Just received this from our contact at HMRC

[MarkT]

Yep that's the new D Day - we should know then how all of this is going to work in practice - until then it's all guesswork

What a lovely Xmas we will all have...

[MarkT]

will be effected when they are under supervision, direction or control in the manner they carry out their work.

That OR is a big OR, and not an AND.

Worrying.

[LisaContractorUmbrella]

What a lovely Xmas we will all have...

Worrying is like riding a rocking horse - it will give you something to do but it won't get you anywhere

[MarkT]

In the being sneaky department of HMRC within their email response to my consultation letter.

Worrying is like riding a rocking horse - it will give you something to do but it won't get you anywhere

That depends on what is said next Wednesday. I'd like a month without a D Day in it, just one!

[colinrobinson]

Work related expenses Finance act 2015

Except you would still be liable for tax & NI on the BiK. It doesn't matter who pays the expense (and it's always been this way).



Exactly.

Really what about this from the 2015 finance act:

Following a review of benefits in kind by the Office of Tax Simplification, a package of four measures was announced by HM Treasury. The proposals were as follows.

Abolition of the threshold for the taxation of benefits in kind for employees who earn at a rate of less than £8,500 a year.
A statutory exemption for trivial benefits.
A system of collecting income tax in real time through the “payrolling” of benefits in kind.
Replacement of the expenses dispensation regime with an exemption for paid and reimbursed expenses.
The second of those measures – the introduction of an exemption for trivial benefits – has been deferred to a future Finance Bill, but the others were included in FA 2015. Although the abolition of the £8,500 threshold was implemented in that act, it will not come into force until 6 April 2016, after which all benefits will be taxable regardless of the employee’s total earnings (FA 2015 Part 1 Ch 2 s 12 to s 13).

At present, employees who are reimbursed work-related expenses are not liable to tax on them if they claim a deduction in their tax return or by writing to HMRC. FA 2015 restructured this, so that qualifying business expenses that are reimbursed to employees will be exempt from tax.

Generally, the employer will not need to report the expenses on form P11D, nor will the employer need to claim a dispensation from reporting expenses. Again, this change (FA 2015 Ch 2 s 11) comes into force on 6 April 2016. It is anticipated that this will save employers, their advisers and HMRC time and money in administration costs. This is a positive change.

[Contreras]

At present, employees who are reimbursed work-related expenses are not liable to tax on them if they claim a deduction in their tax return or by writing to HMRC. FA 2015 restructured this, so that qualifying business expenses that are reimbursed to employees will be exempt from tax.

I take this to mean simply that the zero-sum bureaucracy of P11D expenses is to be abolished.

It would NOT affect what is and is not a "qualifying business expenses".

[colinrobinson]

Work related expenses Finance act 2015

I take this to mean simply that the zero-sum bureaucracy of P11D expenses is to be abolished.

It would NOT affect what is and is not a "qualifying business expenses".

qualifying business expenses is in my opinion clear and is understood to be be wholly for the purpose of the business. Hotel stays outside reasonable commuting distance to perform a contract clearly meets the requirement.

so if we bill the client for actual expense of staying on business, as employees we are eligible to claim the cost and that re-imbusement is exempt from tax. So if this remains unchanged in the 2016 bill umbrella employees charging expenses should be exempt from tax on those expenses.

it would be interesting to know what Lisacontractorumbrella has to say on this point.

[Contreras]

so if we bill the client for actual expense of staying on business, as employees ...

I'm sorry, you lost me right there.

[SueEllen]

qualifying business expenses is in my opinion clear and is understood to be be wholly for the purpose of the business. Hotel stays outside reasonable commuting distance to perform a contract clearly meets the requirement.

so if we bill the client for actual expense of staying on business, as employees we are eligible to claim the cost and that re-imbusement is exempt from tax. So if this remains unchanged in the 2016 bill umbrella employees charging expenses should be exempt from tax on those expenses.

it would be interesting to know what Lisacontractorumbrella has to say on this point.

We aren't the client's employees though so why should they reimburse our expenses?

[colinrobinson]

We aren't the client's employees though so why should they reimburse our expenses?

we are free to bill in any way that we decide, by separating our hours from our expenses we are then able to treat each invoice differently. the end client can treat our expenses invoices as travel and subsistence (with tax relief). it can re-imburse either our ltd or our umbrella. in either case we are employees (as a director or an umbrella paye). then as an employee of either in receipt of reimbursed expenses they are exempt. and our invoices for hours are taxable as normal without the expenses element.

Until dec 9th though when it can all change with the 2016 finance act