Inside IR35 and Expenses - Can you still claim?

[TheFaQQer]

Isn't that the law rather than a company policy and should apply across the board?

Yes

[psychocandy]

OK as far as we are concerned, NO non-chargeable expenses are allowable at source via an umbrella company (these are the ones that may have been previously allowable for tax relief purposes), if the contractor is not under SDC then they "may" be able to claim them via self-assessment at the end of the financial year. Basically, in the ITEPA, there is a section which prohibits companies from processing these via salary sacrifice.

As for chargeable expenses (these can be processed via the umbrella and are the ones that the client is agreeing to reimburse you for), you have to look at a few things; imagine you are a permanent employee of the business and you are sent out to a meeting and drive, then you would be reimbursed the expenses for travelling to that meeting and as such, they are reimbursed in full to you. If the client is agreeing to reimburse home to work travel (something that a permanent employee wouldn't get), then this will be taxed as it is seen as a benefit.

So in a nutshell - expenses for tax relief purposes = speak with HMRC and ask them to declare if you are under SDC; if they say you are not then these need to be claimed via SA.

As for an inside IR35 contractor, our HMRC contact has stated that it is highly unlikely that they will pass the SDC test, hence our suggestion to get confirmation direct from HMRC, especially if the expenses are an important part of the decision on whether to take the contract or not!

HTH

Cheers Lucy - thanks for that.

Just wish I could use you're company as umbrella. IT seems to be a bit "random" with others...

[northernladuk]

Cheers Lucy - thanks for that.

Just wish I could use you're company as umbrella. IT seems to be a bit "random" with others...

It would make coming on here and moaning about it a bit of a problem though wouldn't it?

[lucyclarityumbrella]

Isn't that the law rather than a company policy and should apply across the board?

Same thing with CU