Umbrella offering expenses?!

[northernladuk]

Following on from the workshop I attended on Friday - I actually think Parasol are right and can allow hardware purchases for the purposes of the project.

The devil is in the detail but it is clear that materials used for the project can be deducted before deemed payments are made and that must equally apply to umbrella firms.

Now it wouldn't surprise me if HMRC tried to reject the claim and took it to court and it may seem completely strange it also makes sense given the actual rules and making the assumption that

1) the hardware is for that project (so computer, phone, iPad fine - washing machine probably not).
2) the hardware is disposed of (via reselling) at the end of the project.

The fact the hardware ends up in the workers hands at a lower price doesn't seem to have occurred to HMRC...

I'm not sure that a 3 month old iphone is worth just 15% of the original purchase price though - and VAT handling would be a very interesting thing to investigate.

Buy new laptop through LTD, sell it back to contractor at start of an inside gig, sell back to LTD at end of gig. Start new gig, buy it back from LTD and so on.
If you can't be bothered with that the LTD leases it to contractor for each gig.

Could be a nice little money spinner that.

[eek]

Buy new laptop through LTD, sell it back to contractor at start of an inside gig, sell back to LTD at end of gig. Start new gig, buy it back from LTD and so on.
If you can't be bothered with that the LTD leases it to contractor for each gig.

Could be a nice little money spinner that.

It doesn't work like that

The approach is - buy laptop from Currys with money deducted from first pay pocket.

Asset is owned by umbrella

On completion of project the materials are then disposed of (i.e. sold to the worker who wanted them in the first place).

Anyone who is used to purchase vouchers from perkbox and co will know why Currys is in the picture here.

[northernladuk]

It doesn't work like that

The approach is - buy laptop from Currys with money deducted from first pay pocket.

Asset is owned by umbrella

On completion of project the materials are then disposed of (i.e. sold to the worker who wanted them in the first place).

Anyone who is used to purchase vouchers from perkbox and co will know why Currys is in the picture here.

Bah Back to having to work for a living.

[hobnob]

I'm not sure that a 3 month old iphone is worth just 15% of the original purchase price though

Yeah, that reminds me of the cycle to work scheme. Companies can sell bikes to employees at the end of the rental period, and in the early days it was standard to charge 5% of the original purchase price. Then HMRC said that was unrealistic, as per the valuation table on this page:
EIM21667A - Employment Income Manual - HMRC internal manual - GOV.UK (www.gov.uk)

If the rental scheme lasted for a year, then the acceptable disposal value is 18% (for a bike that cost less than £500) or 25% (for a bike that cost £500 or more). That means the company either has to sell the bike for that much, or they can sell it for less and treat the saving as a BIK.

I suspect that a similar thing will happen for iPhones etc.

[northernladuk]

I suspect that a similar thing will happen for iPhones etc.

Phones have been an accepted exception for many years and are integral to work, LTD, self employed or perm so I don't think they'll change at all. Virtually everyone on earth has one now and are not a business benefit now.

And I think you mean just 'phones' and not iphones.

[psychocandy]

Looking for a new brolly now and noticed a lot of them are still saying "you might be able to get travelling expenses".

Having been on an inside role for the last 4 years this is news to me....

But reading the above, if its deemed inside by the client then no expenses anyway. I don't get it - if it was outside I wouldnt be using a brolly in the first place!

[eek]

Looking for a new brolly now and noticed a lot of them are still saying "you might be able to get travelling expenses".

Having been on an inside role for the last 4 years this is news to me....

But reading the above, if its deemed inside by the client then no expenses anyway. I don't get it - if it was outside I wouldnt be using a brolly in the first place!

It's another f***ing scam and depends on a reading of HMRC expenses policy which doesn't reflect my personal opinion, nor that of the people in HMRC who deal with expenses (when I checked how accurate my opinion was).

[SimonMac]

Looking for a new brolly now and noticed a lot of them are still saying "you might be able to get travelling expenses".

Having been on an inside role for the last 4 years this is news to me....

But reading the above, if its deemed inside by the client then no expenses anyway. I don't get it - if it was outside I wouldnt be using a brolly in the first place!

[northernladuk]

Looking for a new brolly now and noticed a lot of them are still saying "you might be able to get travelling expenses".

Having been on an inside role for the last 4 years this is news to me....

But reading the above, if its deemed inside by the client then no expenses anyway. I don't get it - if it was outside I wouldnt be using a brolly in the first place!

You might not but there are situations where an outside gig might be run through a brolly. People that can't set up a LTD, single engagement where LTD isn't worthwhile, someone that's MVL'd and can't use a LTD for the next two years etc.

I see Eek's comment and I am afraid to ask but I will. Isn't there certain situations linked to SDC where expenses 'might' be possible and all the umbrella are doing are using the possibility in rare circumstances as an excuse to be very liberal with their sales pitch? Is it not true a few people 'might' be able to claim it but it's misleading to use it in general documentation/sales pitches?

[eek]

You might not but there are situations where an outside gig might be run through a brolly. People that can't set up a LTD, single engagement where LTD isn't worthwhile, someone that's MVL'd and can't use a LTD for the next two years etc.

I see Eek's comment and I am afraid to ask but I will. Isn't there certain situations linked to SDC where expenses 'might' be possible and all the umbrella are doing are using the possibility in rare circumstances as an excuse to be very liberal with their sales pitch? Is it not true a few people 'might' be able to claim it but it's misleading to use it in general documentation/sales pitches?

Yep - if the contract is outside IR35 and you are not subject to SDC and wish to use an umbrella then you could claim expenses.

However, the umbrellas that push expenses don't use the outside distinction and have a questionnaire that is surprisingly easy to pass given the hints they provide...

Sane umbrellas won't touch the idea with a barge-pole as HMRC investigations aren't fun and will result in a large cost even if you are 100% in the right.