New Brolly tax regime

[CoolCat]

OK so I know that now the brolly is not able to reimburse expenses for travel, hotels, etc in the way that they could in previous tax years.

Can such expenses still be declared on the contractors tax return? ie if your brolly says your contractually based at home and you travel, stay away, etc for client can you stick those expenses on your tax return and claim back the income tax on those amounts?

I suppose there is an impact that you are paying national insurance on the amount expensed?

Any other net issues other than not getting the tax refund money until the tax return is processed?

[SueEllen]

Can a permanent employee do this?

[eek]

OK so I know that now the brolly is not able to reimburse expenses for travel, hotels, etc in the way that they could in previous tax years.

Can such expenses still be declared on the contractors tax return? ie if your brolly says your contractually based at home and you travel, stay away, etc for client can you stick those expenses on your tax return and claim back the income tax on those amounts?

I suppose there is an impact that you are paying national insurance on the amount expensed?

Any other net issues other than not getting the tax refund money until the tax return is processed?

You can only claim the expenses you would be able to claim were you a permanent employee of the company you are currently working for.

From that work out what you can claim (sadly it probably isn't much).

[CoolCat]

Can a permanent employee do this?

Well as a perm employee of one of the big SI companies, or consultancies, they are often contractually based "at home" and so every time they leave the house to visit a client they can expense it. Its pretty routine for customer facing staff. I don't see why it should be any different for a brolly employee.

[eek]

Well as a perm employee of one of the big SI companies, or consultancies, they are often contractually based "at home" and so every time they leave the house to visit a client they can expense it. Its pretty routine for customer facing staff. I don't see why it should be any different for a brolly employee.

It is because that argument was lost before we even began. The issue is that the brolly is not your end employer and the argument is that when you look through the brolly to the end client you have been employed by your end client.

The logic is simple:-

When I worked for a consultancy the end client had little choice but to accept me when I turned up to do the work. When you work for an end client, the client picked you from a number of options....

The interesting scenario may appear to be where you are working via a consultancy but the same logic applies. As you have been brought in by the consultancy for a single project at a single site HMRC believe you should be treated as if you were permanent employee for the end client.

And yes I know this is not what you want to hear - its just the way things have been drafted - if you want expenses use a limited company which means your permanent base is where you live not based on your current contract.

[SueEllen]

Well as a perm employee of one of the big SI companies, or consultancies, they are often contractually based "at home" and so every time they leave the house to visit a client they can expense it. Its pretty routine for customer facing staff. I don't see why it should be any different for a brolly employee.

It maybe for sales staff but for technologists who are at one site for a particular project that site can end up being their permanent workplace regardless of whether it is a client site or not.

One consultancy I worked with had an agreement with HMRC that any travel expenses involving a client based zone 1 in London could not be claimed for. So staff particularly those not based in the SE would try not to get such a client unless they planned on using the name to move jobs.

[CoolCat]

It maybe for sales staff but for technologists who are at one site for a particular project that site can end up being their permanent workplace regardless of whether it is a client site or not.

One consultancy I worked with had an agreement with HMRC that any travel expenses involving a client based zone 1 in London could not be claimed for. So staff particularly those not based in the SE would try not to get such a client unless they planned on using the name to move jobs.

the rules are nonsense.

and BTW end clients do often pick and choose people from the SI or consultancy to work on their engagement, they very definitely can do that, so that distinction is nonsense

seems the politicians just want to make it as complicated as possible to work freelance

[LondonManc]

It is because that argument was lost before we even began. The issue is that the brolly is not your end employer and the argument is that when you look through the brolly to the end client you have been employed by your end client.

The logic is simple:-

When I worked for a consultancy the end client had little choice but to accept me when I turned up to do the work. When you work for an end client, the client picked you from a number of options....

The interesting scenario may appear to be where you are working via a consultancy but the same logic applies. As you have been brought in by the consultancy for a single project at a single site HMRC believe you should be treated as if you were permanent employee for the end client.

And yes I know this is not what you want to hear - its just the way things have been drafted - if you want expenses use a limited company which means your permanent base is where you live not based on your current contract.

Or, negotiate the expenses with the client company - consultancies can often do this because they have special rates or may want you in the same hotel as their other consultants so that you can carry on discussing work over a beer or two (subconscious working).

[DotasScandal]

Seems the politicians just want to make it as complicated as possible to work freelance

You're on the right track.
Less freelancers = more space for the big consultancies = more yummy kickbacks.

[lucyclarityumbrella]

OK so I know that now the brolly is not able to reimburse expenses for travel, hotels, etc in the way that they could in previous tax years.

Can such expenses still be declared on the contractors tax return? ie if your brolly says your contractually based at home and you travel, stay away, etc for client can you stick those expenses on your tax return and claim back the income tax on those amounts?

I suppose there is an impact that you are paying national insurance on the amount expensed?

Any other net issues other than not getting the tax refund money until the tax return is processed?

Hi CoolCat
The only thing you need to look at is the Supervision, Direction and Control element of the Travel & Subsistence Legislation. This is what dictates whether you are able to reclaim via self-assessment at the end of the financial year. You will have to contact HMRC to get them to ascertain whether they perceive you are under SDC as the guidance is somewhat airy-fairy! We have advised our contractors to get in touch with the revenue with their contract of employment and their job specification to get them to declare your status. If they deem you are under SDC or the right thereof then you will not be able to claim the tax relief at all - sorry!