Reply to: Umbrella offering expenses?!

[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.

[northernladuk]

It doesn't work like that

The approach is - buy laptop from Currys with money deducted from first pay pocket.

Asset is owned by umbrella

On completion of project the materials are then disposed of (i.e. sold to the worker who wanted them in the first place).

Anyone who is used to purchase vouchers from perkbox and co will know why Currys is in the picture here.

Bah Back to having to work for a living.

[eek]

Buy new laptop through LTD, sell it back to contractor at start of an inside gig, sell back to LTD at end of gig. Start new gig, buy it back from LTD and so on.
If you can't be bothered with that the LTD leases it to contractor for each gig.

Could be a nice little money spinner that.

It doesn't work like that

The approach is - buy laptop from Currys with money deducted from first pay pocket.

Asset is owned by umbrella

On completion of project the materials are then disposed of (i.e. sold to the worker who wanted them in the first place).

Anyone who is used to purchase vouchers from perkbox and co will know why Currys is in the picture here.

[northernladuk]

Following on from the workshop I attended on Friday - I actually think Parasol are right and can allow hardware purchases for the purposes of the project.

The devil is in the detail but it is clear that materials used for the project can be deducted before deemed payments are made and that must equally apply to umbrella firms.

Now it wouldn't surprise me if HMRC tried to reject the claim and took it to court and it may seem completely strange it also makes sense given the actual rules and making the assumption that

1) the hardware is for that project (so computer, phone, iPad fine - washing machine probably not).
2) the hardware is disposed of (via reselling) at the end of the project.

The fact the hardware ends up in the workers hands at a lower price doesn't seem to have occurred to HMRC...

I'm not sure that a 3 month old iphone is worth just 15% of the original purchase price though - and VAT handling would be a very interesting thing to investigate.

Buy new laptop through LTD, sell it back to contractor at start of an inside gig, sell back to LTD at end of gig. Start new gig, buy it back from LTD and so on.
If you can't be bothered with that the LTD leases it to contractor for each gig.

Could be a nice little money spinner that.

[eek]

Following on from the workshop I attended on Friday - I actually think Parasol are right and can allow hardware purchases for the purposes of the project.

The devil is in the detail but it is clear that materials used for the project can be deducted before deemed payments are made and that must equally apply to umbrella firms.

Now it wouldn't surprise me if HMRC tried to reject the claim and took it to court and it may seem completely strange it also makes sense given the actual rules and making the assumption that

1) the hardware is for that project (so computer, phone, iPad fine - washing machine probably not).
2) the hardware is disposed of (via reselling) at the end of the project.

The fact the hardware ends up in the workers hands at a lower price doesn't seem to have occurred to HMRC...

I'm not sure that a 3 month old iphone is worth just 15% of the original purchase price though - and VAT handling would be a very interesting thing to investigate.

[eek]

I'm with Paystream and these are the questions they asked me, so they could check if the expenses were allowable


- Can you outline the nature of your usual role in more detail?
- What is the nature of your day to day travel/month to month?
- Have you worked at the site(s) you are claiming for previously?
- Will you be returning to this site(s)?
- How long will you be stationed at this site/these sites?
- Are you stationed at this site/these sites exclusively during this assignment?
- What expenses would you be claiming?
- Will the client/agency be reimbursing these expenses?

None of those questions have anything to do with SDC and the last one is completely irrelevant as client paid expenses are usually reimbursable.

*I say usually as there have been some (strange) exceptions here.

[Acme Thunderer]

Well, I spoke to Parasol today. And raised the expenses point. They said they are audited by HMRC each year and their practices are completely legal.

Also spoke to Paystream who also said I can claim expenses.

I'm with Paystream and these are the questions they asked me, so they could check if the expenses were allowable


- Can you outline the nature of your usual role in more detail?
- What is the nature of your day to day travel/month to month?
- Have you worked at the site(s) you are claiming for previously?
- Will you be returning to this site(s)?
- How long will you be stationed at this site/these sites?
- Are you stationed at this site/these sites exclusively during this assignment?
- What expenses would you be claiming?
- Will the client/agency be reimbursing these expenses?

[ladymuck]

I opted for Paystream. They were more friendly, produced an instant illustration, no heavy sales pitch and a very simple 5 minute sign up process. I dont intend on claiming any expenses personally. I'm aware i'll be under SDC most likely.

Parasol were pretty useless. Heavy sales pitch, I asked for an illustration via email and they just emailed me bullet points of why they're amazing and tried to sell me platinium. Didn't provide any illustrations, as promised. I wish I could share their email with you guys - it's actually diabolical.

CTRL+C, CTRL+V and remove personally identifying information

[sira]

Have you joined them yet - see my point above about sales pitches not necessarily matching reality.

Also you have the fun of SDC when the contract has been deemed inside by the end client which is a very different proposition from you treating it as inside.

I opted for Paystream. They were more friendly, produced an instant illustration, no heavy sales pitch and a very simple 5 minute sign up process. I dont intend on claiming any expenses personally. I'm aware i'll be under SDC most likely.

Parasol were pretty useless. Heavy sales pitch, I asked for an illustration via email and they just emailed me bullet points of why they're amazing and tried to sell me platinium. Didn't provide any illustrations, as promised. I wish I could share their email with you guys - it's actually diabolical.

[eek]

According to the link I posted earlier - Parasol reimburse Business costs (ie hardware etc) free of tax and NIC whether SDC applies or not.

https://www.parasolgroup.co.uk/wp-co...038.1602687741

But as I pointed out before hardware is not expenses.

Hardware purchases are a different issue which to be blunt I'm looking forward to finding out HMRCs opinion on now I know how Parasol do it.

[gizzmo]

Also you have the fun of SDC when the contract has been deemed inside by the end client which is a very different proposition from you treating it as inside.

According to the link I posted earlier - Parasol reimburse Business costs (ie hardware etc) free of tax and NIC whether SDC applies or not.

https://www.parasolgroup.co.uk/wp-co...038.1602687741

[eek]

What I don't get - and am probably being thick here - is how an employee can claim tax relief on a personal purchase...

For the hardware I can see how they do it but it's dubious were HMRC to match figures closely.

[eek]

Well, I spoke to Parasol today. And raised the expenses point. They said they are audited by HMRC each year and their practices are completely legal.

Also spoke to Paystream who also said I can claim expenses.

Have you joined them yet - see my point above about sales pitches not neccesarily matching reality.

Also you have the fun of SDC when the contract has been deemed inside by the end client which is a very different proposition from you treating it as inside.

[malvolio]

What I don't get - and am probably being thick here - is how an employee can claim tax relief on a personal purchase...