Umbrella company in public sector
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    Default Umbrella company in public sector

    Hi,

    Work for a government energy regulator on a temporary 6 month contract - first time contracting by the way!

    I had to either go down PAYE or Umbrella so chose Umbrella as the hourly rate was much more attractive.

    I could only select one of 3 Umbrellas from the agencies PSL so after deliberation - I did.

    Thing is, I am aware of the changes to all the Tax rules e.t.c. but I live in Scotland and travel to my temporary assignment in the south of England and have temporary lodgings through the week before returning home at the weekends. With my role as a consultant I passed the SDC checks on all 3 Umbrella companies and told by each of them that I was entitled to claim expenses i.e. mileage and lodgings. But reading all the information in the forum and including the previous thread I put in a different section - I shouldn't be claiming these?

    I broached another sanity call to the umbrella company as well as 3rd party advice on the rules and regs for claiming expenses and was told that these were definitely claimable as the expenses go through an approval system each week on top of the already checked SDC questionnaire. They sent me this link ps://www.gov.uk/tax-relief-for-employees/travel-and-overnight-expenses and also an email in writing that if HMRC were to audit and find my expenses non-claimable they would liable to pay back any of the tax relief I currently get, so I have this in writing too as they have both told me from the outset and also approved them each week (now on week 2).

    Am I wrong or right???????

    Would like some feedback please - appreciate any advice to ensure full compliance.

    Any other contractors out there on umbrellas claiming expenses that have passed SDC checks? it is a big massive grey area to me?!?

    Thanks

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    It's not grey at all. If you are employed by an umbrella, your normal workplace is your permanent place of work so commuting and subsistence costs aren't allowable. Go to another workplace for that client for a short term piece of work and they may be, but not your normal place of work.

    If you're designated as inside IR35, SDC doesn't really come into it afaik.
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    But the second paragraph of that link clearly states.

    You canít claim for travelling to where you work, unless itís a temporary place of work

    This is exactly what you will be doing so pretty black and white.

    A good guide on this is on the Contractor Umbrella site here.

    http://www.contractorumbrella.com/ne...pril_2016.html
    Last edited by northernladuk; 28th September 2017 at 16:19.
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    It does appear to be possible in very rare cases to pass SDC but looking at the guidance it's very difficult to see how. We don't know your circumstances and what test the umbrella carried out but I'd be very surprised if they know enough about the role for it to be worth more than the paper it's written on.

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    If you were willing to name one or all of the brollies we could probably be able to tell you more.
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    You mention your client is a public sector body, so just to clarify and this is words from our contact at HMRC (so irrelevant of any so-called SDC Test):

    "I think it most likely that someone would be subject to SDC if they are deemed to be within IR35 or the new Chapter 10 for off-payrolling in the public sector. I suppose that it is possible, that this is not the case, but highly unlikely."

    Pretty much a conclusion in my eyes!
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    Hi - thanks so much for the advice but it is a temporary contract? i only have 6 months from the end client through agency to brolly.

    I keep hearing that i can claim but through self assessment at the end of the tax year rather than weekly pay.

    Quote Originally Posted by lucycontractorumbrella View Post
    You mention your client is a public sector body, so just to clarify and this is words from our contact at HMRC (so irrelevant of any so-called SDC Test):

    "I think it most likely that someone would be subject to SDC if they are deemed to be within IR35 or the new Chapter 10 for off-payrolling in the public sector. I suppose that it is possible, that this is not the case, but highly unlikely."

    Pretty much a conclusion in my eyes!

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    Quote Originally Posted by Wullie36 View Post
    I keep hearing that i can claim but through self assessment at the end of the tax year rather than weekly pay.
    I would honestly say you can probably forget the self-assessment route to reclaim it if you are Public Sector. If you want to be 100% sure, take your job spec, and contractor of employment with the umbrella, and ask HMRC to determine your status. We have had some contractors that have been able to ascertain their status this way... at the end of the day, they are the only people who will be able to give you a concrete answer.

    Gut feeling (as per previous message from HMRC) is that if you are inside IR35 for the assignment, then you are being treated as an employee, in which case you would be highly unlikely to be declared not under SDC by HMRC.
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    If you are not subject to SDC and are therefore able to claim expenses for travel and subsistence it might be an idea for you to use the ESS tool to assess what would be your status under IR35.

    If this comes back as your being outside IR35 then you could ask the end client for information on how they assessed the status of the contract in the first place.

    If you are not subject to SDC then that may indicate a lower risk of IR35, or an outside IR35 position.

    If the contract is outside IR35 then it might be worth considering operating through a PSC.

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    Still gathering requirements...


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    Quote Originally Posted by Patrick@Intouch View Post
    If you are not subject to SDC and are therefore able to claim expenses for travel and subsistence it might be an idea for you to use the ESS tool to assess what would be your status under IR35.

    If this comes back as your being outside IR35 then you could ask the end client for information on how they assessed the status of the contract in the first place.

    If you are not subject to SDC then that may indicate a lower risk of IR35, or an outside IR35 position.

    If the contract is outside IR35 then it might be worth considering operating through a PSC.
    All very nice theory but platting fog would be easier.

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