Expenses question

[northernladuk]

FTFY

The same is true of your own limited company.

Very true but I hope people see Umbrellas as a short term solution so much more likely to apply than a LTD.

[barrydidit]

FTFY

The same is true of your own limited company.

I didn't know that. Bit of an extreme example but what happens in the case of guys who have been at clientco for years and then go perm with them? They'll only have been able to claim expenses for 2 years (subject to the usual caveats) but may have been onsite for another couple of years after that. Would they then owe income tax on those expenses payments from 4 and 3 tax years previous? I can't imagine many people get pulled up on that one.

[TheFaQQer]

I didn't know that. Bit of an extreme example but what happens in the case of guys who have been at clientco for years and then go perm with them? They'll only have been able to claim expenses for 2 years (subject to the usual caveats) but may have been onsite for another couple of years after that. Would they then owe income tax on those expenses payments from 4 and 3 tax years previous? I can't imagine many people get pulled up on that one.

Tax would be due on all expenses which have been claimed which shouldn't have been.

So, if you only worked at one place of work, then it cannot be a temporary place of work, so any travel, subsistence or accommodation expenses claimed would be taxable.

[northernladuk]

Tax would be due on all expenses which have been claimed which shouldn't have been.

So, if you only worked at one place of work, then it cannot be a temporary place of work, so any travel, subsistence or accommodation expenses claimed would be taxable.

This is only true in a situation where you do one gig only through your LTD? With a LTD your home is your perm location which isn't the same as an Umbrella.

[TheFaQQer]

This is only true in a situation where you do one gig only through your LTD? With a LTD your home is your perm location which isn't the same as an Umbrella.

Yes.

There was some clarification recently about it, which made it clear that if you have done multiple gigs (whether via umbrella or Ltd), then the locations are temporary. This updates the guidance from HMRC from a couple of years back which said that the last gig means it's a permanent location.

I just forgot the recent clarification when I wrote the above.

[TheFaQQer]

Be very careful with Umbrellas though. You won't be able to claim expenses for your last gig as it will become your permanent place of work not a temporary one. The same if you only do one gig for them. It will automatically be a perm one and you will have to pay your expenses back.

NO. As per my last post, there was some clarification about this - if you have done multiple locations, then the last gig no longer automatically becomes a permanent place of work (subject to the 24 month rule etc).

A few years ago it did, but no longer.

[northernladuk]

NO. As per my last post, there was some clarification about this - if you have done multiple locations, then the last gig no longer automatically becomes a permanent place of work (subject to the 24 month rule etc).

A few years ago it did, but no longer.

Wow, am confused now...

So this is irrelevant now?

“As soon as a contractor knows that the assignment will be their last, the umbrella company is correct to prevent contractors from claiming expenses,” explains Crossland. “The rules say that the workplace – the client’s offices in this case – become permanent when the assignment is expected to last for the rest of the period of employment.”

[TheFaQQer]

[QUOTE=northernladuk;1956713]Wow, am confused now...

So this is irrelevant now?

Yes. That was posted Tuesday, May 18, 2010.

There has been a clarification since then. There was a thread about it not so long ago, and I said the same thing, but Lisa corrected me and pointed to the relevant update.

[TheFaQQer]

[QUOTE=northernladuk;1956713]Wow, am confused now...

So this is irrelevant now?

Because I'm so nice to you, here's the posts where Lisa explained it, I questioned it, and she confirmed it:

Unless it's your final engagement, because that workplace can no longer be considered temporary any more.

Not exactly - if a worker has a series of temporary (i.e. of a limited duration) assignments which are not linked through an over-arching employment contract then each one would be considered a permanent workplace for tax purposes. A final workplace which represents a second or third etc assignment remains a temporary workplace provided that the worker is engaged under a genuine over-arching contract. This is a complicated area and my compliance manager here (who is ex HMRC) has had clarification from HMRC on this very point (they don't make life easy you know )

I guess it's changed since last year?

We've had clarification from HMRC since last year

[northernladuk]

Because I'm so nice to you, here's the posts where Lisa explained it, I questioned it, and she confirmed it:

Ohhh... That's interesting. Thanks for that.

I don't know why it's such a drag for you to be helpful to me. I give you enough grammar crumbs to keep you entertained.