Reply to: Expenses question

[LisaContractorUmbrella]

What about flat rate VAT? Do Umbrellas utilise this?

No, the threshold is about £150k so it would be very unlikely unless the brolly was really tiny

[Sausage Surprise]

No. Absolutely not. Tax avoidance schemes may operate in this way, umbrella companies do not

What about flat rate VAT? Do Umbrellas utilise this?

[LisaContractorUmbrella]

This,
Umbrellas will manipulate your pay slip by adding in things like "Holiday Pay / Commission" to your Basic Pay so you pay the lowest income tax and NI. This allows them cream off the rest. And they keep a cut of the VAT too!

No. Absolutely not. Tax avoidance schemes may operate in this way, umbrella companies do not

[TheFaQQer]

The dodgy "Off Shore" umbrella companies in the Isle of Man dont

Offshore Umbrella Companies for UK Contractors | Top Offshore Umbrella Companies, Isle of Man, Best Offshore Umbrella Company guide

So when you said that umbrella companies keep a cut of the VAT, you meant that dodgy offshore umbrella companies keep a cut of the VAT?

This is hardly indicative of the umbrella industry.

[Taita]

This,
Umbrellas will manipulate your pay slip by adding in things like "Holiday Pay / Commission" to your Basic Pay so you pay the lowest income tax and NI. This allows them cream off the rest. And they keep a cut of the VAT too!

An employee of the umbrella is not entitled to claim VAT so "And they keep a cut of the VAT too!" is as wrong as it is meaningless!

[CloudWalker]

How do umbrellas keep a cut of the VAT?

They invoice the agency including VAT, they pay the VAT over to HMRC, surely?

The dodgy "Off Shore" umbrella companies in the Isle of Man dont

http://www.offshoreumbrellacompanies.com/

[Batcher]

I'm with Parasol and I'm unsure of what their policies are on accommodation in London.

Why don't you ask them?

[CloudWalker]

Brollys are ok if you don't want the hassle of running a company.
But If you do run your own company then you still need to pay an accountant company minimum £95 per month to do most of the stuff for you. That is unless you know what your doing and can balance the books yourself!

[TheFaQQer]

And they keep a cut of the VAT too!

How do umbrellas keep a cut of the VAT?

They invoice the agency including VAT, they pay the VAT over to HMRC, surely?

[Scotchpie]

This,
Umbrellas will manipulate your pay slip by adding in things like "Holiday Pay / Commission" to your Basic Pay so you pay the lowest income tax and NI. This allows them cream off the rest. And they keep a cut of the VAT too!

I really really need to leave the umbrella and start a Ltd.

[CloudWalker]

Very true but I hope people see Umbrellas as a short term solution so much more likely to apply than a LTD.

This,
Umbrellas will manipulate your pay slip by adding in things like "Holiday Pay / Commission" to your Basic Pay so you pay the lowest income tax and NI. This allows them cream off the rest. And they keep a cut of the VAT too!

[Scotchpie]

I may have totally misunderstood you here but are you saying that you should be able to claim £105 per night x 4 nights x 4 weeks which is £1680.00 even if you have only spent £700??

No, you only get back what you paid (you need to present the receipt). So if you found accommodation for £40 per night you get £40 per night expenses. If you go over the limit you have to fork out for the difference yourself.

[northernladuk]

Newbie question - don't knock them, either answer them helpfully or move onto the next thread. We were all starters at one point...

Contras being a newbie basher? LOL I have heard it all. Contreras is one of our seasoned and well respected poster. He is (annoying) polite to any poster how ever stupid the question is (but I am working on him so hopefully will change soon ) and always offers correct and detailed advice. He's kind of completely the opposite of me really.

But it's like anywhere is life. You ask stupid/uniformed/lazy questions you cannot expect people to be nice all the time.

[Scotchpie]

Hi Scotchpie,

If you don't mind me asking, what umbrella are you with? I'm with Parasol and I'm unsure of what their policies are on accommodation in London.

I'm with Giant. According to their expenses policy:

"You may claim for the actual receipted cost of the accommodation per night up to a maximum of:
Accommodation in London (within M25) £106.00
Accommodation elsewhere (outside M25) £90.00"

[dty]

I may have totally misunderstood you here but are you saying that you should be able to claim £105 per night x 4 nights x 4 weeks which is £1680.00 even if you have only spent £700??

I read it as there is a cap of £105 a night, so £700 for the month would be allowed as it's under the cap.