Reply to: Newbie inside IR35and allowable expenses

[Mikexx]

Many thanks for all the replies. Some were a bit harsh!

For the first couple of weeks I am using an Airbnb so working away hasn't broken the bank.

As others have said I don't have any expenses that I can claim from HMRC and the only efficient thing I can do is shovel much of the income into a pension fund, bypassing both forms of NI and Income Tax.

Thanks again.

[lucyclarityumbrella]

Let me come at it from a brolly side... the expense would only be reimbursed IF the end client is agreeing to pay for the travel element for you, if they are not willign to pay, then you will see nothing. If reimbursing, the brolly would need to check your contractual location of work on the B2B contract, if that states that the assignment involves travel to the office, then even if reimbursing this would be taxed accordingly.

If they are not reimbursing, then this comes down to a review on whether you are under SDC (Supervision, Direction and Control) by the end client. If operating inside IR35 it is unlikely you would get through an SDC test, although not impossible. If you did then you could look to see if any of the expenses could be put through via self assessment at the end of the year.

[northernladuk]

Many thanks. It's notable none of then mention anything about relocation expenses.

And while I agree that "HMRC’s view is the employee’s pay is earnings from employment ......" there are rafts of expense and allowances that are allowed in relocating through normal employment. In fact that is my point.

But you aren't normally employed. You've got the whole understanding of what you are fundamentally wrong. You are in 'pseduo employment' as nothing more than doing the minimum to get paid from an inside gig. Your 'employer' is your umbrella who will do absolutely nothing but the legal minimum. Proper employers might do a lot of things as benefits which costs them time and money, a short term payroll company will not.

It's been explained to you in mulitple posts, colours and fonts and you still aren't getting it.

[sadkingbilly]

Relocating means moving house, not travelling from where you live.

I'm not sure why you're refusing to understand the difference between travelling to work and moving house.

the usual reason, i expect.
han't heard the answer he wants (yes, all exes are tax deductable) so argues the toss in the vain hope of changing reality to suit.

[b0redom]

As everyone else has said - there are, generally speaking, no allowable expenses at all for inside IR35 contracts. Your contract might be 200 miles away. You have the option to either:

1) Move house
2) Get a hotel close by
3) Commute every day
4) Not take the role

The first 3 ALL come from post tax income as an inside IR35 contractor.

[WTFH]

Many thanks. It's notable none of then mention anything about relocation expenses.

And while I agree that "HMRC’s view is the employee’s pay is earnings from employment ......" there are rafts of expense and allowances that are allowed in relocating through normal employment. In fact that is my point.

Relocating means moving house, not travelling from where you live.

I'm not sure why you're refusing to understand the difference between travelling to work and moving house.

[sadkingbilly]

I am conscious that rules keep changing and I read some articles on this subject that are clearly out of date.

I am considering using umbrella.co.uk or PayStream as they are on my agent’s list and allow for a Salary Sacrifice for a pension. Are there any views on these two?

My new place of work is a long way from home and also from my current workplace. I had believed the 24 month rule for permanent staff in respect of relocation accommodation and travel expenses also applied for contracts shorter than 24 months. Is this the case or are these now disallowed?


I would be grateful for any help.

No it isn't.
There aren't any allowable travel/subsistence/accommodation expenses under IR35.

[eek]

Many thanks. It's notable none of then mention anything about relocation expenses.

And while I agree that "HMRC’s view is the employee’s pay is earnings from employment ......" there are rafts of expense and allowances that are allowed in relocating through normal employment. In fact that is my point.

Take the contract and see what the umbrella does - but I can tell you that they won't be paying relocation expenses...

[Mikexx]

Actually let's just spell it out in simple to understand sentences

Go and look at https://www.gov.uk/government/public...-and-suppliers

And note that every explanation from HMRC is a variation of

HMRC’s view is the employee’s pay is earnings from employment and therefore subject to Income Tax and NICs.

Many thanks. It's notable none of then mention anything about relocation expenses.

And while I agree that "HMRC’s view is the employee’s pay is earnings from employment ......" there are rafts of expense and allowances that are allowed in relocating through normal employment. In fact that is my point.

[eek]

Actually let's just spell it out in simple to understand sentences

Go and look at https://www.gov.uk/government/public...-and-suppliers

And note that every explanation from HMRC is a variation of

HMRC’s view is the employee’s pay is earnings from employment and therefore subject to Income Tax and NICs.

[WTFH]

Many thanks for the reply.

I suppose I thought that employment Inside IR35 was pretty much the same as for permanent employees.

By way of example:
https://www.nhsjobs.com/documents?edoc=2926
ie. New Starters Relocation Policy.pdf for an NHS Trust incudes items like "Temporary accommodation costs" as allowable expenses up to the £8,000 limit.

Did you actually read the start of that document, or just cherry pick a line or two from it?

This policy is applicable to all newly recruited employees of North Staffordshire Combined Healthcare NHS Trust who require some assistance towards the cost of removal expenses or those who need to move their home.

And then in the Scope section it explains again that it is only for those moving house, and if they do get accepted to be able to have the expenses, they need to stay with the NHS for at least 2 years.

It is NOT a policy to say that you get £8k towards travelling to work or staying in hotels when you travel to work from your home.

[eek]

This is whether the umbrella company will pay it as a salary sacrifice. The end client and agency will be oblivious to any financial, tax or allowable relocation expenses.

The answer will be No because HMRC have people who watch umbrella expenses like a hawk..

[northernladuk]

Many thanks for the reply.

I suppose I thought that employment Inside IR35 was pretty much the same as for permanent employees.

By way of example:
https://www.nhsjobs.com/documents?edoc=2926
ie. New Starters Relocation Policy.pdf for an NHS Trust incudes items like "Temporary accommodation costs" as allowable expenses up to the £8,000 limit.

This where you need to really understand what you do and where you sit in the chain. Remember that you are employed by the Umbrella company, not the people you are working for. They are your client. Assuming emplyoment inside IR is the same for perm is wholly wrong and thinking like that you are never going to be able to understanding it's nuances. It's still a contract, they are still your client, all that has changed is the way you get paid and taxed. Now by a brolly who has to 'employ' you rather than through a LTD. It's your umbrella's policies for benefits and salary sacrifice etc you need to be looking at and you can expect the Umbrella benefits will be the absolute bare minimum the law requires.

[malvolio]

This is whether the umbrella company will pay it as a salary sacrifice. The end client and agency will be oblivious to any financial, tax or allowable relocation expenses.

Ermm, yes, but you are responsible for paying the correct amount of tax, nobody else. If expenses aren't allowable under OWT/IR35, then tax is owed on all your income regardless of any labels applied to the payments.

You should be asking the umbrella really, as part of your due diligence. Talk to your preferred ones (and also talk to Clarity Umbrella, who will be happy to answer such things).

Getting this wrong could become expensive.

[Mikexx]

If the end client is willing to pay it you may get it - but I somehow doubt it - the end client / agency will just move on to the next contractor...

This is whether the umbrella company will pay it as a salary sacrifice. The end client and agency will be oblivious to any financial, tax or allowable relocation expenses.