Subsistence, Meals and a short term contract?

**malvolio** · 1 August 2006, 22:20

1) Ask your f***ing umbrella - you're paying them so make them earn their money. If they don't tell you, accurately and immediately, leave them to play at being a business and go somewhere else

2) Under 2 years at one major location, you can claim accomodation, food and travel expenses. As soon as you know you will be there more than two years, you can't. (Note that doesn't mean there's a magic cutoff after 24 months, if you get a one year extension after 13 months, that's it.) What constitutes a major location is a bit of a debate - for instance Hector thinks of "City of London" as being one place, but it hasn't been tested yet. For a three month haul, it shouldn't be an issue.

3) Food, accomodation, transport - claim them at cost. You can add £5 a day to cover small unreceipted incidentals like papers, phone call home and other trivia. If you're really worried about £5 though, why the hell are you a contractor?

**ChimpMaster** · 2 August 2006, 08:07

Mal u really have no work to do eh?

**r2d2d3d4d5** · 2 August 2006, 08:57

Originally posted by malvolio

1) Ask your f***ing umbrella - you're paying them so make them earn their money. If they don't tell you, accurately and immediately, leave them to play at being a business and go somewhere else

I'd like to get a different point of view, especially from people in a similar situation to myself. Rather than the "semi official" line, which might vary every time I ring up the company. I had a look at their website (which was a bit vague) and I also had the spill when I first signed up but I've also read some possibly contradictory information on the web. I've not seen or read anything to make me think other umbrella companies are any better.

Originally posted by malvolio

2) Under 2 years at one major location, you can claim accomodation, food and travel expenses. As soon as you know you will be there more than two years, you can't. (Note that doesn't mean there's a magic cutoff after 24 months, if you get a one year extension after 13 months, that's it.) What constitutes a major location is a bit of a debate - for instance Hector thinks of "City of London" as being one place, but it hasn't been tested yet. For a three month haul, it shouldn't be an issue.

OK, thank you.

Originally posted by malvolio

3) Food, accomodation, transport - claim them at cost. You can add £5 a day to cover small unreceipted incidentals like papers, phone call home and other trivia. If you're really worried about £5 though, why the hell are you a contractor?

I didn't consciously choose to be a contractor. It was more of the job turning out to be that after I'd had the interview/job offer. As I really need the experience I really couldn't turn it down. Not that I'm complaining. I'm happy with the job but I just don't want to be paying more tax than I should. I did think of just forgetting about the £5 but over a year it does add up (at least for me).

**malvolio** · 2 August 2006, 09:22

OK, but £5 a day over the average working year is £240, (on which you will have paid tax of around £48). If you were in a real job, you would probably still be paying that much out of your wages anyway.

Agreed you need informed opinion and if you've got pitched into contracting by accident, then you are in a worse position than someone making an specific decision to do so. Go read the first timer guides (here and on www.pcg.org.uk) and understand where you are now at.

And as for umbrellas, if you have to use them (and the jury is out on that) they are providing you with a service, not the other way round, and you are paying for it. If they don't supply answers, don't pay them. You are the source of skills and income, they are the parasite - never forget who it is that earns everyone's money.

**Mordac** · 2 August 2006, 09:55

Originally posted by r2d2d3d4d5

I'd like to get a different point of view, especially from people in a similar situation to myself. Rather than the "semi official" line, which might vary every time I ring up the company. I had a look at their website (which was a bit vague) and I also had the spill when I first signed up but I've also read some possibly contradictory information on the web. I've not seen or read anything to make me think other umbrella companies are any better.

Just as a matter of interest, which brolly are you using? If they are giving you vague information, remember it is you who's liable for any errors on their part when Hector knocks.

**Bradley** · 2 August 2006, 10:20

Only place of work ...

Originally posted by r2d2d3d4d5

Could someone please clarify whether I can claim my meals as subsistence under a short term contract (3 months) (working for an umbrella company)? I understand that I wouldn't be able to at my "regular place of work".

There seems to be a 2 year limit (e.g. if you've been working there for 2 years or you have a 2 year contract) before a temporary place of work terns into a regular place of work. Is that right?

How would that be affected if I was working at various sites during the course of the day? All probably within walking distance of each other.

Does subsistence cover anything else except meals? Eg: gum/drinks (non alcoholic)/snacks/???.

Sorry R2D2 but I'd check with HMRC about this one. If you think that this is the only contract you'll have with this umbrella then you definitely can't claim any expenses because it that circumstance the 2 year rule doesn't apply.

**MrsGoof** · 2 August 2006, 10:24

R2......
go here read digest then comeback if you are still not sure
www.hmrc.gov.uk//manuals/eimanual/EIM32080.htm

**r2d2d3d4d5** · 2 August 2006, 20:25

Originally posted by malvolio

OK, but £5 a day over the average working year is £240, (on which you will have paid tax of around £48). If you were in a real job, you would probably still be paying that much out of your wages anyway.

Agreed you need informed opinion and if you've got pitched into contracting by accident, then you are in a worse position than someone making an specific decision to do so. Go read the first timer guides (here and on www.pcg.org.uk) and understand where you are now at.

And as for umbrellas, if you have to use them (and the jury is out on that) they are providing you with a service, not the other way round, and you are paying for it. If they don't supply answers, don't pay them. You are the source of skills and income, they are the parasite - never forget who it is that earns everyone's money.

I was thinking 48*5*5*0.22=£264 (can I just confirm that I still need to pay NI on tax deductibles?)

As for my Umbrella I'll go back to them and see what specific information they give me.

Originally posted by Bradley

Sorry R2D2 but I'd check with HMRC about this one. If you think that this is the only contract you'll have with this umbrella then you definitely can't claim any expenses because it that circumstance the 2 year rule doesn't apply.

I don't really know. There's a good chance the contract might be renewed (depending on several factors - not just my performance) and there's also a small chance the agency I am employed through might put me forward for another contract (some of the people I work with have had several contracts through the same agency). How exactly does this disqualification work?

www.hmrc.gov.uk//manuals/eimanual/EIM32080.htm doesn't seem to cover this issue.???

Still consuming/digesting though.

**malvolio** · 2 August 2006, 21:23

I was thinking 48*5*5*0.22=£264 (can I just confirm that I still need to pay NI on tax deductibles?)

I know you are new to this and will try to make allowances, BUT....

If you, Mr R2, pay out money for something - food, accommodation, travel, computers, mobile phone, (but perhaps not tennis lessons) - that you wouldn't have paid out if you hadn't been working at the time, then you are entitled to reclaim the cost from your employer. For most sensible contractors, that is their own company, but in your case it is the umbrella company. You should get the whole receipted cost back and there is no tax to pay on it.

However, umbrella companies have a charming (and dubious) habit of treating expenses as some sort of tax-free income scam - perhaps because they can make it look like you're earning money and not getting taxed on it. You aren't.

How your umbrella works is between you and them. Expenses are not income and hence are not taxable, BUT you can only claim expenses you have paid out, no more no less. They are supposed to be cost neutral, if they aren't (the classic example being the company car that you use at weekends) they represent a benefit in kind and that notional income becomes taxable

Finally, the £5 a day allowance is recognition by HMRC that people working away from home are bound to spend some money on odds and sods that are too small for receipts - your daily paper, for example - and so will turn a blind eye to an extra £5 a day from your employer to you for each day you are away from home and working. That's all it is, there are no income tax/NIC angles. Chances are your umbrella is telling fibs, which is why we say to check their facts carefully and be very wary of any lack of clarity. It's not them that gets the tax bill, fines, interest and prison sentence for tax evasion.

Now go do your own homework before I start charging...

Subsistence, Meals and a short term contract?