Umbrella company and T&S expenses

[malvolio]

I am very confused by T&S claims. My brolly, Cloud9, says:

A ‘permanent’ employee... working in one place cannot be reimbursed his/her expenses of travelling to and from work, without having to pay tax on them. A ‘temporary’ employee... working in one place for the length of the employment, is in the same position.

But, a ‘permanent’ employee... whose job is to work on assignments in a succession of qualifying ‘temporary workplaces’ can be reimbursed those expenses, without having to pay tax on them. The purpose of the arrangements offered by an umbrella company is to be the employer for such employees, and to open the door to the employees being able to get the benefit of tax-free reimbursement of those expenses.

Lucy says I have to have an intention to work multiple assignments through the brolly, but what happens if I have this intention but fail to get multiple assignments?

Then you will owe some extra tax at year end.

[bikeman]

I am very confused by T&S claims. My brolly, Cloud9, says:

A ‘permanent’ employee... working in one place cannot be reimbursed his/her expenses of travelling to and from work, without having to pay tax on them. A ‘temporary’ employee... working in one place for the length of the employment, is in the same position.

But, a ‘permanent’ employee... whose job is to work on assignments in a succession of qualifying ‘temporary workplaces’ can be reimbursed those expenses, without having to pay tax on them. The purpose of the arrangements offered by an umbrella company is to be the employer for such employees, and to open the door to the employees being able to get the benefit of tax-free reimbursement of those expenses.

Lucy says I have to have an intention to work multiple assignments through the brolly, but what happens if I have this intention but fail to get multiple assignments?

[lucyclarityumbrella]

Thank you for clarifying this. Could you expand on "multiple assignments with the umbrella and that you were employed under an overarching contract of employment." - How would a longer 6 months contract with one employer fit into this.

OK previously in order to be able to claim expenses, it had to be your intention to have multiple assignments whilst working under the umbrella company, ie when one came to an end that you would undertake another with the umbrella company. If you did not fulfil this then expenses for tax relief purposes were not allowable. So in your case, if you had only one assignment with the brolly then this becomes a permanent place of work, 2 assignments and you would be travelling to a temporary workplace - hence expenses were allowable. The overarching contract makes the link between the temporary workplaces.

That said, as we haven't yet gone past the end of the financial year since the T&S Legislation was introduced, we have no idea how many contractors will be successful in submitting the claims on their SA.

[polagon]

IF you are not deemed under SDC then the expense rules would be as they always were... you would need to show that you had multiple assignments with the umbrella and that you were employed under an overarching contract of employment.

The expense rules originally covered travel and subsistence, so to and from you temporary workplace would have been allowable, receipted costs of meals (not a simple allowance) whilst on assignment. Only the calls would be allowable with the mobile providing you could prove they were business calls, the cost of the phone would not be allowable.

HTH [emoji4]

Thank you for clarifying this. Could you expand on "multiple assignments with the umbrella and that you were employed under an overarching contract of employment." - How would a longer 6 months contract with one employer fit into this.

[lucyclarityumbrella]

Can I add some questions here. Lets assume it's not under SDC. I have asked an Umbrella company about what expenses I can claim and how that would work. They have been somewhat shy with sharing absolute information to me. But they have mentioned that I will under my new contract role be able to:
- Claim public transport expenses to and from my new office
- Claim daily subsistences costs like food and drinks
- Claim expenses on the cost of buying a new phone for my work. And I would receive 20%/40% back in the form of a tax refund (dependant on tax bracket I presume).

IF you are not deemed under SDC then the expense rules would be as they always were... you would need to show that you had multiple assignments with the umbrella and that you were employed under an overarching contract of employment.

The expense rules originally covered travel and subsistence, so to and from you temporary workplace would have been allowable, receipted costs of meals (not a simple allowance) whilst on assignment. Only the calls would be allowable with the mobile providing you could prove they were business calls, the cost of the phone would not be allowable.

HTH [emoji4]

[Anonimouse]

I have worked for agent before, but they have never pushed parasol, but they were pushing expenses on PS role.

[eek]

This confirms the approach from agent last week pushing me towards parasol.

That will be due to size of kickbacks from Parasol to Agent....

[Anonimouse]

This confirms the approach from agent last week pushing me towards parasol.

[polagon]

That doesn't sound right. What's the name of your umbrella?

Parasol.

[eek]

Can I add some questions here. Lets assume it's not under SDC. I have asked an Umbrella company about what expenses I can claim and how that would work. They have been somewhat shy with sharing absolute information to me. But they have mentioned that I will under my new contract role be able to:
- Claim public transport expenses to and from my new office
- Claim daily subsistences costs like food and drinks
- Claim expenses on the cost of buying a new phone for my work. And I would receive 20%/40% back in the form of a tax refund (dependant on tax bracket I presume).

I've read plenty, the links in this thread and other + Googling. But still not sure if what they have mentioned is actually correct. Can someone please enlighten me.

Many thanks,
Penglund

That doesn't sound right. What's the name of your umbrella?

[polagon]

In simplistic terms if they are under a compliant brolly, then expenses cannot be processed at source. If they are NOT under Supervision, Direction and Control then they would have to process these via self-assessment at the end of the financial year. This may help explain, so please feel free to send this link on to them

Can I add some questions here. Lets assume it's not under SDC. I have asked an Umbrella company about what expenses I can claim and how that would work. They have been somewhat shy with sharing absolute information to me. But they have mentioned that I will under my new contract role be able to:
- Claim public transport expenses to and from my new office
- Claim daily subsistences costs like food and drinks
- Claim expenses on the cost of buying a new phone for my work. And I would receive 20%/40% back in the form of a tax refund (dependant on tax bracket I presume).

I've read plenty, the links in this thread and other + Googling. But still not sure if what they have mentioned is actually correct. Can someone please enlighten me.

Many thanks,
Penglund

[lucyclarityumbrella]

In simplistic terms if they are under a compliant brolly, then expenses cannot be processed at source. If they are NOT under Supervision, Direction and Control then they would have to process these via self-assessment at the end of the financial year. This may help explain, so please feel free to send this link on to them

[northernladuk]

There are plenty of clear guides on the web and from what I see on a few of the Umbrellas they have pretty clear guidelines on their own pages. Here is one from CUK you might send them. Does that cover your point?

Why it's all change for umbrella companies (and umbrella contractors) from April :: Contractor UK

I think the problem might be more who they are using. Are they using some off shore scheme pretending to be an Umbrella or maybe they are using one of these that 'sponsor' them? If so their expenses are the very least of their problems.

I do find it hard to believe that if they are with any reasonable outfit that is all above board the brolly will be letting them do anything bad.

P.S We do have an Umbrella section you know. Need to improve the quality of your lurking

[Neil@Intouch]

This link should be useful, when discussing with your colleagues (Contractors' Questions: Does IR35 or using an umbrella affect T&S expenses? :: Contractor UK).

[mookiemoo]

As a long term lurker but not poster, I thought I fairly clued up on the new rules.

Work through umbrella company = no T&S expenses before tax.

I actually thought it was fairly cut and dried.

i've always been limited so maybe I havent paid as much attention to the subtleties as I thought I had but....... the developers on site at my current project are pretty much all through a brolly. They are all being allowed T&C to be paid before tax.

Seemingly the contractor sends the expenses in to the brolly who deduct it as a cost of employment before paying them the salary.

Surely this is just bloody semantics and hector may well come calling with the KY asking them to touch their toes.

Before I make myself look like an idiot and try to convince them otherwise - is the above true? Is there any specific link to where I can direct them if they refuse to believe me.

Its no skin of my nose but we have a couple of junior developers (who probably shouldn;t be contractors anyway but that's another story) who are being swayed by the long in the tooth boys and frankly if the more experienced guys get shafted its on them but I feel sort of protective towards the kids.