Reply to: Wow! can Prosperity4 really do this for me?

[oraclesmith]

What they are saying is that expenses up to those limits can be claimed, and if you are audited then the taxman will probably also allow expenses up to that limit (unless he finds something else astray, in which case he will ask for the tax back). Nobody really expects you to get a receipt for a £3.50 sandwich, but equally nobody expects you not to get a reciept for a £25 pub lunch with wine.

I had a read of the actual dispensation letter from HMRC which is on Prosperity4's website and the HM Inspector actually mention 'per diem' before listing the allowances. This is interesting because one interpretation of per diem is a fixed daily allowance. If the HM Inspector really meant fixed daily allowance, then it means that Prosperity4 employees could ONLY claim the fixed amount for receiptless claims and not anything less. How HMRC deal with the employees personal tax situation would also be interesting in this case, because I guess they could claim that in order to get the fixed allowance you should'nt have a receipt and therefore they shredded it for security reasons. Hmmmm.....

[malvolio]

Yes I know they said that before but in Paradigm they now say their expenses policy has changed.
What is the point of Parasol saying ..'if you do not have receipts...you can claim £15 subsistence etc' and then expecting you to suddenly produce receipts if they decide to 'audit' you? It doesn't make any sense and would be totally contradictory.

Another reason why people should use umbrellas: it's clearly too difficult to do it for yourself...

What they are saying is that expenses up to those limits can be claimed, and if you are audited then the taxman will probably also allow expenses up to that limit (unless he finds something else astray, in which case he will ask for the tax back). Nobody really expects you to get a receipt for a £3.50 sandwich, but equally nobody expects you not to get a reciept for a £25 pub lunch with wine.

Get it?

[hattra]

Giant allow £9.50 "incidental expenses" without receipts for over 7 hours and £15 for over 10 hours (at least 6 at work), which is about in line with what I could claim without receipt when I was last in permiedom. Apart from that and mileage claims, everything else has to have receipts. They also don't allow you to claim for capital expenditure .

[absoft]

Confusing

Yes I know they said that before but in Paradigm they now say their expenses policy has changed.
What is the point of Parasol saying ..'if you do not have receipts...you can claim £15 subsistence etc' and then expecting you to suddenly produce receipts if they decide to 'audit' you? It doesn't make any sense and would be totally contradictory.

[Pondlife]

From their expenses guide online

IMPORTANT INFORMATION - PLEASE READ
WHILST WE DO NOT REQUIRE RECEIPTS TO BE SUBMITTED FOR CLAIMS FOR
SUBSISTENCE OR HOTEL ACCOMODATION WHICH IS LESS THAN £45, IT IS AN
INLAND REVENUE STIPULATION THAT WE AUDIT A SELECTION OF CLAIMS ON A
MONTHLY BASIS. IF YOUR CLAIM IS SELECTED FOR AUDIT THEN YOU WILL NEED
TO PROVIDE RECEIPTS TO SUBSTANTIATE YOUR CLAIM – IF YOU CANNOT PROVIDE
THESE RECEIPTS THEN WE ARE OBLIGED TO FORWARD THE DETAILS ONTO THE
INLAND REVENUE FOR FURTHER INVESTIGATION.

HTH

[absoft]

Parasol also say you can claim £15 per day subsistence

In Parasol's latest new newsletter called Paradigm it states:-

Subsistence Claims

......If you do not have receipts to support your claims, you can continue to claim:
£45 per night for hotel accommodation
A meal allowance of up to

- £5 for over 5 hours working

- £15 for over 10 hours working

- £21 per night away.

- £25 “friends and family” allowance.

The key change in supporting un - receipted expenses is that in addition to claiming your daily subsistence you can claim the applicable overnight rate if you are staying away from home. You could therefore claim up to £40 per day subsistence expenses.

So if a responsible Umbrella like Parasol say you can claim £15 a day for meals unreceipted (for being away over 10 hours) then it must be true; mustn't it? Why would they suggest you claim this without receipts if it is not safe to do so?

[Dundeegeorge]

I understand that joining P4

can also increase the size of your penis, increase your vocabulary and make you more attractive to women.

Oh, it says here, it doesn't work on Russians.

[malvolio]

"I suspect that P4 are just the sort that Gordie is after in his recently announced crackdown on dodgy brollys."

That may be true, what I can't understand is why nobody has taken action so far. I first heard about p4 about 4 or 5 years ago. I thought it sounded too good to be true then. But that said, there must be a load of people who could potentially face financial disaster when (if) the IR come knocking.

May well be true, but HMRC are looking at all such companies at the moment, and the expectation is that composites will be in the firing line. Proper umbrellas are not tax-avoidance mechanisms since they don't pay dividends and so there is no NIC avoidance going on (in effect, you're inside IR35 anyway so who cares).

The problem with some perfectly legitimate umbrellas is the way they quote maximum possible values to pump up the apparent return - but then if you're dim enough to believe you can claim overnight allowance, £25 lunches and daily travel costs for the same day's work, you probably deserve to be caught anyway. As someeone said, this is more to do with the ASA then Hector.

But if you're with a composite, I would be getting a little worried about the future.

[BoredBloke]

"I suspect that P4 are just the sort that Gordie is after in his recently announced crackdown on dodgy brollys."

That may be true, what I can't understand is why nobody has taken action so far. I first heard about p4 about 4 or 5 years ago. I thought it sounded too good to be true then. But that said, there must be a load of people who could potentially face financial disaster when (if) the IR come knocking.

[v8gaz]

I suspect that P4 are just the sort that Gordie is after in his recently announced crackdown on dodgy brollys.

Stay well away! It's not worth it!

[oraclesmith]

Prosperity are your employer if you go with them, and they are allowed to reimburse their employees with legitimate business expenses, including a minimal payment (at the petty expenses level) for overnight accommodation at friends/relatives provided it is necessary in the course of the employees duties. The HMRC do the same for their own investigators on what's called the non-commercial scale. The expenses are, of course, supposed to be paid to the owner of the accommodation to compensate them for the cost of the stay.

[Torran]

you can claim up £25 per night when you sleep on a friends sofa.

Anyone got any ideas where they get the sofa thing from?

I believe this to be true. Not sure how it all legalises itself though.

anyone be arsed looking through the Revenue website?

[DimPrawn]

"Surely none of the highly intelligent members of this board would fall for something as amatuerish and nonsensical as the P4 blurb"

Not people on this board, but given the obviously large amounts they spend on advertising, i would say that plenty of others do fall for this. I just wondered why the IR have not done anything yet.

They (P4) are probably good friends of the New Labour Party and have "lent" them a few bob.

HTH

[BoredBloke]

I'ts also worth noting that P4 are very keen on monitoring these types of web forumns, so don't say anything which you may regret. I have it on good authority that they have already approached shout99 regarding some of the comments already on there. Given ContractorUK's speedy removal of the test please delete thread, imagine how quickly they will react to threats of legal action from P4.

[DaveB]

Just took a look at their webtulipe. I may need a shower later.

Among other things they are also claiming that contractors using their services will not be visited by the tax man and that you can claim up £25 per night when you sleep on a friends sofa.

Anyone got any ideas where they get the sofa thing from?