Reply to: Expensing my laptop is benefit in kind...

[northernladuk]

That has been my experience

Which has been the clients choice and nothing to do with your tax position. They also give them to outside contractors and to perms so hardly a bench mark for anything.

[fidot]

How come we are over a two years since all this started and over a month since the legislation came in to force and people still say stuff like this?

That has been my experience

[eek]

Thats is not how it works now - previously you didn't have a benefit in kind hit on your tax bill, thus reducing your personal allowances etc. And I don't agree with the charge of 15% that Parasol take as a cut for processing your business costs

If the client isn't providing hardware then you should be able to offset the full amount - not just 85%

Parasol is doing the best it can to solve a problem for you that frankly isn't theirs to deal with (most umbrellas avoid this area like the plague for there be dragons if even a little bit is screwed up).

So a simple question:-

Is it still cheaper to purchase (i.e. you end up with slightly more money) using this scheme or is it cheaper to buy the laptop out of post tax income?

I suspect it's still the former....

[gizzmo]

What's complex about it

You buy laptop

You send invoice to parasol - they send you 85% of the money before dealing with the Tax calculations.

You pay the rest out of your final payment as you leave parasol

I can't see the complexity there

Thats is not how it works now - previously you didn't have a benefit in kind hit on your tax bill, thus reducing your personal allowances etc. And I don't agree with the charge of 15% that Parasol take as a cut for processing your business costs

If the client isn't providing hardware then you should be able to offset the full amount - not just 85%

[eek]

I am on on inside gig and the client is not providing any laptops anymore - all access is now via your own equipment and VDI (Virtual Display via Citrix). My own laptop is quite old but more than adequate for my personal needs - however really struggling with the client's VDI set up requirements so I am going to have to upgrade for the sake of this job. In this instance its a Business cost directly related to the project. If I wasn't doing this gig I wouldn't have need to upgrade my laptop.
I am also with Parasol - as far as I understand it - the 15% which you previously would have paid at the end of the contract to keep the hardware is the amount that is the benefit in kind. However the 85% they pay you when you submit the receipt for the laptop comes out of your invoice value and is still free of income tax and NI.
It seems all to complicated so I am just not going to bother with claiming and pay for it myself.

What's complex about it

You buy laptop

You send invoice to parasol - they send you 85% of the money before dealing with the Tax calculations.

You pay the rest out of your final payment as you leave parasol

I can't see the complexity there

[gizzmo]

I am on on inside gig and the client is not providing any laptops anymore - all access is now via your own equipment and VDI (Virtual Display via Citrix). My own laptop is quite old but more than adequate for my personal needs - however really struggling with the client's VDI set up requirements so I am going to have to upgrade for the sake of this job. In this instance its a Business cost directly related to the project. If I wasn't doing this gig I wouldn't have need to upgrade my laptop.
I am also with Parasol - as far as I understand it - the 15% which you previously would have paid at the end of the contract to keep the hardware is the amount that is the benefit in kind. However the 85% they pay you when you submit the receipt for the laptop comes out of your invoice value and is still free of income tax and NI.
It seems all to complicated so I am just not going to bother with claiming and pay for it myself.

[cojak]

Yep, my brother was an aerospace engineer - he had Snap-On kit because he said that his employer supplied monkey-metal tools.

[Lance]

It's also not true - I'm aware of whole heaps of mechanics who have their own toolkit either because their employer doesn't provide one or because what their employer provides is the wrong brand...

in the building trade it is expected that the workers provide all their own tools. Even permies...

[eek]

How come we are over a two years since all this started and over a month since the legislation came in to force and people still say stuff like this?

It's also not true - I'm aware of whole heaps of mechanics who have their own toolkit either because their employer doesn't provide one or because what their employer provides is the wrong brand...

[northernladuk]

Surely, for an inside gig, the client provides equipment, so the question is moot.

How come we are over a two years since all this started and over a month since the legislation came in to force and people still say stuff like this?

[BlasterBates]

Anything you need for your job that isn't provided by the employer can be offset against tax.

https://www.gov.uk/tax-relief-for-em...ther-equipment

HMRC doesn't discriminate between employees and the self-employed. The fact is that mostly equipment is provided by the employer, however an inside IR35 contract isn't really an employment contract.

[fidot]

Surely, for an inside gig, the client provides equipment, so the question is moot.

[NotAllThere]

More of simes' posts removed. simes - you posted on this thread solely to make a snarky comment concerning NLUK. Trolling in the professional forum is not permitted. Don't do it again.

[Lance]

Off-topic posts removed.

you missed one https://forums.contractoruk.com/acco...ml#post2874450

[eek]

I was taking the OP and his context in to account where he wanted to expense a laptop where he could outside, he can't inside. My comment was directly related to his question and situation, not to pull apart the entire expenses legislation.

I've altered my original comment to add a little more clarity.

And as you would note from my first reply while the way Parasol was offering hardware / laptops was dubious if you actually looked at the IR35 rules in detail, even today (post April 6th 2021) it is allowable for the cost of project materials to be claimed from pre tax income. And Parasol were (at least up to last week) happy to call a laptop a project expense - to use money from an invoice to purchase it for you and then sell it to you at the end of the project.

the only thing Parasol was doing was pushing the definition of project materials beyond a point other umbrellas (not just clarity) were happy with but that is the nature of a lot of umbrella companies as they have a different viewpoint of what is right and wrong than other people may have given that a number started out when IR35 first appeared.