Complete Newbie to Contracting

[northernladyuk]

Hi,

I recently took up a 6 month contracting gig within the public sector and was put down the umbrella route with the choice of 3 agencies on recruiters PSL. After much deliberation, I chose one of the 3 after hearing all the terms and conditions and researching a fair amount on the net.

What I need to better understand from an independent viewpoint and not from someone trying to get my service.

Claiming expenses through Umbrella has all changed. I have passed the SDC test on all 3 agencies as I work fully autonomously however what is actually claimable in terms of mileage, travel, subsistence and lodgings?

I commute 1000 miles (round trip) per week to temporary lodgings for my assignment for the next 6 months and will be driving some weeks and also flying some others. From my first wage it seems I am able through tax relief claim back about 89% of the wage - is this the normal? I keep all my receipts for my own sanity even though the payroll company stated this is not necessary and am claiming lodgings, mileage 45p for first 10,000 and subsistence of £25 per day when based at temporary lodgings.

I would just like re-assurance that this is the normal and how many people out there under umbrella contracts are claiming expenses?

The agency I am using are very reputable but will keep them anonymous.

I appreciate everyone's help and apologise in advance for poor grammar

So the agency is reputable, good. Who is the umbrella? I think it is worth your sharing, because something is very wrong here.

[bobspud]

The points about what HMRC are going to do to you aside:

You need to go and find a decent permanent role and hide in there for a few more years. The alternative is probably going to be bankruptcy and quite a lot of misery.

I am giving you this advice for the following reasons.

1) The business model for contracting is you are supposed to take an exceedingly large day rate and use tax efficient practices to store most of it like a squirrel. Then come winter you have something to eat so you do not starve. Being fooled into paying 54% tax for no workers rights or job security is going to cost you.

Please note: Many of us are bloody stupid and despite knowing we could be in a position of storing 100k plus in reserves within a contract or two still piss every earned penny up the wall on frivolous crap. Don't be one of them they are dumb...

2) Even with IR35 and the governments totally retarded behaviour I honestly believe we are about to hit a vary bad period and I am not sure that even I will survive it with my business in tact and I have been contracting for 15 years.

3) If all you are doing is moving from working for a company that will have to suffer you being on the bench to one where your project can be cut all of a sudden and you did not triple your salary for it you have sold yourself far too low and the only one winning is the agency that is creaming you and the client that gets a slave.

Wise up and go back into somewhere safe.

[mudskipper]

I think it's still the case that if working via a limited company, the expenses test is "IR35", but if working via a brolly, the expenses test is "SDC". However, if the PS client have stated that the role is IR35 caught, then they are effectively saying that there is SDC - if there isn't then the role should be outside IR35.

So in short, you cannot claim expenses if the client has said the role is inside IR35 (it's not clear if this is the case - the fact that you were "put down the umbrella route" would suggest it is)

All your income needs to be taxed as PAYE - 89% take home is much too high - it's not clear whether you got to this figure from deducting your expenses, or whether you have signed up for a "scheme" to maximise your take home. If the latter, then get out quick - there is a world of pain and misery awaiting (See the HMRC Scheme Enquiries sub forum).

Good luck!

[woohoo]

Have you spoken to your accountant?

[northernladuk]

Probably better looking at the Umbrella section for the answer to this not the PS section. Too much noise in there to find what the OP is after. Lucy had had a beef about this a number of times in the more recent threads.

[Mordac]

Hi,

I recently took up a 6 month contracting gig within the public sector and was put down the umbrella route with the choice of 3 agencies on recruiters PSL. After much deliberation, I chose one of the 3 after hearing all the terms and conditions and researching a fair amount on the net.

What I need to better understand from an independent viewpoint and not from someone trying to get my service.

Claiming expenses through Umbrella has all changed. I have passed the SDC test on all 3 agencies as I work fully autonomously however what is actually claimable in terms of mileage, travel, subsistence and lodgings?

I commute 1000 miles (round trip) per week to temporary lodgings for my assignment for the next 6 months and will be driving some weeks and also flying some others. From my first wage it seems I am able through tax relief claim back about 89% of the wage - is this the normal? I keep all my receipts for my own sanity even though the payroll company stated this is not necessary and am claiming lodgings, mileage 45p for first 10,000 and subsistence of £25 per day when based at temporary lodgings.

I would just like re-assurance that this is the normal and how many people out there under umbrella contracts are claiming expenses?

The agency I am using are very reputable but will keep them anonymous.

I appreciate everyone's help and apologise in advance for poor grammar

Alarm bells ringing all over this. Please see the relevant forum posts on contracting in the public sector. Expenses are now a total no-no, along with any of the "perks" previously associated with contracting - you should be paying PAYE on 100% and if you're not, it's on your head. The consequences may involve a stay at Her Majesty's Pleasure (prison, for the non-natives) but will certainly involve a very large fine.

[Wullie36]

Hi,

I recently took up a 6 month contracting gig within the public sector and was put down the umbrella route with the choice of 3 agencies on recruiters PSL. After much deliberation, I chose one of the 3 after hearing all the terms and conditions and researching a fair amount on the net.

What I need to better understand from an independent viewpoint and not from someone trying to get my service.

Claiming expenses through Umbrella has all changed. I have passed the SDC test on all 3 agencies as I work fully autonomously however what is actually claimable in terms of mileage, travel, subsistence and lodgings?

I commute 1000 miles (round trip) per week to temporary lodgings for my assignment for the next 6 months and will be driving some weeks and also flying some others. From my first wage it seems I am able through tax relief claim back about 89% of the wage - is this the normal? I keep all my receipts for my own sanity even though the payroll company stated this is not necessary and am claiming lodgings, mileage 45p for first 10,000 and subsistence of £25 per day when based at temporary lodgings.

I would just like re-assurance that this is the normal and how many people out there under umbrella contracts are claiming expenses?

The agency I am using are very reputable but will keep them anonymous.

I appreciate everyone's help and apologise in advance for poor grammar