expense.

Well most umbrellas have a dispensation with HMRC which allows them to offer a subsitence to the clients under the umbrella, its like an agreement, and HMRC don't have a problem with it providing contractors are claiming fairly (claiming and have receipts with proof if needd). I do know that there is a complicated debate on this at the moment. But as of now if they have a dispensation that is £26 then the client can claim UPTO £26 pound. Its just like an extra perk to clients working under umbrellas. Different umbrellas have different dispensation agreements with HMRC. But as he stated; 'if your working day in more than 10hour including travel and excluding breaks.....' Thats the umbrella's rules and regs and as an employee of that umbrella you must follow that. so if your working a 12 hour day and incur £15 on breakfast and dinner, as an employee of the umbrella that will be fine to put down as an expense (Making sure you keep evidence of the expense)

I guess its an ambiguous subject and needs clarification.

[gezzagregz]

It's my understanding that breakfast and dinner are ok as expenses as long as you're working away from home (if staying in hotels etc. someone can't be expected to be able to make their own beakfast and dinner and so has to eat out or in the hotel).

Lunch is different as most people don't take a packed lunch in to work, and therefore staying away from home is no different to commuting from home. (in that they'd be paying for lunch regardless).

its down to employer and employee relationshipes and the employer and IR relationships. If a contractor has to be up at the crack of dawn, and then is working a 14 hour day including travel (OTT i know, but iam sure some of us have done) the umbrella offers a perk. That perk is the subsitence that they can claim wether they stay in a hotel or if they have a working day longer than 10hours including travel time, they can claim up to the agreed amount as an expense.

[LisaContractorUmbrella]

Well most umbrellas have a dispensation with HMRC which allows them to offer a subsitence to the clients under the umbrella, its like an agreement, and HMRC don't have a problem with it providing contractors are claiming fairly (claiming and have receipts with proof if needd). I do know that there is a complicated debate on this at the moment. But as of now if they have a dispensation that is £26 then the client can claim UPTO £26 pound. Its just like an extra perk to clients working under umbrellas. Different umbrellas have different dispensation agreements with HMRC. But as he stated; 'if your working day in more than 10hour including travel and excluding breaks.....' Thats the umbrella's rules and regs and as an employee of that umbrella you must follow that. so if your working a 12 hour day and incur £15 on breakfast and dinner, as an employee of the umbrella that will be fine to put down as an expense (Making sure you keep evidence of the expense)

I guess its an ambiguous subject and needs clarification.

All umbrella companies DO have dispensations but they do not dictate what expenses can and can't be claimed by the individuals who work through them. A dispensation just means that the umbrella company does not have to file a P11D and receipts for the expenses that are mentioned therein. Different umbrella companies do not have different 'agreements' with the Inland Revenue - the IR have dictated what expenses are allowable under what circumstances, umbrella companies have no say in that. To reiterate - if you go to the same place of work each day you cannot claim for breakfast and lunch - the entry on the dispensation will only apply to those people who are using the umbrella company and working on detached duty. From the IR website:

The cost of food, drink and accommodation is not in general an expense incurred wholly and exclusively for business purposes, since everyone must eat in order to live. They are (either wholly or partly) normal costs of living incurred by all and not as a result of trading, see BIM37900 onwards.

[gezzagregz]

Think i will just phone IR up and get an answer from them, i have seen so many different opinions i dont know which one to take!

[Moose423956]

Think i will just phone IR up and get an answer from them, i have seen so many different opinions i dont know which one to take!

"Hello Hector, my name is gezzagregz, and I'm going to be working through an umbrella company. Will you come and investigate me please."

My philosphy is never talk to Hector. If you ignore them long enough, they might go away.

[TheFaQQer]

Well most umbrellas have a dispensation with HMRC which allows them to offer a subsitence to the clients under the umbrella, its like an agreement, and HMRC don't have a problem with it providing contractors are claiming fairly (claiming and have receipts with proof if needd).

It's quite simple.

A dispensation means that the company holding the dispensation does not need to declare the reimbursement of valid businesses expenses on a P11D, according to the conditions of the dispensation. Some, for example, may only provide a dispensation for accommodation, not for food. Some will have a limit on them, for example, the Danbro dispensation means that subsistence expenses, which are under £26 a day, and are valid business expenses, do not need to be declared on an employee P11D. I have a dispensation for my company that says that I don't need to declare any expenses on it, with no limit.

But as of now if they have a dispensation that is £26 then the client can claim UPTO £26 pound. Its just like an extra perk to clients working under umbrellas. Different umbrellas have different dispensation agreements with HMRC. But as he stated; 'if your working day in more than 10hour including travel and excluding breaks.....' Thats the umbrella's rules and regs and as an employee of that umbrella you must follow that. so if your working a 12 hour day and incur £15 on breakfast and dinner, as an employee of the umbrella that will be fine to put down as an expense (Making sure you keep evidence of the expense)

As I have said, my company has a dispensation with no limit on it. Following the logic that having a dispensation is an extra perk, that would mean that I could claim an infinite amount of expenses, because my dispensation "allows" me to do it. It means no such thing, however - it means that I don't need to report valid business expenses on a P11D. That is all - it does not mean that I can claim expenses that I never incurred; it does not mean that I can bump my expenses up to a round figure.

Regardless of what your employer has to report to the tax man, if you do not incur a valid business expense, then you cannot claim it. There is no ambiguity - having a dispensation makes paperwork easier for the employer, but does not grant the employee carte blanche to claim for expenses that have never been incurred.

The simple way to clarify this is to ask the umbrella company three questions:

1. Can I claim £XX a day for subsistence?

If yes, then ask

2. Do I need to keep receipts for the expenses?

If no, then ask

3. So I assume that your company will indemnify me against the penalty or other costs imposed during an HMRC investigation into my expenses?

The third one is the one that they will then start to back-track on the other two responses.