Just received this from our contact at HMRC

[Cirrus]

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.

Sorry - no idea what you're getting at. Anybody else understand this?

[northernladuk]

Sorry - no idea what you're getting at. Anybody else understand this?

I think he is talking about a gig where the client pays for travel and expenses so the contractor can invoice the client. He's either negotiated the client pays his normal expenses or he's talking about the client sending him to other sites. If he isn't I'm lost as well.

[webberg]

I confess I don't really understand the description.

If your services are being offered via a company to a client, then the company raises an invoice on the client. The client cares not whether that is 10% expenses and 90% hours based. The client claims relief for everything paid.

The Ltd company may regard the entire invoice as income or perhaps treats the expense part as not income on the grounds that it will pass this on to the individual?

If the entire invoice is income, then the Ltd can claim relief for reimbursing the individual expense. If it's not treated as income, I suspect there can be no deduction.

The limited may have an agreement with HMRC that the reimbursement is tax free and not reportable. If so, no further action required.

If not, the Ltd should disclose the payment of the expense (P11D perhaps although some expenses are subject to PAYE) and the individual then makes a claim on his/her return.

In this instance the "necessarily" words in the law are interpreted very strictly.

In particular if you have a number of workplaces you attend, then the concept of "outside reasonable commuting distance" is a non starter.

[colinrobinson]

I think he is talking about a gig where the client pays for travel and expenses so the contractor can invoice the client. He's either negotiated the client pays his normal expenses or he's talking about the client sending him to other sites. If he isn't I'm lost as well.

I was trying to suggest it would be advantageous to negotiate client Pays normal expenses rather than a flat daily rate.

But dec 9th and clarity is just round the corner

[MrMarkyMark]

But dec 9th and clarity is just round the corner

Indeed, hopefully it will be a lot clearer than you have been

[jamesbrown]

But dec 9th and clarity is just round the corner

Good luck with that There will be some additional clarity, but probably only w/r to the test used for brollies (SDC), and this has already been clarified post-AS. With HMG, there is never clarity, only degrees of obscurity.

There seems to be an awful lot of confusion about what these T&S proposals relate to. Without wishing to sound patronising, I think some folks need to go back and read the actual T&S consultation as it relates to the removal of tax relief on home to work travel, subject to conditions. There is no intention to remove reliefs from contractors that are already available to employees (having a level playing field with consultancies is another matter). Furthermore, a lot of this discussion is completely unrelated to tax relief. If you can bill your client for expenses or 10x expenses (FWIW, that's what I do, although not 10x ), why wouldn't you do that already? This is a contractual matter.

[ASB]

I was trying to suggest it would be advantageous to negotiate client Pays normal expenses rather than a flat daily rate.

But dec 9th and clarity is just round the corner

So bill client 400 quid and receive a brown envelope containing (say) 40 quid cash.

This is still personal income and needs declaring on the SATR (ok you stuff in a claim that it is expenses thus contraing it off to zero which may or may not be a valid claim). The time this wouldn't happen is if it is covered by a dispensation. But it can't be since you are not the clients employee.

Of course the client can legitimately pay you the expenses. But it has an impact on your companies end of year returns. You will need to answer yes to "did anybody else pay any of your employees anything". It would be difficult to legitimately answer that as "no".

It's not going to magically make something claimable that wasn't before. Just add a bit of abstraction.

[cityben]

Anybody know what time we can expect this draft document being released?

Also....as its a draft does that mean we still won't know for certain until a final document is released? Anybody know when that date will be?

[mudskipper]

The draft finance bill, which will include the T&S changes (SDC test for brolly users) is today.

I don't believe we have a date for the IR35 consultation document - I think the expectation is "soon".

[jamesbrown]

Should be some time this morning, but I can't see anything yet. They may push out the IR35 consultation too. Bear in mind it will take some time to trawl through and process, with a lot of changes that are potentially relevant to contractors (dividend tax, T&S relief, lifetime allowance for pensions, GAAR penalties, various measures for BTL, savings allowance, rabbits from hats - hopefully none ).