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Expenses question

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    Expenses question

    Hi peeps!

    I'm very new to contracting and I wondered if anyone could shed some light on expenses for me if I am working away from home. I will be working in London Monday to Friday through an umbrella company, but home for me is Edinburgh. I just don't understand how it will work for me if I claim my accommodation expenses in London Monday to Friday. Does claiming expenses mean you get back every penny? For example if my rent in London comes to £700 a month if I claim that back through my umbrella company will I get the full £700 back? or what percentage of that £700 would I get back?

    Thank you in advance

    #2
    Originally posted by sophia57 View Post
    Hi peeps!

    I'm very new to contracting and I wondered if anyone could shed some light on expenses for me if I am working away from home. I will be working in London Monday to Friday through an umbrella company, but home for me is Edinburgh. I just don't understand how it will work for me if I claim my accommodation expenses in London Monday to Friday. Does claiming expenses mean you get back every penny? For example if my rent in London comes to £700 a month if I claim that back through my umbrella company will I get the full £700 back? or what percentage of that £700 would I get back?

    Thank you in advance
    You'll get 100% of legitimate expense claims. It'll come out of the revenue you are generating from the contract, so your salary would be proportionally lower, however the salary is taxable whereas legitimate expenses are not. You should ask the umbrella co. to explain this to you and anything else that's not clear.

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      #3
      Originally posted by Contreras View Post
      You'll get 100% of legitimate expense claims. It'll come out of the revenue you are generating from the contract, so your salary would be proportionally lower, however the salary is taxable whereas legitimate expenses are not. You should ask the umbrella co. to explain this to you and anything else that's not clear.
      Sorry I don't quite understand. If I make £3000 a month and claim £700 accommodation expenses would I not receive £3700?

      Comment


        #4
        Originally posted by sophia57 View Post
        Sorry I don't quite understand. If I make £3000 a month and claim £700 accommodation expenses would I not receive £3700?
        Are you serious? Me thinks this is a sockie wind-up but I'll answer anyway.

        If the umbrella invoices the client at £3000 per month and then pays you £700 expenses, they have £2300 remaining to pay your salary, tax, national insurance, and deduct their admin fee.

        If an umbrella could magic up £700/mo. from thin air then we'd all be using them!

        Only way this could happen is if the client agrees to pay expenses in addition. I.e. £3000 + £700.
        Last edited by Contreras; 26 June 2014, 01:57.

        Comment


          #5
          Thanks Contreras,

          I suspect that a few newbies may indeed think like this and so putting it in black and white will help any lurkers.
          "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
          - Voltaire/Benjamin Franklin/Anne Frank...

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            #6
            What does your employer say about their expenses policy?
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              #7
              Indeed expenses come from out of your contracted rate or you (with agreement) invoice your client for them. Money does not appear out of thin air as far as I know

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                #8
                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.
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                  #9
                  Originally posted by northernladuk View Post
                  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 tax on your expenses back.
                  FTFY. (again )

                  Comment


                    #10
                    Originally posted by northernladuk View Post
                    Be very careful with Umbrellas though. You won't be able to claim travel, subsistence and accommodation 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 travel, subsistence and accommodation expenses back or declare them as a BIK and pay tax on them.
                    FTFY

                    The same is true of your own limited company.
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