Reply to: Contracting and umbrella rubbish

[ASB]

If I cannot genuinely get a receipt like some canteens based at work offices don't do genuine VAT receipts or anything close, vending machines also obviously cannot so how would you legitamtely claim this and be able to prove it to the IR?

My intention is to not claim for it and take me own lunch from home saving me lots of money :-) but there will be occasions no doubt where I have to grab something at work or similar, how can I prove I spent it without paper receipts?

As THEPUMA says just claim it anyway. If you pay cash it's difficult. But a note in a diary or similar will be a great help. If you pay by credit card the voucher will help. If there is a card based system note the purchase of cards.

Receipts are just one form of evidence which will keep HMCR happy, they will be satsified with any reasonable audit trail. If there is anything they are not satisifed with you just get involved in a bit of horse trading.

Regarding the canteen I am surprised the till doesn't spit out a receipt of some description - even if you have to ask them. I would assume they are making taxable supplies. They are therefore obliged to give any VAT registered person an invoice who requests one.

If they actually refuse dob em in to HMRC (althouigh getting the canteen closed down might not make you entirely popular).

[THEPUMA]

If I cannot genuinely get a receipt like some canteens based at work offices don't do genuine VAT receipts or anything close, vending machines also obviously cannot so how would you legitamtely claim this and be able to prove it to the IR?

My intention is to not claim for it and take me own lunch from home saving me lots of money :-) but there will be occasions no doubt where I have to grab something at work or similar, how can I prove I spent it without paper receipts?

If you genuinely cannot get a receipt, claim it anyway. There is nothing in the legislation that says you have to have a receipt. Of course, it is very convenient when challenged to have a receipt but if you have incurred it, receipt or not, I would claim it.

[Spiderman]

Alternatively, without wishing to be rude, you could get a greater understanding of how case law and precedence works. That case has still not been superceeded in a higher court. It stands.

Edit: There are many reasons why that case may not be relevant, but it's age isn't one of them.



They can state the moon is made of green cheese for all I care. It doesn't make it true. It is possible that "your office" is a temporary workplace but it is by no means certain and will tende to depend on individual circumstances. It is also possible to have more than one permanent workplace simultaneously.



It is unlikely that HMRC will change their entire structure and meaning of dispensations. They really are VERY simple. The simply mean an employer does not need to see receipt for claims within certain limits and that they do not need to report them to HMRC. They also mean that they do not need to be declared on the individual tax return.



They do say that very clearly.



They did not in fact say you could do that. That was your inference. Granted they used a careful choice of words.

Some people would read it a different way. After all "where you are unable to obtain a receipt ...... Up to" does rather imply you have actually spent something.

Don't let not being able to get a receipt worry you about genuine expenditure. Use a credit, make a note in the diary anything like that. If you get investigated HMRC will accept them - provided they believe you.

If I cannot genuinely get a receipt like some canteens based at work offices don't do genuine VAT receipts or anything close, vending machines also obviously cannot so how would you legitamtely claim this and be able to prove it to the IR?

My intention is to not claim for it and take me own lunch from home saving me lots of money :-) but there will be occasions no doubt where I have to grab something at work or similar, how can I prove I spent it without paper receipts?

[ASB]

My understanding is that that case related to a self-employed and taxpayer and is therefore not binding precedent in respect of employees, which would affect the majority of the readers of this forum.

I am not an expert in precedent etc so please don't bite my head off but that is what David Smith from Accountax said when he advised me that he thought that such a subsistence claim was allowable.

Sorry, the point I was making about precedent to spiderman was simply that it deosn't become less valid just because it is 30 odd years old.

I originally posted the link up in response to, I think, bigbird simply because it was a case about lunches. Whether it would impact in this situation (or could be cited) I don't know. As I said elsewhere I have personally got my own lunch claims through an investigation so it is not an absolute no-no.

[THEPUMA]

Alternatively, without wishing to be rude, you could get a greater understanding of how case law and precedence works. That case has still not been superceeded in a higher court. It stands.

My understanding is that that case related to a self-employed and taxpayer and is therefore not binding precedent in respect of employees, which would affect the majority of the readers of this forum.

I am not an expert in precedent etc so please don't bite my head off but that is what David Smith from Accountax said when he advised me that he thought that such a subsistence claim was allowable.

[LisaContractorUmbrella]

We have taken on several new clients recently who have used some Umbrella's (not yours Lisa!) who were not even aware of there expenses as they were "automatically" claimed by the brolly.

With practices like that, it is no wonder they could encounter problems.

Just to make things clear, my view is that these round sum claims would not be claimable.

Alan

We have heard the same thing Alan - completely irresponsible IMHO

[Nixon Williams]

We have taken on several new clients recently who have used some Umbrella's (not yours Lisa!) who were not even aware of their expenses as they were "automatically" claimed by the brolly.

With practices like that, it is no wonder they could encounter problems.

Just to make things clear, my view is that these round sum claims would not be claimable.

Alan

[LisaContractorUmbrella]

the IR don't give you £26 per day, you claim £26 per day which then gets back to you without going through the usual course of taxation for a Ltd thats about 20% and for an umbrella about 40%, so the net gain is about £5-10 depending on which you are.

Hence the inverted comma's but you are right - assuming that the £26 per day has actually been spent of course

[ASB]

and what if they don't ?

Same as any other spurious claims. Tax, penalties, interest etc.

To be fair, if you have good records it shouldn't be a real problem. If you've just been making up random claoims it will be a bit more tricky.

[Bluebird]

If you get investigated HMRC will accept them - provided they believe you.

and what if they don't ?

[Bluebird]

"Most umbrellas states that because you are employed by them and your normal place of work with them is set as home, your office is a temporary workplace therefore you are entitled to subsistence."

You are right - most of them do state that but I think you may have a hard job proving it if the IR turned up. At the end of the day I think most contractors realise that the IR are highly unlikely to 'give' you £26 per day just for going to work but some are happy to take the risk that they won't be caught and some are not.

the IR don't give you £26 per day, you claim £26 per day which then gets back to you without going through the usual course of taxation for a Ltd thats about 20% and for an umbrella about 40%, so the net gain is about £5-10 depending on which you are.

[ASB]

Thats all very well but those cases date way back, there is nothing more recent not saying its any less valid but I'd like to see something from 2000 onwards.

Alternatively, without wishing to be rude, you could get a greater understanding of how case law and precedence works. That case has still not been superceeded in a higher court. It stands.

Edit: There are many reasons why that case may not be relevant, but it's age isn't one of them.

Most umbrellas states that because you are employed by them and your normal place of work with them is set as home, your office is a temporary workplace therefore you are entitled to subsistence.

They can state the moon is made of green cheese for all I care. It doesn't make it true. It is possible that "your office" is a temporary workplace but it is by no means certain and will tende to depend on individual circumstances. It is also possible to have more than one permanent workplace simultaneously.

I said bugger interpretations and get the IR to firm it up properly and have the IR dispensation letters given to these cowboys state that in order to claim daily subsistence the contractor cannot be constantly at one office for their daily work they must be n the road most of the day or travelling between sites.

It is unlikely that HMRC will change their entire structure and meaning of dispensations. They really are VERY simple. The simply mean an employer does not need to see receipt for claims within certain limits and that they do not need to report them to HMRC. They also mean that they do not need to be declared on the individual tax return.

Also get them to state that the individuals must keep receipts to back up all claims

They do say that very clearly.

Working through Danbro for a year claiming the way they state I could take home £2500 more a year spending the actual money (receipted) only for 3 weeks!

They did not in fact say you could do that. That was your inference. Granted they used a careful choice of words.

Some people would read it a different way. After all "where you are unable to obtain a receipt ...... Up to" does rather imply you have actually spent something.

Don't let not being able to get a receipt worry you about genuine expenditure. Use a credit, make a note in the diary anything like that. If you get investigated HMRC will accept them - provided they believe you.

[LisaContractorUmbrella]

"Most umbrellas states that because you are employed by them and your normal place of work with them is set as home, your office is a temporary workplace therefore you are entitled to subsistence."

You are right - most of them do state that but I think you may have a hard job proving it if the IR turned up. At the end of the day I think most contractors realise that the IR are highly unlikely to 'give' you £26 per day just for going to work but some are happy to take the risk that they won't be caught and some are not.

[Spiderman]

This one do you?

http://www.hmrc.gov.uk/manuals/bimmanual/BIM37660.htm

Thats all very well but those cases date way back, there is nothing more recent not saying its any less valid but I'd like to see something from 2000 onwards.

As for Lisa's comment re claiming subsistence, many many many people use umbrellas and many of them or most of them are in a single office on a daily basis..thousands of those then claim subsistence (lunch) for being away from their normal work place (home). Most umbrellas states that because you are employed by them and your normal place of work with them is set as home, your office is a temporary workplace therefore you are entitled to subsistence.

I said bugger interpretations and get the IR to firm it up properly and have the IR dispensation letters given to these cowboys state that in order to claim daily subsistence the contractor cannot be constantly at one office for their daily work they must be n the road most of the day or travelling between sites. Also get them to state that the individuals must keep receipts to back up all claims, that way rubbishing the advice I've been given of keeping receipts for only 2-3 weeks of the year in case the umbrella do a check up. So that way the IR catch the horse before its bolted, save court cases and chasing people!

They won't and thus half the country files dodgy, spurious claims and because they get away with it more do it!

Working through Danbro for a year claiming the way they state I could take home £2500 more a year spending the actual money (receipted) only for 3 weeks! Meaning a total outlay for me of £400!! ooh £2100 profit! Think how many contractors do that because they think they can, I don't know 10,000 is £2.5m of lost revenue. I think thats worth taking action over isn't it??!!! Makes me SICK!

[Ardesco]

have read a lot of info on this site yet I went to an umbrella called Danbro and on their site and backed up in an email I got this:

Yadda Yadda Yadda

Get it in writing from them that they will indemnify you against the costs of any HMRC investigation into your expenses and that they will pay out any fines/tax owing that result from the investigation.

If they agree to that claim away, otherwise you know that they are telling prokies and know that you are going to get fecked over in an investigation.

HTH