Reply to: Claiming under 3 miles per day

[RichardCranium]

Objection over-ruled True but any decent brolly won't have any more rules or limitations than any other employer and the rules we do have are courtesy of HMR&C

Objection!

As an employee of one's own LtdCo one can claim for attending interviews. You can't through a brolly.

As an employee of one's own LtdCo one can claim for travelling up to a new ClientCo on Sunday and the hotel on the Sunday night, but seemingly not with brollies because the contract has not begun.

As an employee of one's own LtdCo one can claim for attending professional meetings, e.g. BCS, but seemingly not through brollies as it does not directly relate to getting that specific contract done.

Ditto for buying kit, software, training, some travel and some other twiddly bits.

[LisaContractorUmbrella]

I've always had to send in my receipts (computer software, books, meals, hotel, etc) to the brolly irrelevant of who I have used, but are you saying that I haven't needed to do this? I'm not sure that would be the case as how would the brolly know whether my claims were true or not? I mean whats to stop me or any other contractor claiming for expenses that have just been made up if the brolly isn't going to verify the claims if they do not have sight of the receipts? Something doesn't sound right with that or is it because the brollies don't care what I claim for as its my look out what happens with the tax man at the end of the day?

Any expense processed by an employer would normally be recorded on a P11d at the end of the financial year with receipts as evidence of the expenditure. Large employers (including umbrella companies) apply to HMR&C for a dispensation which is a list of expenses that the company do not have to record on a P11d, however, they do still have to verify the claims that are made. The dispensation is simply to save time - recording 12 months expenses for 1000 employees is a lot of form filling!

I don't know how other companies work but we manually check each expense claim before it is processed to ensure (a) the expense is actually allowable (b) the expense is plausible (a claim for a hotel from someone that works 5 miles from home would be questioned) (c) that the employee has not fallen foul of the 24 month rule. We then also conduct random expense checks which means that a selection of employees are asked for their receipts to prove their expense claims; if a claim cannot be verified it wont be processed. Basically, we have to ensure, for our own sake and our employee's sake that we conduct the same sort of checks that HMR&C would undertake in the event of an investigation. Unfortunately, as processed expenses increase take home pay some companies will turn a blind eye or even encourage claiming erroneous expenses as a way to encourage people to use their services. We have said for years - the only difference in take home pay between umbrella companies should be determined only by their fees.

[malvolio]

Objection over-ruled True but any decent brolly won't have any more rules or limitations than any other employer and the rules we do have are courtesy of HMR&C

As are mine...

[LisaContractorUmbrella]

Objection! I'm not dissing anyone, but if you don't like sticking to someone else's rules, you either got to someone whose rules you do like or get to the position where you set your own.

Objection over-ruled True but any decent brolly won't have any more rules or limitations than any other employer and the rules we do have are courtesy of HMR&C

[malvolio]

Or use a decent brolly! Stop dissing Mal

Objection! I'm not dissing anyone, but if you don't like sticking to someone else's rules, you either got to someone whose rules you do like or get to the position where you set your own.

[Craig@Clarity]

I've always had to send in my receipts (computer software, books, meals, hotel, etc) to the brolly irrelevant of who I have used, but are you saying that I haven't needed to do this? I'm not sure that would be the case as how would the brolly know whether my claims were true or not? I mean whats to stop me or any other contractor claiming for expenses that have just been made up if the brolly isn't going to verify the claims if they do not have sight of the receipts? Something doesn't sound right with that or is it because the brollies don't care what I claim for as its my look out what happens with the tax man at the end of the day?

It all depends on the brolly's procedures as to whether you have to send them in or not but a dispensation basically saves them admin by not having to check every single receipt. It's up to the employee to submit a truthful claim for actual expenditure incurred. Your claims could still be looked into by HMRC so regardless of whether there is a dispensation in place or not, you should still retain a receipt. Claiming for an expense that you never actually incurred is fraud.

[bangface]

Absolutely not - a dispensation is issued to save the umbrella company time in their accounting functions, it has nothing to do with what can or can't be claimed as an expense

Tbh it would have been more of a hassle to put in a claim for the little miles anyway, then I'd have to send the fuel receipts in to the brolly (the recorded delivery costs at least £1.20 to make sure the receipts don't get lost in the post etc) all for the benefit of a couple of quid a week!!!

[bangface]

A dispensation just removes the need to send in receipts or report it on the P11D if it is within the agreed rates. Claiming for legitimate business expenses should still be allowable. As everyone else has mentioned, it'll be more to do with the hassle of processing 75p.

I've always had to send in my receipts (computer software, books, meals, hotel, etc) to the brolly irrelevant of who I have used, but are you saying that I haven't needed to do this? I'm not sure that would be the case as how would the brolly know whether my claims were true or not? I mean whats to stop me or any other contractor claiming for expenses that have just been made up if the brolly isn't going to verify the claims if they do not have sight of the receipts? Something doesn't sound right with that or is it because the brollies don't care what I claim for as its my look out what happens with the tax man at the end of the day?

[LisaContractorUmbrella]

I think it is to do with the rules imposed on them by the dispensation they have agreed with HMRC, so if they have said you cannot claim your travel because you live within a stones throw of the clients site then they are probably correct in a sense...I have had similar experiences with at least 2 brollies in the past that have said I could not claim travel because I lived to close to the client site (admittedly it was only a 2 mile distance and probably took me all of 20 minutes to walk it, but I chose to drive and as it only amounted to a few quid each week I wasn't too bothered!!).

Absolutely not - a dispensation is issued to save the umbrella company time in their accounting functions, it has nothing to do with what can or can't be claimed as an expense

[Craig@Clarity]

I think it is to do with the rules imposed on them by the dispensation they have agreed with HMRC, so if they have said you cannot claim your travel because you live within a stones throw of the clients site then they are probably correct in a sense...

A dispensation just removes the need to send in receipts or report it on the P11D if it is within the agreed rates. Claiming for legitimate business expenses should still be allowable. As everyone else has mentioned, it'll be more to do with the hassle of processing 75p.

[bangface]

I think it is to do with the rules imposed on them by the dispensation they have agreed with HMRC, so if they have said you cannot claim your travel because you live within a stones throw of the clients site then they are probably correct in a sense...I have had similar experiences with at least 2 brollies in the past that have said I could not claim travel because I lived to close to the client site (admittedly it was only a 2 mile distance and probably took me all of 20 minutes to walk it, but I chose to drive and as it only amounted to a few quid each week I wasn't too bothered!!).

[RichardCranium]

it's better in my pocket than the taxman's.

Just make sure it gets included on your self assessment tax return.

[LisaContractorUmbrella]

So the lesson is, if you don't want to be hidebound by silly rules and limitations, be your own boss...

IGMC...

Or use a decent brolly! Stop dissing Mal

[malvolio]

So the lesson is, if you don't want to be hidebound by silly rules and limitations, be your own boss...

IGMC...

[LisaContractorUmbrella]

Do you think it might be because they are working on the basis of 25p x 4 = £1? Maybe they can't/don't want to cope with anything below that level....?

Yes I think you're probably right Clare - maybe they set minimum expense claim thresholds just to reduce their admin and therefore their overheads - I certainly can't think of any other reason