Originally posted by Vipz
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Reply to: Umbrella Advice needed please
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Previously on "Umbrella Advice needed please"
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Originally posted by LisaContractorUmbrella View PostIf it is your intention (this is HMRC guidance on the matter) to work on more than one assignment whilst in the employment of the umbrella company then, by virtue of the over-arching contract that you will be working under, your workplaces will be viewed as temporary and therefore you will have the entitlement to travel expenses.
What if I have the intention but then i get offered a permanent job and decide to leave the umbrella?
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Originally posted by Contreras View PostBecause the HMRC guidelines say so. If it's associated with valid business travel and it costs you more to eat than it would normally then you may claim the full price of the meal (or the agreed rate as in this case if there is dispensation from HMRC).
We've had this discussion before (several times I think) so I don't understand why you keep saying that. Maybe repeating it enough will make it true? Next up will be that it only saves 20% so why bother.
However, 20% of £6 a day for a three month contract comes out to £78 max. It would cost me more than that to do the paperwork. There comes a point where scratching around for every last penny you can drag out of the tax system against what is already a very healthy income gets to be simply too much effort. YMMV
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Originally posted by malvolio View PostYou can claim for food only if you are working long days (i.e. > 12 hours) or having unfeasibly early starts or staying away during the week. Otherwise the working assumption is you'd have to eat anyway, so how can it be a business expense?
We've had this discussion before (several times I think) so I don't understand why you keep saying that. Maybe repeating it enough will make it true? Next up will be that it only saves 20% so why bother.
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Originally posted by Vipz View PostI would say that I would be more attracted to a permanent role but contracting is the quicker option since not as many companies as taking on perm employees nowadays - so in that sense im not too bothered either way.
In regards to lunches, yes I do pay for lunch everyday.
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Originally posted by LisaContractorUmbrella View PostI don't think things were explained to you very well. What are you intending to do once this contract is up? Are you intending to return back to permanent work or do you intend to work on other contracts?
The calculations I provided did not take travel and subsistence costs into account as I am not sure yet that you would be entitled to claim those costs as expenses. If they were allowable then you would not be reimbursed for fuel costs, you would be able to claim a fixed amount of 45p per mile (for the first 10,000 miles in any financial year and 25p thereafter) which is determined by HMRC and is designed to cover fuel and wear and tear on the vehicle: http://www.hmrc.gov.uk/budget2011/tiin6310.pdf. With regard to meals - are you likely to be buying lunch every day? If you do buy lunch and it has been confirmed that you are travelling to a temporary location then you can claim the cost of the lunch whether it be £2 or £10 - the umbrella company you spoke to operate what are known as 'scale rates' which allow you £5 regardless of what you spend.
In regards to lunches, yes I do pay for lunch everyday.
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Originally posted by malvolio View PostYou're the contractor, Giant are merely a glorified book-keeping service. You find your own work.
When is an expense not an expense...? When the umbrella tells fibs...?
You can claim for food only if you are working long days (i.e. > 12 hours) or having unfeasibly early starts or staying away during the week. Otherwise the working assumption is you'd have to eat anyway, so how can it be a business expense?
Ditto mileage - the accepted rate is 45p per mile, dropping to 25p after 10k miles.
However this is far too simple for some umbrellas, they prefer to rack up the expense payments that they can offset against your taxes and so pay you more net income. They do this by having scale rates for expenses and dispensations saying they don't have to go through all the paperwork.
However, it's not the umbrella company that gets taken to court. You can only claim what you spend, you have to have receipts to cover the expense and the expense has to be wholly and entirely related to work. And you're not reclaiming the money anyway, all you're getting back is the tax on the money you spent out of your own pocket.
As a rule of thumb, if you make a profit on your expenses, directly or indirectly, someone is doing it wrong.
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Originally posted by Vipz View PostOk, so i understand the concept of how it works now, thanks a lot!
My follow up is lets say for example my current contract ends within a year, does that mean my next job will also have to go through Giant? Can I find my own job or do I have to undertake an assignment of their choosing?
Also in regards to the calculations you have provided, do they take into account my reimbursement for travel and food? The lady explained something like for every £15 I spend on fuel per 100 miles i would be reminbursed...?? Plus £5 a day for food allowance.
I only work from one office, I dont have a secondary location (unless the very occasional working from home counts???)...
I am two months in to a 12 month contract.
You can claim for food only if you are working long days (i.e. > 12 hours) or having unfeasibly early starts or staying away during the week. Otherwise the working assumption is you'd have to eat anyway, so how can it be a business expense?
Ditto mileage - the accepted rate is 45p per mile, dropping to 25p after 10k miles.
However this is far too simple for some umbrellas, they prefer to rack up the expense payments that they can offset against your taxes and so pay you more net income. They do this by having scale rates for expenses and dispensations saying they don't have to go through all the paperwork.
However, it's not the umbrella company that gets taken to court. You can only claim what you spend, you have to have receipts to cover the expense and the expense has to be wholly and entirely related to work. And you're not reclaiming the money anyway, all you're getting back is the tax on the money you spent out of your own pocket.
As a rule of thumb, if you make a profit on your expenses, directly or indirectly, someone is doing it wrong.
Leave a comment:
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Originally posted by Vipz View PostOk, so i understand the concept of how it works now, thanks a lot!
My follow up is lets say for example my current contract ends within a year, does that mean my next job will also have to go through Giant? Can I find my own job or do I have to undertake an assignment of their choosing?
Also in regards to the calculations you have provided, do they take into account my reimbursement for travel and food? The lady explained something like for every £15 I spend on fuel per 100 miles i would be reminbursed...?? Plus £5 a day for food allowance.
I only work from one office, I dont have a secondary location (unless the very occasional working from home counts???)...
I am two months in to a 12 month contract.
The calculations I provided did not take travel and subsistence costs into account as I am not sure yet that you would be entitled to claim those costs as expenses. If they were allowable then you would not be reimbursed for fuel costs, you would be able to claim a fixed amount of 45p per mile (for the first 10,000 miles in any financial year and 25p thereafter) which is determined by HMRC and is designed to cover fuel and wear and tear on the vehicle: http://www.hmrc.gov.uk/budget2011/tiin6310.pdf. With regard to meals - are you likely to be buying lunch every day? If you do buy lunch and it has been confirmed that you are travelling to a temporary location then you can claim the cost of the lunch whether it be £2 or £10 - the umbrella company you spoke to operate what are known as 'scale rates' which allow you £5 regardless of what you spend.
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Originally posted by LisaContractorUmbrella View PostWelcome
The first thing you should be aware of is that all umbrella companies should work in exactly the same way and the only difference in your take home pay with any of them will be down to their margin i.e. the amount they retain from the contract value for the work that they do.
Secondly, you should confirm with the recruitment agency whether or not they will be increasing your rate - an umbrella company certainly can't promise this. If your hourly rate does increase if you use an umbrella company then you may be better off but not necessarily. The umbrella company will enter into a business to business contract with the agency and will employ you under an over-arching contract of employment. The umbrella company will invoice the recruitment agency for the hours you have worked at the contract rate and the agency will then pay the umbrella company the value of that invoice. As they are an employer they will need to make payment to HMRC for thier Employer's National Insurance contributions and they will also retain their margin. The balance is your salary which is then subject to income tax and employee's national insurance which are deducted through PAYE.
At £14.20 per hour for a 37 hour week your gross pay will be £525.40 per week. If the contract rate was £16.14 per hour for 37 hours, the amount payable to the umbrella company would be £597.18. The umbrella company's margin will be around £30 per week and employer's national insurance is 13.8% for earnings above £148.00 per week (around £51 in this instance). This means that your salary would be £516.00. Therefore, if you have no entitlement to expenses you would actually be worse off than you are now.
With regard to expenses - costs for travel and subsistence can only be claimed if it is your intention to work on more than one assignment whilst in the employment of the umbrella company; a single assignment will automatically be regarded as a permanent workplace and travel and subsistence costs can only be claimed if you are travelling to a temporary workplace.
HTH
Ok, so i understand the concept of how it works now, thanks a lot!
My follow up is lets say for example my current contract ends within a year, does that mean my next job will also have to go through Giant? Can I find my own job or do I have to undertake an assignment of their choosing?
Also in regards to the calculations you have provided, do they take into account my reimbursement for travel and food? The lady explained something like for every £15 I spend on fuel per 100 miles i would be reminbursed...?? Plus £5 a day for food allowance.
I only work from one office, I dont have a secondary location (unless the very occasional working from home counts???)...
I am two months in to a 12 month contract.
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Originally posted by Craig at Nixon Williams View PostThe uplift in pay is to take account of Employers NI (14.20 x 1.138 = 16.15). This would be deducted by the umbrella before they make a payment to you so you wouldn't be better off once the umbrella takes their fee.
Craig
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Originally posted by Vipz View PostMy pay is currently £14.20ph but they reckon this would rise to £16.14ph?
Craig
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Originally posted by Vipz View PostI am currently working for a job agency and travel just under 170miles a week going to and from work.
I enquired with my agency if I could claim for travel and they said yes but I would have to go with an umbrella company - all new to me!
They have recommended Giant. Having spoke to a lady from Giant, she reckons I can take home a little extra money each week if i go with them.
My pay is currently £14.20ph but they reckon this would rise to £16.14ph?
Im totally confused and dont know if I can trust them or if I should just stick with my current agency.
they also said I can claim £5 a day for food.
Can anybody work out the maths for me and explain exactly how much better off I will be (or not be) if I go through Giant?
Also are there any people who have experience of Giant and how reliable they are?
I am just a single guy, living at home with my folks with a normal bank account, aged 32.
If you need any further information then please let me know...
Your help/Advice is greatly appreciated.
Regards,
Vip
The first thing you should be aware of is that all umbrella companies should work in exactly the same way and the only difference in your take home pay with any of them will be down to their margin i.e. the amount they retain from the contract value for the work that they do.
Secondly, you should confirm with the recruitment agency whether or not they will be increasing your rate - an umbrella company certainly can't promise this. If your hourly rate does increase if you use an umbrella company then you may be better off but not necessarily. The umbrella company will enter into a business to business contract with the agency and will employ you under an over-arching contract of employment. The umbrella company will invoice the recruitment agency for the hours you have worked at the contract rate and the agency will then pay the umbrella company the value of that invoice. As they are an employer they will need to make payment to HMRC for thier Employer's National Insurance contributions and they will also retain their margin. The balance is your salary which is then subject to income tax and employee's national insurance which are deducted through PAYE.
At £14.20 per hour for a 37 hour week your gross pay will be £525.40 per week. If the contract rate was £16.14 per hour for 37 hours, the amount payable to the umbrella company would be £597.18. The umbrella company's margin will be around £30 per week and employer's national insurance is 13.8% for earnings above £148.00 per week (around £51 in this instance). This means that your salary would be £516.00. Therefore, if you have no entitlement to expenses you would actually be worse off than you are now.
With regard to expenses - costs for travel and subsistence can only be claimed if it is your intention to work on more than one assignment whilst in the employment of the umbrella company; a single assignment will automatically be regarded as a permanent workplace and travel and subsistence costs can only be claimed if you are travelling to a temporary workplace.
HTH
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Umbrella Advice needed please
I am currently working for a job agency and travel just under 170miles a week going to and from work.
I enquired with my agency if I could claim for travel and they said yes but I would have to go with an umbrella company - all new to me!
They have recommended Giant. Having spoke to a lady from Giant, she reckons I can take home a little extra money each week if i go with them.
My pay is currently £14.20ph but they reckon this would rise to £16.14ph?
Im totally confused and dont know if I can trust them or if I should just stick with my current agency.
they also said I can claim £5 a day for food.
Can anybody work out the maths for me and explain exactly how much better off I will be (or not be) if I go through Giant?
Also are there any people who have experience of Giant and how reliable they are?
I am just a single guy, living at home with my folks with a normal bank account, aged 32.
If you need any further information then please let me know...
Your help/Advice is greatly appreciated.
Regards,
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