Negotiating with agencies

[socialworker]

I was going to rely on the intention principle but then I saw this which is a quote from HMRC's own guidance

"As travel expenses are only allowable once more than one assignment has been linked under an overarching contract a single assignment would automatically become a permanent workplace."

This would appear to contradict the idea that one assignment is ok if you can show the intention to do more than one but were just forced to abandon your brolly after one gig due to force of circumstances.

Is there anyone out there who has actually been caught by this i.e. pursued by HMRC for tax allowance claimed under one gig with a brolly?

[kingcook]

I was going to rely on the intention principle but then I saw this which is a quote from HMRC's own guidance

"As travel expenses are only allowable once more than one assignment has been linked under an overarching contract a single assignment would automatically become a permanent workplace."

This would appear to contradict the idea that one assignment is ok if you can show the intention to do more than one but were just forced to abandon your brolly after one gig due to force of circumstances.

Is there anyone out there who has actually been caught by this i.e. pursued by HMRC for tax allowance claimed under one gig with a brolly?

I moved from brolly to my own ltd co for my first ever gig. At the time, my brolly said that if the intention was to have multiple contracts/work places then this would be OK.

My advice would be to just start up your own ltd co. Might be a bit tricky seeing as the gig is due to start on Monday!!

Best speak to an accountant today (i.e. NOW) who can take care of getting your company started up. Technically speaking the contract can't be signed by your new ltd co yet as it doesn't exist. Might be worth delaying the contract a couple of days while the company gets incorporated, not sure on that one.

[Wanderer]

I was going to rely on the intention principle but then I saw this which is a quote from HMRC's own guidance

"As travel expenses are only allowable once more than one assignment has been linked under an overarching contract a single assignment would automatically become a permanent workplace."

This would appear to contradict the idea that one assignment is ok if you can show the intention to do more than one but were just forced to abandon your brolly after one gig due to force of circumstances.

Is there anyone out there who has actually been caught by this i.e. pursued by HMRC for tax allowance claimed under one gig with a brolly?

What counts is that the worker's expectation is that they will work on multiple gigs for the umbrella. If the worker reaches the point where they reasonably expect that they will only work one gig for the umbrella, they are obliged to stop claiming from that point onwards.

See EIM32080 and EIM32084.

It's important to note that as with the 24 month limit, the previous claims for tax relief on travel and subsistence are not retrospectively invalidated. As HMRC put it in EIM32080, "The effect of the rule is not altered where the expectation does not match the outcome".

However, there is no telling what they umbrella might do. The expenses they allow are governed by HMRC's rules but they don't have to allow them at all if they chose not to. There was someone on here who said the umbrella invalidated all their expenses at the end of their contract and withheld the amount from the final payment causing considerable inconvenience so beware.

Another poster (from a well respected accountant) said that they worked through an umbrella on a single engagement and claimed expenses and the umbrella didn't try to disallow the expenses when it turned out to be a single engagement. As far as they saw, there was nothing wrong with that because the expectation was there at the time of the claim.

If the umbrella have paid you everything they owe you then it's unlikely that they can get the money back from you. Even if they try, you can argue that they were and still are valid expenses claimed in good faith. In the worst case they could report the matter to HMRC but as far as I can see you are within the rules set out in HMRC's manuals so no action would be taken against you but you might want to get professional advice on that!

Umbrellas seem to be getting more conservative on the single engagement rules now and disallowing expenses may be happening more often. In the worse case scenario, if the umbrella won't pay the claim for then it may be possible to claim it back on a Self Assessment or P87 but that may cause you cashflow problems by the sounds of it.

I would quietly allow the umbrella to pay out your final payment without suggesting to them that this will be your only engagement through them.

[Wanderer]

1. How hardball would you play it with the agent?

1. As hard as you can. They are pretty thick skinned though. DON'T go arguing the point with your first contact, get it escalated to someone like the finance director or someone like that and you will find that things start moving.

2. Definitely speak to the client manager if you know them personally and get them to push from their side. It's completely unreasonable for the agency to refuse to work with a non-preferred umbrella.

3. The nuclear option is to threaten to use a different agency. Put this to the agency and it will shake them up a bit. It's clear that they aren't a sole supplier to the client, you are already registered with other agencies and you can say you found the other job through contacts at the client so ask the client which agency they would prefer you to use.

Agents do this sort of crap all day every day, don't take any bulltulip from them.

[socialworker]

Thanks

Thanks to everyone who has replied. Eventually I think I may get my own ltd co to avoid all this stuff, maybe at the beginning of the new tax year.

[pauly]

1. As hard as you can. They are pretty thick skinned though. DON'T go arguing the point with your first contact, get it escalated to someone like the finance director or someone like that and you will find that things start moving.

2. Definitely speak to the client manager if you know them personally and get them to push from their side. It's completely unreasonable for the agency to refuse to work with a non-preferred umbrella.

3. The nuclear option is to threaten to use a different agency. Put this to the agency and it will shake them up a bit. It's clear that they aren't a sole supplier to the client, you are already registered with other agencies and you can say you found the other job through contacts at the client so ask the client which agency they would prefer you to use.

Agents do this sort of crap all day every day, don't take any bulltulip from them.

... don't know all the in and outs on an accounting perspective, however if a Ltd comp is a solution - you can have a name up and running by just checking what is available and have it set up by Monday PM if you use a formations agent. I would suggest starting the work if possible and keeping on the right side of clientco. Will probably give you more leverage against the agency if you are in situ and working onsite with the clientco.

[BolshieBastard]

What counts is that the worker's expectation is that they will work on multiple gigs for the umbrella. If the worker reaches the point where they reasonably expect that they will only work one gig for the umbrella, they are obliged to stop claiming from that point onwards.

See EIM32080 and EIM32084.

It's important to note that as with the 24 month limit, the previous claims for tax relief on travel and subsistence are not retrospectively invalidated. As HMRC put it in EIM32080, "The effect of the rule is not altered where the expectation does not match the outcome".

However, there is no telling what they umbrella might do. The expenses they allow are governed by HMRC's rules but they don't have to allow them at all if they chose not to. There was someone on here who said the umbrella invalidated all their expenses at the end of their contract and withheld the amount from the final payment causing considerable inconvenience so beware.

Another poster (from a well respected accountant) said that they worked through an umbrella on a single engagement and claimed expenses and the umbrella didn't try to disallow the expenses when it turned out to be a single engagement. As far as they saw, there was nothing wrong with that because the expectation was there at the time of the claim.

If the umbrella have paid you everything they owe you then it's unlikely that they can get the money back from you. Even if they try, you can argue that they were and still are valid expenses claimed in good faith. In the worst case they could report the matter to HMRC but as far as I can see you are within the rules set out in HMRC's manuals so no action would be taken against you but you might want to get professional advice on that!

Umbrellas seem to be getting more conservative on the single engagement rules now and disallowing expenses may be happening more often. In the worse case scenario, if the umbrella won't pay the claim for then it may be possible to claim it back on a Self Assessment or P87 but that may cause you cashflow problems by the sounds of it.

I would quietly allow the umbrella to pay out your final payment without suggesting to them that this will be your only engagement through them.

Er, no. Not least as I understand it. However, we could argue the interpretation all day. The fact is the brollie could either inform hmrc of the tax needing to be reclaimed or, may withold any monies it already holds for the OP as a consequence.

Its yet another example where you arent in control of the money you are 'earning' since the brollie is the one controling the issue of monies \ interpretation of the single workplace and expense issue.

[jmo21]

Agency probably have some kickback deal with the brolly they want you to use.

[kingcook]

Thanks to everyone who has replied. Eventually I think I may get my own ltd co to avoid all this stuff, maybe at the beginning of the new tax year.

Go ltd co! If not, your loss

Seriously though, ltd co beats brolly hands down. Once you go ltd co you'll wonder why you never did it sooner. Paying accountant with surplus cash from VAT FRS makes that a saving over a brolly anyway, without taking anything else into account.

All the best

[NotAllThere]

What counts is that the worker's expectation is that they will work on multiple gigs for the umbrella. If the worker reaches the point where they reasonably expect that they will only work one gig for the umbrella, they are obliged to stop claiming from that point onwards. ...

This makes sense. If you work for BigConsultancy, you certainly will have T&S paid for, even if you quit after your first assignment, and never poke your nose into the main office. However, it is what is decided in the courts that will make the law. Until then, even HMRC's interpretation is just speculation.

@socialworker - I've edit your thread title. Using words like "urgent" is often seen as quite rude.