Umbrella company problem with expenses (+£25K owed)

[lucyclarityumbrella]

Bearing in mind the umbrella is/was your employer have you called them to go through the situation in detail. Surely that is your first port of call? When you have the exact facts and their take on the situation you can start looking at options.

The mileage rate is 45p per mile for the first 10,000 miles that you could have been gaining the tax relief on, I say could on the basis of what has been said before, this would only apply if it was the temporary workplace, ie the multiple assignments. However dependant on your contract rate you would need to look at the amount of expenses they were allowing you to put through, if these were excessively high they could have been putting you at risk of being under national minimum wage after deductions. If you want to PM me I can see if I can offer you any advice.

[International Adviser]

Blame Game

I can't see where the brolly is at fault here, the error is entirely yours.

Imagine if you'd been underpaid, would you feel the same?

The true position is that in one hand you have been paid expenses in excess of the amounts incurred, whilst on the other had you have sacrificed part of the rate to compensate the Umbrella Company.

In reality the Umbrella Company are only after setting their accounts straight and getting money from you to settle the Employment Taxes that would have been due if the expenses had been paid out as extra wages.

So you owe then £25,000 on which they will deduct 13.8% Employers NI and 42% to cover Income Tax and Employees NI. So they will pay you £12,742.

So the net cost to you is circa £12,200.

Don't think you can litigate as you don't pay them to process and verify your expenses and clearly the problem with on-line portals is that there is no third party verification. Although if they have a dispensation they should be vetting expenses and making sure that all are valid.

[LisaContractorUmbrella]

The umbrella company should have verified the expenses - we have an online portal but claims are still manually checked - a claim of 500 miles per day should have been picked up purely because it wouldn't be possible to do that sort of mileage and then do a day's work

[International Adviser]

The umbrella company should have verified the expenses - we have an online portal but claims are still manually checked - a claim of 500 miles per day should have been picked up purely because it wouldn't be possible to do that sort of mileage and then do a day's work

That's the right way to do it. Unfortunately, it seems that this poor chap believed that there was a watchful eye keeping him safe, only to find out that it was a computer programme that said yes or no, or just said yes to everything.

[LisaContractorUmbrella]

That's the right way to do it. Unfortunately, it seems that this poor chap believed that there was a watchful eye keeping him safe, only to find out that it was a computer programme that said yes or no, or just said yes to everything.

Yes indeed - picking the right umbrella company is important