Reply to: So Many questions..

[cojak]

Good grief, why do we bother?

I've rang JSa on friday and they said to claim my £40 per day away from home allowance and £25 per day for food I do not need to provide them with reciepts as they have an agreement with the inland revenue.

JSA has the agreement with the IR, not you - they're telling you that to get the contract.

Do a bit more research than just coming here asking dumb ass questions and ignoring the answers you don't like.

Take a look at the IR website explainingWhat Records Should I Keep?

"Until recently there was no legal requirement to keep records for income tax, although Customs & Excise require registered traders to keep records for VAT. However, we have always advised businesses that it was in their own interests to keep all the records needed to help prepare accounts and tax returns. Rules introduced in the 1994 Finance Act mean that you now need to keep all appropriate records.

We will normally expect you to:

* record all sales and other business receipts as they come in, and retain the record
* keep back-up records, for example, invoices, bank statements and paying-in slips to show where the income came from
* record all purchases and other expenses as they arise, and ensure - unless the amounts are very small - that you have, and retain, invoices for them
* keep a record of all purchases and sales of assets used in your business
* record all amounts taken out of the business bank account, or in cash, for you or your family's personal use
* record all amounts paid into the business from personal funds, for example, the proceeds of a life assurance policy.

You will have to retain your records for five years from the latest date by which your tax return is to be filed.

More information on keeping records can be found in SA/BK4 - A general guide to keeping records."

Then take a look at what the IR means by dispensations - have you filled out, signed and sent off the form? No, you haven't. This means you don't have the 'agreement' with the IR.

If you went LTD your accountant would sort this stuff out for you. JSA won't (and no, you can't claim for courses if you use a brolly...)

Making a decision based on the fact that you're too idle to keep a few receipts tucked away doesn't make good business sense.

[Cowboy Bob]

God

no idea which way to turn now!

I've rang JSa on friday and they said to claim my £40 per day away from home allowance and £25 per day for food I do not need to provide them with reciepts as they have an agreement with the inland revenue.

Not sure wether this would be true or not?

Can anyone with JSA advise me please.

thanks

It is true that you do not have to provide JSA with receipts as they have an agreement with the Inland Revenue that they don't have to see them - it saves on their paperwork. But you do have to have the receipts if the tax man does an audit.

Think about it like this, do you think that the Inland Revenue is going to allow you to claim £65 a day that you haven't spent? Of course not. If you have no receipts they will assume that you are committing fraud (ie, it's up to you to prove otherwise) and you will be in trouble.

Ring up JSA and ask them directly if you do not need to to keep any receipts for any expenses that you claim. Then ask for it in writing. I guarantee you that you will get the truth out of them then.

At the end of the day it's simple, if you haven't spent it, you can't claim it.

[PhilD]

still not sure..

God

no idea which way to turn now!

I've rang JSa on friday and they said to claim my £40 per day away from home allowance and £25 per day for food I do not need to provide them with reciepts as they have an agreement with the inland revenue.

Not sure wether this would be true or not?

Can anyone with JSA advise me please.

thanks

[cojak]

JSA gave me 74% return with no reciepts so I went with them in the end, Parasoul offered more but I had to provide reciepts all the time..

Don't come here crying if They catch you...


PS: Fleety tribute

receipt.

[Cowboy Bob]

I ran up giant and they offered me me the dividen option but as the contract doesn't allow that I had to go via the umbrella route which worked out £742 per week. Which is slightly more that what i take home now as a permie.!!

JSA gave me 74% return with no reciepts so I went with them in the end, Parasoul offered more but I had to provide reciepts all the time..

As it's a 3 month to find out the lay of the land, etc I went with JSA.

It's getting my head round what I can claim for now!! though very impressed to hear I can claim cost of courses back!!

Oh dear... I'll address the points one at a time.

1) Good job you went for brolly option and not dividend, since MSCs are being clamped down upon by the chancellor in April - you should have known this first, seems like you were lucky.

2) You do have to have receipts to show the tax man. All JSAs dispensation means is that you don't have to show them the receipts. You need all receipts for everything that you claim for. If you don't and the revenue investigate they can charge you with fraud - a criminal offence.

3) As an employee of the umbrella I doubt you can claim for courses. If you ran your own Ltd, yes you could. Even if you can legitimately claim now, you certainly won't be able to after April.

4) Ltd is the only way to go - especially with the new legislation coming in in April.

[PhilD]

taken the plunge!

I ran up giant and they offered me me the dividen option but as the contract doesn't allow that I had to go via the umbrella route which worked out £742 per week. Which is slightly more that what i take home now as a permie.!!

JSA gave me 74% return with no reciepts so I went with them in the end, Parasoul offered more but I had to provide reciepts all the time..

As it's a 3 month to find out the lay of the land, etc I went with JSA.

It's getting my head round what I can claim for now!! though very impressed to hear I can claim cost of courses back!!

[Cowboy Bob]

ok lets actually look at the figures then

lets say PAYE rate with agency is £20 -
the agency will chasrge the end client £20 per hour they will then add on Employers NI at 12.8% - this brings the vlaue up to £22.56 then add a bit of holiday pay on at 8.33% = £24.44

So the agency may say if you are PAYE then the rate is £20 but if you go ltd or brolly (no difference in the agencies eyes they are simply paying an invoice for services as opposed to an employee) they say the rate is £24.44 becuase they no longer need to cover the employer costs (employers Ni and Holiday Pay)

However you do not pay employers NI on the first £97 per week of your salary - so you save a bit of cash there - then after you have earned £600 ish per week the employers NI drops to 1% so you maybe make a bit more on that one.

obviously some agencies make no distinction between PAYE or Brolly and pocket the extra employer costs thus increasing their margin -

shocking bunch of Cowboys eh Bob!

I don't understand what you're getting at. You're going to get the same amount of money in the bank at the end of the day whether you're PAYE or brolly - except you have the brollies fees to take out.

The only difference between the two is that with PAYE the agency pays the employer's contributions so it seems at first glance like your hourly rate is lower as they will factor that into their rate calculations. With a brolly, you'll see the full gross without the employer's contributions removed come in so it will look like your hourly rate is higher. However, the same contributions will be due on both, and you'll end up with exactly the same amount net in your bank account at the end of the day.

If the agency is charging employer's NI incorrectly then that is a problem with the agency itself, not the fact that PAYE is a less lucrative way to get paid.

[jh0711]

ok lets actually look at the figures then

lets say PAYE rate with agency is £20 -
the agency will chasrge the end client £20 per hour they will then add on Employers NI at 12.8% - this brings the vlaue up to £22.56 then add a bit of holiday pay on at 8.33% = £24.44

So the agency may say if you are PAYE then the rate is £20 but if you go ltd or brolly (no difference in the agencies eyes they are simply paying an invoice for services as opposed to an employee) they say the rate is £24.44 becuase they no longer need to cover the employer costs (employers Ni and Holiday Pay)

However you do not pay employers NI on the first £97 per week of your salary - so you save a bit of cash there - then after you have earned £600 ish per week the employers NI drops to 1% so you maybe make a bit more on that one.

obviously some agencies make no distinction between PAYE or Brolly and pocket the extra employer costs thus increasing their margin -

shocking bunch of Cowboys eh Bob!

[Cowboy Bob]

re employers NI - becauase agencies just view it as a set amount on top of your rate of pay it does not take into account that actually some of your salary is employers NI free (and also after £600 quid ish the employers NI rate drops to 1%)

OK, I'll give you that maybe, possibly, you might still be able to claim expenses after April - but what you've just written there is utter rubbish. There is no difference in employer's NI contributions between brolly, PAYE or even Ltd.

So effectively what you're saying is that if the wind blows correctly and after April you can still claim expenses, that by joining the PCG QU scheme you can pay £80 per month for the privilege of being able to claim expenses. Sounds like a good deal to me

[Ardesco]

No different to what you can claim through your own LTD Co. There is not reason to go brolly if you are expecting to be a long term contractor. Brolly is only a viable option if you are filling a couple of months between permie work.

[ASB]

and also after £600 quid ish the employers NI rate drops to 1%

???

Employees pay 1% above the UEL.

Employers still pay 12.8%.

http://www.hmrc.gov.uk/rates/nic.htm

[jh0711]

from April you will be able to claim expenses through a brolly - trust me on this.

not going to give specifics but it is to do with the way the relationship between the brolly, contractor and agency is described........

re employers NI - becauase agencies just view it as a set amount on top of your rate of pay it does not take into account that actually some of your salary is employers NI free (and also after £600 quid ish the employers NI rate drops to 1%) so you do make out a little bit better being with a brolly but admittedly the difference is minimal.

[Cowboy Bob]

PAYE direct with the agency is a bad idea - normally the rate of pay drops (cos the agency have to cover the employers NI and Holiday pay costs) and you cannot claim any expenses

with a brolly you do end up covering your own employers NI but you can reduce that with the expenses.

spose the PCG (QU) weekly is a bit ott but the monthly charge is very competitive - £79.95 per month including free chaps and PCG membership.

Firstly, PCG membership is unnecessary if going PAYE as there are no IR35 issues. Secondly, as from April you will no longer be able to claim any expenses via a brolly anyway. Thirdly, employer's NI liability is the same for both options. So that's £80 per month down the drain for no good reason.

[jh0711]

PAYE direct with the agency is a bad idea - normally the rate of pay drops (cos the agency have to cover the employers NI and Holiday pay costs) and you cannot claim any expenses

with a brolly you do end up covering your own employers NI but you can reduce that with the expenses.

spose the PCG (QU) weekly is a bit ott but the monthly charge is very competitive - £79.95 per month including free chaps and PCG membership.

[Cowboy Bob]

try the PCG Qu product for total piece of mind

Parasol are ok - Giant will try and sell your their composite option which will probably be illiegal in April at which point they will dump you on to their brolly or try to push you to limited.

use a brolly for first 12-18 months if after that you are going to continue contracting look at a ltd option.

The PCG QU product is totally overpriced for what it is. If you want the brolly option without going limited you may as well go PAYE direct from the agency, there's no point in paying for something that has no value.