Reply to: No idea where to start....

[Mordac]

You assumed prior knowledge in the post. For a new poster that was neither valid or fair.

OK, I may have been a bit harsh, but far too many people are entering a world they think they know but don't. Complaining afterwards is of no use. The rules apply equally, irrespective of lack of prior knowledge of them.

[eek]

Uncalled for, how? I don't make the rules, and people need to learn the facts of life no matter how unpalatable they may be.

You assumed prior knowledge in the post. For a new poster that was neither valid or fair.

[Mordac]

Uncalled for. This is a new poster with 3 posts trying to work out why her son doesn't have the money she thought he should have.

Uncalled for, how? I don't make the rules, and people need to learn the facts of life no matter how unpalatable they may be.

[Wilmslow]

Uncalled for. This is a new poster with 3 posts trying to work out why her son doesn't have the money she thought he should have.

Plus one.

[eek]

You really haven't been paying attention, have you. The umbrella aspect is completely irrelevant. The rules regarding travel expenses apply universally, which is why our rates will be adjusted upwards to meet the true cost of being in business.

Uncalled for. This is a new poster with 3 posts trying to work out why her son doesn't have the money she thought he should have.

[Mordac]

He would start his week on Monday morning at the Management Consultancy office in London, then travel together with colleagues to Newcastle, stay there in a hotel until Friday morning and then work Friday morning at HMRC before travelling back to London office on a Friday afternoon.

Effectively he has been double taxed - He has had to pay his travel and hotel accomodation at the request of the consultancy company and then reclaim them back through Liberty Bishop. He has used his own money which he earned from another job and was taxed on when he was paid it - and now he's been taxed again on the same money just for carrying out work related duties!

My husband claims similar expenses through his job (consultancy company but employed rather than contracted) and has never been taxed on them. I've claimed back expenses in my own job and never been taxed on them. So why would he through an Umbrella company?

Completely unfair! Why would anyone want to work as a contractor under an umbrella company?!

You really haven't been paying attention, have you. The umbrella aspect is completely irrelevant. The rules regarding travel expenses apply universally, which is why our rates will be adjusted upwards to meet the true cost of being in business.

[scsrowe]

He would start his week on Monday morning at the Management Consultancy office in London, then travel together with colleagues to Newcastle, stay there in a hotel until Friday morning and then work Friday morning at HMRC before travelling back to London office on a Friday afternoon.

Effectively he has been double taxed - He has had to pay his travel and hotel accomodation at the request of the consultancy company and then reclaim them back through Liberty Bishop. He has used his own money which he earned from another job and was taxed on when he was paid it - and now he's been taxed again on the same money just for carrying out work related duties!

My husband claims similar expenses through his job (consultancy company but employed rather than contracted) and has never been taxed on them. I've claimed back expenses in my own job and never been taxed on them. So why would he through an Umbrella company?

Completely unfair! Why would anyone want to work as a contractor under an umbrella company?!

[VectraMan]

Yes, paid to travel from the company offices in London to Newcastle - ironically to work within HMRC! He had to stay in a hotel there, and they gave him an allowance to use for food. He also used data on his phone to be able to work on the train.

One question is did he ever work in London? It sounds like he was hired by a company in London to work in Newcastle, in which case Newcastle would be his permanent place of work and expenses aren't allowed. If he worked normally in London and took the occasional trip to Newcastle then they would be.

[teapot418]

Short answer: you can't.

Home to office expenses are not allowable.

Travel in the course of work, e.g. from one office to another, are, but will have to be reclaimed via SA.

[Mordac]

Yes, paid to travel from the company offices in London to Newcastle - ironically to work within HMRC! He had to stay in a hotel there, and they gave him an allowance to use for food. He also used data on his phone to be able to work on the train.

Because they have taxed him on this, he's effectively paid tax twice! How do we reclaim the tax he's paid on the expenses?

Short answer: you can't.

[eek]

Yes, paid to travel from the company offices in London to Newcastle - ironically to work within HMRC! He had to stay in a hotel there, and they gave him an allowance to use for food. He also used data on his phone to be able to work on the train.

Because they have taxed him on this, he's effectively paid tax twice! How do we reclaim the tax he's paid on the expenses?

I think your only option is to reclaim the tax paid when he can on his self assessment form. I've sent a link to Lucy at contractor umbrella so hopefully she will appear tomorrow to give you a better answer.

[scsrowe]

They've paid him expenses that should have been tax free (its from the company's office to the end clients office) but probably because it wasn't made clear its been marked as income to be taxed rather than paid gross.

Yes, paid to travel from the company offices in London to Newcastle - ironically to work within HMRC! He had to stay in a hotel there, and they gave him an allowance to use for food. He also used data on his phone to be able to work on the train.

Because they have taxed him on this, he's effectively paid tax twice! How do we reclaim the tax he's paid on the expenses?

[northernladuk]

This is really not clear at all - the first paragraph says if you use a brolly and are caught by IR35 then you cannot claim, where as if not caught you can claim.

But the second paragraph seems to contradict this saying all Umbrella workers cannot claim expenses - which would then very quickly negate any benefit of using a brolly?

Or not?



"Effective from April 2016: Workers employed through intermediaries such as umbrella companies or limited company directors who are working inside IR35, can no longer claim for travel and subsistence costs as expenses and incur tax relief on these costs. However, these new rules will only apply to workers who are under the direct control, supervision and direction of their end-client, or are essentially working inside IR35. For more information on IR35 read our plain English guide to IR35.

Umbrella company contractors
The changes outlined in the 2015 budget will restrict the ability of umbrella company contractors to claim tax relief on travel and subsistence expenses. Previously umbrella company contractors were able to claim a limited number of expenses such as travel and equipment costs. However, under these new rules umbrella company contractors will find that their ability to claim travel and subsistence costs as tax deductible expenses is reduced. If you would like to find out more about working through an umbrella company then you may find our guide to umbrella company services page useful."

OK I only spotted the one paragraph and might have quoted the wrong one. The April 2016 one is obviously the new rules which means inside IR35 and brollies can't claim expenses and yes was a bit of disaster for Umbrellas

I'll delete the quote to avoid confusion

[eek]

Sounds to me that the client is paying him expenses on top of the agreed rate, but because of the changes to the rules they're treated as income and taxed. And that's what the OP is complaining about.

They've paid him expenses that should have been tax free (its from the company's office to the end clients office so that's perfectly acceptable employee expenses) but probably because it wasn't made clear on the claim its been marked as income to be taxed rather than an allowable expense that should have been paid gross.

To Original PM
If he was claiming from home to the company's office than that would be excluded by paragraph 2 (you used to be able to do the above from the 2nd end client onwards until the T&S changes in April assuming you had more than 1 end client whilst working for the same umbrella)

[original PM]

This is really not clear at all - the first paragraph says if you use a brolly and are caught by IR35 then you cannot claim, where as if not caught you can claim.

But the second paragraph seems to contradict this saying all Umbrella workers cannot claim expenses - which would then very quickly negate any benefit of using a brolly?

Or not?



"Effective from April 2016: Workers employed through intermediaries such as umbrella companies or limited company directors who are working inside IR35, can no longer claim for travel and subsistence costs as expenses and incur tax relief on these costs. However, these new rules will only apply to workers who are under the direct control, supervision and direction of their end-client, or are essentially working inside IR35. For more information on IR35 read our plain English guide to IR35.

Umbrella company contractors
The changes outlined in the 2015 budget will restrict the ability of umbrella company contractors to claim tax relief on travel and subsistence expenses. Previously umbrella company contractors were able to claim a limited number of expenses such as travel and equipment costs. However, under these new rules umbrella company contractors will find that their ability to claim travel and subsistence costs as tax deductible expenses is reduced. If you would like to find out more about working through an umbrella company then you may find our guide to umbrella company services page useful."