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expenses and umbrella Co's

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    expenses and umbrella Co's

    I am just considering shutting down my Ltd Co and going the umbrella route and wondered what the best option expense wise was ? The previous umbrella I used was OK but didnt seem to have as many IR agreed expenses as some of the others I have investigated.

    The one I'm interested in is an agreed per diem overnight rate to cover staying in hotels, I have heard of some quite generous ones that can bump up your expenses significantly.

    #2
    if you had a Ltd company, I would assume that your contract was IR35 not caught. If thats the case then stay Ltd Company, and go dividend route.

    If your contract is IR35 caught...then only explore the best umbrella.

    Comment


      #3
      Look -it's really not difficult....

      Ignore what the Umbrella(s) tell you - their 'dispensation' covers their accounting practices, not what you can claim from them or the end client. They may have their own policy on allowable unreceipted expenses, but that will be for trivia like lunch and bus fares, not hotels.

      What you can claim is money you have spent - if you stay in a hotel overnight and they give you a bill the next morning, that's what you claim (you might like to delete the porn movies and booze, but that's up to you).

      If you claim more than you have spent, that's illegal.

      If you can't produce VAT receipts to support your claims when asked, that's illegal.

      Legitimate business expenses (apart from training, grrr...) are still claimable whether you're inside IR35 or not.

      Clear?

      Comment


        #4
        Receipts

        Strictly you do not need receipts - and they certainly don't need to be VAT receipts.

        However, what you do need to be able to do is prove the expenditure - and the receipt is a common way of doing that.

        Some of the umbrellas are seemingly guilty of misinformation.

        As you say, the basic rule is "if you ain't spent it you can't claim it"

        Comment


          #5
          I closed down my limited company- too much hassle - and went with an umbrella. I use Parasol IT and they allow Accommodation and breakfast costs up to £95 per night for London and £75 Elsewhere. Receipts are required. You can also claim up to £45 per night for accommodation without submitting receipts but you may be asked to provide these receipts to substantiate your claim.

          Comment


            #6
            That's the magic phrase:

            "..up to.."

            Certain of the umbrella fraternity seem to imply that you can claim the high value without having spent the money. Of course, we all know that's illegal and only a complete fool would believe that was what they meant... Oh, I see..

            Comment


              #7
              Reisclosure

              Certain of the umbrella fraternity seem to imply that you can claim the high value without having spent the money
              The "professionals" that allow this to happen are just as guilty of tax evasion as their clients.

              Ever since the money laundering regulations came into force for qualified accountants this year it is now their duty to report to the national criminal intelligence service those clients who they suspect are claiming more than they are spending. "Suspicion" is defined as what a reasonable person would take to go to the police. There doesn't have to be physical evidence of a crime being committed.

              Comment


                #8
                OK then...

                >>>The above Net Monthly Salary is how much you could potentially net as a Penury3 employee.*Based on an employee utilising Penury3's Inland Revenue approved expense policy. <<<

                There are a lot of other similar references on the website and the clear inference (if not the actual reality - note the use of the word "potentially") is that Penury3 has a way of cheating the expenses rules. Which they haven't, of course, but we're back to fools seeing what they want to see again.

                Comment


                  #9
                  Re: OK then...

                  I find the mentality of people who use umbrella companies amazing. They hand over all their money to another company, and then submit themselves to that company’s rules about what they do with the money.

                  It’s your money!

                  The only rules you have to comply with are those set by law and the Inland Revenue. If you want to claim £100 a night for a hotel room, then go ahead.

                  Must be the permie mentality.

                  Comment


                    #10
                    Re: OK then...

                    The reason thousands of us use umbrellas is to get rid of the administrative burden when using accountants and allows us to concentrate on doing our job.
                    I use an umbrella because I can fax a timesheet to the agency on the monday and the money is in my bank account the following monday.

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