Hi all,
Just after some advice to check I am not going mad. I work through a compliant Umbrella company, current client co. wants to send me from my base location (Halifax) all over the country for meetings, usually about once a week to either London, Bristol or Belfast. To date it has always been London or Bristol, so I can book a pre-paid train ticket using their travel supplier and there are no problems. Now Belfast trips are expected, which means flights and hotels which cannot be booked by the client pre-paid – I instead have to pay and claim back, again no problem as I have done this many times over my 15 years as a contractor. The client signs my expenses claim off, then the umbrella company raises an invoice which the agency pays.
Problem is… the umbrella company think that these expenses payments are taxable. They are lumping it all togethor with my taxable income, as I am well into the higher rate tax bracket I’m being charged higher rate tax for these expenses. I have challenged this repeatedly and am being told that unless I can prove lack of SDC, the expenses are taxable. I think there are getting confused between normal commuting expenses (which were banned unless no SDC is provable in 2016) and off-site travel, which is still permitted (I think).
Having reviewed the 2016 legislation I think I am right that off-site travel paid for by the client is not taxable, see example given by HMRC below:
““Example 2
As in example 1, Jim is employed under an overarching contract of employment by the umbrella company under arrangements when he would be an employee of the client if engaged directly.
During the 3 months Jim is working in Crawley at X Ltd’s warehouse he is asked to spend 3 days working at X Ltd’s other warehouse in Shoreham.
He isn’t entitled to relief for travel and subsistence in respect of travel to and from Crawley, but is entitled to a deduction under ITEPA section 338 for his travel and subsistence costs to Shoreham, as this is travel to a temporary workplace and is not a new engagement. There’s also a disregard for NICs purposes for his travel and subsistence costs to go to Shoreham.”
Since moving to Umbrella I don’t keep as much of an eagle eye on the boards as I used to so I am not up to speed with the latest tax goings on. Is my understanding of this still correct? If it is and in the event that the Umbrella won’t back down from their interpretation do I have any way to force the issue? Would prefer not to move Umbrella right now due to pension and re-mortgage issues this may case.
Cheers!
Just after some advice to check I am not going mad. I work through a compliant Umbrella company, current client co. wants to send me from my base location (Halifax) all over the country for meetings, usually about once a week to either London, Bristol or Belfast. To date it has always been London or Bristol, so I can book a pre-paid train ticket using their travel supplier and there are no problems. Now Belfast trips are expected, which means flights and hotels which cannot be booked by the client pre-paid – I instead have to pay and claim back, again no problem as I have done this many times over my 15 years as a contractor. The client signs my expenses claim off, then the umbrella company raises an invoice which the agency pays.
Problem is… the umbrella company think that these expenses payments are taxable. They are lumping it all togethor with my taxable income, as I am well into the higher rate tax bracket I’m being charged higher rate tax for these expenses. I have challenged this repeatedly and am being told that unless I can prove lack of SDC, the expenses are taxable. I think there are getting confused between normal commuting expenses (which were banned unless no SDC is provable in 2016) and off-site travel, which is still permitted (I think).
Having reviewed the 2016 legislation I think I am right that off-site travel paid for by the client is not taxable, see example given by HMRC below:
““Example 2
As in example 1, Jim is employed under an overarching contract of employment by the umbrella company under arrangements when he would be an employee of the client if engaged directly.
During the 3 months Jim is working in Crawley at X Ltd’s warehouse he is asked to spend 3 days working at X Ltd’s other warehouse in Shoreham.
He isn’t entitled to relief for travel and subsistence in respect of travel to and from Crawley, but is entitled to a deduction under ITEPA section 338 for his travel and subsistence costs to Shoreham, as this is travel to a temporary workplace and is not a new engagement. There’s also a disregard for NICs purposes for his travel and subsistence costs to go to Shoreham.”
Since moving to Umbrella I don’t keep as much of an eagle eye on the boards as I used to so I am not up to speed with the latest tax goings on. Is my understanding of this still correct? If it is and in the event that the Umbrella won’t back down from their interpretation do I have any way to force the issue? Would prefer not to move Umbrella right now due to pension and re-mortgage issues this may case.
Cheers!
Comment