Reply to: Subsistence

[AtW]

Rumour has it Chico has renounced faith and joined strip club called "Blue Oyster" to live it up while he is still young.

[Lucifer Box]

He'll Believe Anything

He sounds like just the sort of person who should be introduced to Chico.

[MarillionFan]

But he's a new contractor Lucifer. Made the jump 18 months ago. He believes them. He believes agents. Of course the role fell through because they had changed their minds and not because that other bloke from Romania you saw in reception was half your rate.

Fairs fair Lucifer.

[Lucifer Box]

"Stop winding the boys up, no-one is ever going to believe someone could be so stupid as to believe that, even you..." - Young Neo is!!!! Tried telling him, but he reckons they are right.

Best call the confidential "shop a cheat" line on 0800 59 5000 and drop him in it then. It's thieves like him that push up taxes for the rest of us

[Lucifer Box]

Q. I've heard that, through Prosperity4, I needn't present receipts to Prosperity4 for expenses such as food. Is this true; and is it legal?

A. Yes, it's true - and all above board thanks to our expenses policy approved by HM Revenue & Customs. If you spend up to £24 a day on food, you can claim back the tax without having to present receipts to Prosperity4. This means your lunch is effectively (but not actually) free twice a week.

Well done, Robot. A little emphasis and addition helps clear up the ambiguous wording that umbrellas use to prey upon greedy and stupid contractors. The umbrella don't give a tulip if you misunderstand what they're saying, after all, it's the contractor that gets the tax bill plus interest and penalties, not them.

[MarillionFan]

"Stop winding the boys up, no-one is ever going to believe someone could be so stupid as to believe that, even you..." - Young Neo is!!!! Tried telling him, but he reckons they are right.

[Robot]

It's true you can claim up to £24 for lunch....

without a receipt....read on

Prosperity4 - From their FAQs

Q. I've heard that, through Prosperity4, I needn't present receipts for expenses such as food. Is this true; and is it legal?

A. Yes, it's true - and all above board thanks to our expenses policy approved by HM Revenue & Customs. If you spend up to £24 a day on food, you can claim back the tax without having to present receipts. This means your lunch is effectively free twice a week.


HOWEVER, PLEASE NOTE THE CATCH WORDS "IF YOU SPEND"

A lot of people seem to read this as "I can take a packed lunch to work each day and claim £24 per day"

Remember even if the umbrella company doesn't want to see the receipt the Inland Revenue might want to see your records one day and if you don't have them, there maybe trouble ahead........

[Lucifer Box]

On the unreceipted expenses bit, they claim to have an agreement with HMRC that certain amounts are "de minimis" and don't need receipts - it sounds reasonable, as I had exactly the same thing in my permie days - we were allowed to claim hotel expenses, up to a certain maximum, and £10 - 15 a day, without receipts, for meals and incidentals - you could claim more for meals if you had receipts to prove that you'd spent more (again there was a limit).

Sorry, but this is just so wrong. See the accounting forum for the innumerable threads discussing this. Anyone who cannot produce receipts or other proof of expenditure (credit card bill, bank statement, etc.) for everything other than the £5 PIEs allowance for overnight stays away from home (£10 if overseas) is going to face a bill when audited for tax due, plus interest and penalties. There is no such thing as an unreceipted de minimis, per diem or anything of the sort and anyone who thinks the taxpayer is going to pay you just for leaving the house in the morning is at best incredibly naiive.

[hattra]

Things to remember #1: The umbrella is a service organisation, not a source of advice and guidance or, in many cases, even good practice

Things to remember #2: If you screw up, you get fined, not them. They don't care.

You may not need receipts to give to the umbrella, that's up to them (and it's your money they're spending so they also don't care) and they won't have to provide receipts to the taxman when they pay off their VAT bill. That's why they have the dispensation: it's nothing to do with you.

However, you will have to prove the expenditure if you get audited for VAT, so you need to keep the receipts for everything you have claimed. Fail to do so and (a) they will make an assessment of what you owe, (b) you will be fined (or worse) and (c) you will find youself in the middle of an IR35 investigation just for fun.

Even under the flat rate scheme you should keep an audit trail, even if you don't have to account for it.

I think its the directors of a company that carry the can for improper accounting - in my case (still using Giant, cos I can't be bothered to do the paperwork) I'm not the director, though I am the sole shareholder. Somebody in Giant is the director of "my" company, so it's in their interests to get it right. Giant keep all the receipts - I just keep copies, since THEY are the ones who have to prove anything to HMRC

On the unreceipted expenses bit, they claim to have an agreement with HMRC that certain amounts are "de minimis" and don't need receipts - it sounds reasonable, as I had exactly the same thing in my permie days - we were allowed to claim hotel expenses, up to a certain maximum, and £10 - 15 a day, without receipts, for meals and incidentals - you could claim more for meals if you had receipts to prove that you'd spent more (again there was a limit).

[Mordac]

Malv. Its just I keep seeing threads popping up about certain umbrella companies saying they have dispensation.ie. Giant

A contractor I know is putting in £25 per day expenses on the word of his umbrella company withot receipts. I thought this was bollocks but he is convinced it is correct and I have seen posts on here doing the same.

So what is it?

Stop winding the boys up, no-one is ever going to believe someone could be so stupid as to believe that, even you...

[malvolio]

Malv. Its just I keep seeing threads popping up about certain umbrella companies saying they have dispensation.ie. Giant

A contractor I know is putting in £25 per day expenses on the word of his umbrella company withot receipts. I thought this was bollocks but he is convinced it is correct and I have seen posts on here doing the same.

So what is it?

Things to remember #1: The umbrella is a service organisation, not a source of advice and guidance or, in many cases, even good practice

Things to remember #2: If you screw up, you get fined, not them. They don't care.

You may not need receipts to give to the umbrella, that's up to them (and it's your money they're spending so they also don't care) and they won't have to provide receipts to the taxman when they pay off their VAT bill. That's why they have the dispensation: it's nothing to do with you.

However, you will have to prove the expenditure if you get audited for VAT, so you need to keep the receipts for everything you have claimed. Fail to do so and (a) they will make an assessment of what you owe, (b) you will be fined (or worse) and (c) you will find youself in the middle of an IR35 investigation just for fun.

Even under the flat rate scheme you should keep an audit trail, even if you don't have to account for it.

[Gonzo]

"Who gives you a VAT receipt for your lunch in any case?" - The canteen

OK. I have never had to develop the habit of always asking for a VAT receipt because of the flat rate scheme - and I don't expense my lunch to my company. From comments on this board it seems that Umbrella companies suggest that you can do this but I am a bit dubious about being able to claim for subsistence unless you are staying away from home overnight.

[MarillionFan]

"Who gives you a VAT receipt for your lunch in any case?" - The canteen

[Gonzo]

What does everyone do for this on VAT Returns. I always add up all the receipts I have but it takes for ever, or do you just do £5 per day?

Flat rate scheme for VAT.

By my back of a fag packet calculations* if your expenditure is less than about 11% of turnover then you will be financially better off being in this scheme as well as not having to bother adding up the receipts for your expenditure for VAT purposes.

* assuming turnover is less than £150,000 and you can apply for the scheme and you fall into the 13% band for Computer and IT Consultancy.

Usual disclaimer - IANAA etc etc.

Who gives you a VAT receipt for your lunch in any case?

[MarillionFan]

Malv. Its just I keep seeing threads popping up about certain umbrella companies saying they have dispensation.ie. Giant

A contractor I know is putting in £25 per day expenses on the word of his umbrella company withot receipts. I thought this was bollocks but he is convinced it is correct and I have seen posts on here doing the same.

So what is it?