Clarification on subsistance expenses

[Peoplesoft bloke]

Hi,

I have searched the forum and cannot find a definitive answer so, here goes.

IT Contractor, working at clients site which is specified in the contract. Been at site less than 2 years, and contract does not take me over 2 years.

Parasol say that I am able to claim subsistance expenses, without receipts

£5 per day where I am out of house > 5 hrs
£15 per day where I am out of house > 10hrs (including travelling)

Is this correct?

Thanks

Only MPs get tax free benefits with no receipts required.

[TheFaQQer]

I would have thought it would be up to the umbrella if they wanted to allow their 'employees ' subsistence
If I was to be sent out to a 'temporary' place of work , I would expect to be paid for my subsistence and I guess the only prerequisite would be that I produce a receipt

It is up to the employer what the employee can claim.

It is up to HMRC to determine whether there is a benefit in kind that incurs tax.

So, to clarify - claiming £5 or £15 a day from your employer is OK within their expenses policy. However, if you do not incur the expense, then this is a benefit in kind that needs to be declared on a P11D and tax paid on it.

[sidknows]

I would have thought it would be up to the umbrella if they wanted to allow their 'employees ' subsistence
If I was to be sent out to a 'temporary' place of work , I would expect to be paid for my subsistence and I guess the only prerequisite would be that I produce a receipt

[xoggoth]

There is the PIE, a general concession for unreceipted expenses up to £5. In theory anyone can apply for a dispensation which means they do not have to specifically report valid expense payments below an agreed figure and £15 must be a pretty safe figure in that it is hardly likely that anyone away from home has valid expenses less than that unless they are living in a tent and subsisting on cockroaches. Always safest to keep any receipts just in case.

[SueEllen]

There was a section in this year's budget about how HMRC will be targetting umbrellas that are encouraging their employees to claim things that they aren't allowed to.

Squeaky bum time at a few umbrellas, I should imagine.

http://www.accountancyage.com/accoun...rnment-targets

Tens of thousands of contractors could be hit for tax on travel expenses after the government announced it was looking at the relief available to workers operating in umbrella companies.

[TheFaQQer]

There was a section in this year's budget about how HMRC will be targetting umbrellas that are encouraging their employees to claim things that they aren't allowed to.

Squeaky bum time at a few umbrellas, I should imagine.

[Cheshire Cat]

plus your umbrella will tell you they've got a "special dispensation" with HMRC.
When they do this, have a moment to sit down, relax, have a cup of tea if necessary, and ask yourself, from what you know of taxation and the people who enforce it, if it really sounds feasible that HMRC are such good buddies with your umbrella that they will write-off potentially HUGE amounts of unpaid tax for unreceipted expenses on the say-so of your umbrella?

As nice as that would be for you, what do you REALLY think the answer is?

[dx4100]

Hi,
Parasol say that I am able to claim subsistance expenses, without receipts

Not true.....

You have to keep the receipts for anything you claim. Parasol dont always have to see them but you have to keep them incase you are investigated....thats my understanding anyway.

[TheFaQQer]

No - there is nothing that allows you to claim based on the number of hours you are out of your house, without it being classed as a BIK.

Simple questions to ask your umbrella:

1) So, I can claim this, even if I don't incur the cost?

2) And you'll indemnify me against the cost and penalty from any HMRC investigation into my expenses?

Typical answers: "yes" and "um.....er..........ah........I'll have to check...............no"

[helen7]

Hi,

I have searched the forum and cannot find a definitive answer so, here goes.

IT Contractor, working at clients site which is specified in the contract. Been at site less than 2 years, and contract does not take me over 2 years.

Parasol say that I am able to claim subsistance expenses, without receipts

£5 per day where I am out of house > 5 hrs
£15 per day where I am out of house > 10hrs (including travelling)

Is this correct?

Thanks