Reply to: Umbrella offering expenses?!

[eek]

As an example, I had an inside contract (via an umbrella) with an MSP. I.e. various other organisations had outsourced the IT to them. If I drove out to a client site to replace their router, I could claim the travelling expenses between the MSP's office and the client site (45p/mile). However, I couldn't claim anything to get from my home to the MSP's office.
NB The mileage expenses were on top of my daily rate, i.e. this didn't reduce the amount of tax/NI that I paid.

I think that NLUK is correct: the umbrella has chosen their words carefully, to say something that is technically true, but potentially misleading.

Rechargeable expenses are allowed - the issue is none rechargeable (sustenance) expenses

[hobnob]

Looking for a new brolly now and noticed a lot of them are still saying "you might be able to get travelling expenses".

As an example, I had an inside contract (via an umbrella) with an MSP. I.e. various other organisations had outsourced the IT to them. If I drove out to a client site to replace their router, I could claim the travelling expenses between the MSP's office and the client site (45p/mile). However, I couldn't claim anything to get from my home to the MSP's office.
NB The mileage expenses were on top of my daily rate, i.e. this didn't reduce the amount of tax/NI that I paid.

I think that NLUK is correct: the umbrella has chosen their words carefully, to say something that is technically true, but potentially misleading.

[eek]

Surprised????? Honestly????

Short term gains against potential long term loss in reputation, not that anyone really has any reputation worth protection beyond a couple of exceptions.

[lucyclarityumbrella]

Surprised????? Honestly????

[eek]

Which the less scrupulous umbrellas are using as a sales tactic to get clueless contractors interested?

Yep including some names that I thought would be above such things...

[northernladuk]

So my conversation with HMRC back when IR35 came into the public sector was along these lines...

If inside IR35, likelihood is that the contractor would fail an SDC test (not that an official test actually exists), on a rare occasion that the end client would declare that the contractor is not under SDC, then the contractor "may" be able to claim these back via self assessment at the end of the year.

Which the less scrupulous umbrellas are using as a sales tactic to get clueless contractors interested?

[lucyclarityumbrella]

Yep - if the contract is outside IR35 and you are not subject to SDC and wish to use an umbrella then you could claim expenses.

So my conversation with HMRC back when IR35 came into the public sector was along these lines...

If inside IR35, likelihood is that the contractor would fail an SDC test (not that an official test actually exists), on a rare occasion that the end client would declare that the contractor is not under SDC, then the contractor "may" be able to claim these back via self assessment at the end of the year.

[northernladuk]

Yep - if the contract is outside IR35 and you are not subject to SDC and wish to use an umbrella then you could claim expenses.

However, the umbrellas that push expenses don't use the outside distinction and have a questionnaire that is surprisingly easy to pass given the hints they provide...

Sane umbrellas won't touch the idea with a barge-pole as HMRC investigations aren't fun and will result in a large cost even if you are 100% in the right.

Gotcha. That's what I thought.

[eek]

You might not but there are situations where an outside gig might be run through a brolly. People that can't set up a LTD, single engagement where LTD isn't worthwhile, someone that's MVL'd and can't use a LTD for the next two years etc.

I see Eek's comment and I am afraid to ask but I will. Isn't there certain situations linked to SDC where expenses 'might' be possible and all the umbrella are doing are using the possibility in rare circumstances as an excuse to be very liberal with their sales pitch? Is it not true a few people 'might' be able to claim it but it's misleading to use it in general documentation/sales pitches?

Yep - if the contract is outside IR35 and you are not subject to SDC and wish to use an umbrella then you could claim expenses.

However, the umbrellas that push expenses don't use the outside distinction and have a questionnaire that is surprisingly easy to pass given the hints they provide...

Sane umbrellas won't touch the idea with a barge-pole as HMRC investigations aren't fun and will result in a large cost even if you are 100% in the right.

[northernladuk]

Looking for a new brolly now and noticed a lot of them are still saying "you might be able to get travelling expenses".

Having been on an inside role for the last 4 years this is news to me....

But reading the above, if its deemed inside by the client then no expenses anyway. I don't get it - if it was outside I wouldnt be using a brolly in the first place!

You might not but there are situations where an outside gig might be run through a brolly. People that can't set up a LTD, single engagement where LTD isn't worthwhile, someone that's MVL'd and can't use a LTD for the next two years etc.

I see Eek's comment and I am afraid to ask but I will. Isn't there certain situations linked to SDC where expenses 'might' be possible and all the umbrella are doing are using the possibility in rare circumstances as an excuse to be very liberal with their sales pitch? Is it not true a few people 'might' be able to claim it but it's misleading to use it in general documentation/sales pitches?

[SimonMac]

Looking for a new brolly now and noticed a lot of them are still saying "you might be able to get travelling expenses".

Having been on an inside role for the last 4 years this is news to me....

But reading the above, if its deemed inside by the client then no expenses anyway. I don't get it - if it was outside I wouldnt be using a brolly in the first place!

[eek]

Looking for a new brolly now and noticed a lot of them are still saying "you might be able to get travelling expenses".

Having been on an inside role for the last 4 years this is news to me....

But reading the above, if its deemed inside by the client then no expenses anyway. I don't get it - if it was outside I wouldnt be using a brolly in the first place!

It's another f***ing scam and depends on a reading of HMRC expenses policy which doesn't reflect my personal opinion, nor that of the people in HMRC who deal with expenses (when I checked how accurate my opinion was).

[psychocandy]

Looking for a new brolly now and noticed a lot of them are still saying "you might be able to get travelling expenses".

Having been on an inside role for the last 4 years this is news to me....

But reading the above, if its deemed inside by the client then no expenses anyway. I don't get it - if it was outside I wouldnt be using a brolly in the first place!

[northernladuk]

I suspect that a similar thing will happen for iPhones etc.

Phones have been an accepted exception for many years and are integral to work, LTD, self employed or perm so I don't think they'll change at all. Virtually everyone on earth has one now and are not a business benefit now.

And I think you mean just 'phones' and not iphones.

[hobnob]

I'm not sure that a 3 month old iphone is worth just 15% of the original purchase price though

Yeah, that reminds me of the cycle to work scheme. Companies can sell bikes to employees at the end of the rental period, and in the early days it was standard to charge 5% of the original purchase price. Then HMRC said that was unrealistic, as per the valuation table on this page:
EIM21667A - Employment Income Manual - HMRC internal manual - GOV.UK (www.gov.uk)

If the rental scheme lasted for a year, then the acceptable disposal value is 18% (for a bike that cost less than £500) or 25% (for a bike that cost £500 or more). That means the company either has to sell the bike for that much, or they can sell it for less and treat the saving as a BIK.

I suspect that a similar thing will happen for iPhones etc.