Free Stuff With An Umbrella Company

**malvolio** · 6 February 2008, 00:46

Originally posted by Jsecure View Post

I know you can get great tax writeoffs with your own company and stuff...

But can I do something like buy a server, or a laptop, and send the receipt to my umbrella company, and get all the money back as a deduction of the income tax I pay, if I claim it is a resource I needed to be the professional I am ... (and make the income I made)?

Does that work with umbrella companies, or is that strictly a thing for your own business?

No. Next...

BTW, how do you equate being a professional with working as an employee of a third party?

**Jsecure** · 6 February 2008, 07:28

Originally posted by malvolio View Post

No. Next...

BTW, how do you equate being a professional with working as an employee of a third party?

Uh, pass? Look, I am new to contracting, and I know a guy who is contracting with an umbrella company who says he can give them stuff like receipts from taxi rides and purchases of hardware and stuff, and he can claim he needed it to do his job, and therefore make his income, and so he gets that much money off the tax he has to pay.

Now I don't know if he's perhaps doing the wrong thing, or maybe what he's doing will come back to haunt him - I just want to know from any existing umbrella contractors with experience (sort of why I'm here), is this genuine... Can I do that, just save receipts from computer purchases and stuff and take that money off my year tax bill?

Do I need a LTD to do that or can I do that with an umbrella company?

Thanks...

**NotAllThere** · 6 February 2008, 08:18

You seem to think that a company purchase of a £1000 laptop will result in a tax reduction of £1000. That's not how it works. A laptop purchase by a company (ignoring depreciation for simplicities sake), is an expense.

Company expenses are deducted from company income, thereby reducing profit. Profit is what the company pays tax on. So if the company buys a £1000 laptop, when corp. tax rates are say 20%, it will pay £200 less tax than if it hadn't bought the laptop. Which can be viewed as the company paying only £800 for it.

Note - it is NOT your laptop. It belongs to your company. So with an umbrella company, the umbrella company would own the laptop. And would have bought it out of your income. I'm sure they'd be delighted.

**HYpno27** · 7 February 2008, 12:28

One big Umbrella allows this

The costs of hardware, software and personal protection equipment essential to your role can be claimed. There is no limit to the amount that can be claimed, although you must complete the sundry letter provided detailing how each purchase supports your role, along with the original receipt.

Claiming the full cost of any purchase requires a security deposit* equivalent to 10% of the purchase price to be paid. The equipment will become the property of Parasol, with the option to purchase it after a qualifying period
at a second-hand value assumed to be equal
to 10% of the purchase price.

**malvolio** · 7 February 2008, 12:49

Originally posted by HYpno27 View Post

One big Umbrella allows this

The costs of hardware, software and personal protection equipment essential to your role can be claimed. There is no limit to the amount that can be claimed, although you must complete the sundry letter provided detailing how each purchase supports your role, along with the original receipt.

Claiming the full cost of any purchase requires a security deposit* equivalent to 10% of the purchase price to be paid. The equipment will become the property of Parasol, with the option to purchase it after a qualifying period
at a second-hand value assumed to be equal
to 10% of the purchase price.

So you pay for it out of your taxed income, sell it to them at cost, and then buy it back at 10% of the original cost once it's obsolete. Hey, great idea - wonder why everyone doesn't do that.

And you get to pay two lots of VAT, one on the original and one on the buyback.

And you're paying more than an accountant would cost to pay 20% more taxes than you need to.

OK, I'll buy that. Where do I sign...

**miffy** · 7 February 2008, 12:57

Originally posted by malvolio View Post

And you're paying more than an accountant would cost to pay 20% more taxes than you need to.

I'm still amazed at how many contractors I've worked with are using brollies.

I'm gonna get flamed for saying this, but if you don't have a limited you're not a real contractor are you?

**FiveTimes** · 7 February 2008, 13:00

Originally posted by miffy View Post

I'm still amazed at how many contractors I've worked with are using brollies.

I'm gonna get flamed for saying this, but if you don't have a limited you're not a real contractor are you?

**Peoplesoft bloke** · 7 February 2008, 13:04

Originally posted by HYpno27 View Post

..... personal protection equipment essential to your role......

????

Guns, Knives?

**TheFaQQer** · 7 February 2008, 13:29

Originally posted by miffy View Post

I'm still amazed at how many contractors I've worked with are using brollies.

I'm gonna get flamed for saying this, but if you don't have a limited you're not a real contractor are you?

There are some circumstances where an umbrella company is fine - e.g. if you are only going to do a contract for 6 months between permie jobs, then I wouldn't bother with getting a new Ltd and then closing it down.

As a longer term option, I wouldn't use an umbrella, but I know people that have.

Free Stuff With An Umbrella Company