Non reimbursed expenses and self assessment

[vwdan]

Must admit, I'm still more ignorant than I'd like to the Umbrella Company world.

Anyway, every now and again I travel to London to see my client - they don't/won't pay for it, and I basically do it as a gesture of goodwill and take the hit. But I noticed going through FreeAgent Self Assessment that it asks me about expenses incurred including travel. (Box 17)

What's the deal here, can I include my travel expenses? What's the catch, it feels a bit too good to be true.

[malvolio]

How long have you been contracting? Anyway...

You can claim the tax back on (some, not all) expenses incurred for completely business reasons. So, where is your normal place of work and where is your client's normal place of work? If they are not the same, and you don't go there every day or even routinely, the travel cost is reclaimable. It's commuting that is non-claimable and it doesn't sound like that in this case, so mileage, train fare and parking are allowable.

Your umbrella should know this, so why not ask them how to claim it. If they don't then get one that does...

[vwdan]

How long have you been contracting?

Over a decade, but exclusively via Ltd Co until recently, so I have no idea what you think this snide remark proves.

You can claim the tax back on (some, not all) expenses incurred for completely business reasons. So, where is your normal place of work and where is your client's normal place of work? If they are not the same, and you don't go there every day or even routinely, the travel cost is reclaimable. It's commuting that is non-claimable and it doesn't sound like that in this case, so mileage, train fare and parking are allowable.

Thank you - yes, I'm permanent work from home both contractually and in reality. We just have very occasional, ad-hoc team meetings/lunches and stuff at HQ as an excuse to do the face to face thing

Your umbrella should know this, so why not ask them how to claim it.

As I say, because I knew the expense wasn't reimbursable I just took it on the chin and never approach the brolly as I know, broadly, most expenses that I'm used to from a Ltd Co perspective are not valid anymore. Now I've got some more info, I'll approach them. Though I've always preferred to have the knowledge first, then approach for clarity than rely on companies to educate me and rely on them to be right.

[northernladuk]

I was digging around in this area but my contract does stipulate a day in the office a week. As it happens no one is doing it so I'm going to challenge that next renewal and see if we can do it on a memoranding of understanding instead so I'll fall in to the same camp as you but.....

First on my mind is that Eek mentioned as a vast majority of umbrella contracts won't allow expenses, when they start cropping up they'll come under scrutiny and need to be water tight. This has put me off trying to be too fancy and killed off most of my investigation. Not sure how true this is and what the risk is yet though. I can imagine that the number of people claiming tax back for this compared to the number of people on PAYE not doing it will be miniscule so maybe it stands out like a sore thumb? I'd need to speak to more people to understand this bit.

Secondly it's a grey area and has to be water tight. If there is any mention of attending site for the odd meeting/team event then it's an expectation, however infrequent and would be disallowed. If there is a meeting/group even and you are asked to come you must have the ability to say no otherwise an expectation exists. You'd have to have it in black and white 100% remote with zero evidence of any agreement to attend site. How they would know if it's in a email, chat or phone call I don't know. That's the grey area. Might be worth getting an email from your client where you discuss/agree that your travel to site is not required but you are welcome to do it if you require or something to be sure.

If it is purely driven by you and is not expected or required then I can't see a problem. It's just a very unusual situation that is going to naturally invite some questions as it's so uncommon (going back to Eek's point).

I also don't know if putting it in, getting pulled up, pointing out it's a grey area, apologising and not doing it again is going to work either. I've a feeling the tax man doesn't work like that.

[malvolio]

Over a decade, but exclusively via Ltd Co until recently, so I have no idea what you think this snide remark proves.

Not snide at all. Merely a comment on being a full time contractor but not having a clue about what is a basic aspect of taxation vs expenses - which would have applied to your Ltd Co days as well. The rules are the same for all salaried work regardless of employment status.

[vwdan]

Not snide at all. Merely a comment on being a full time contractor but not having a clue about what is a basic aspect of taxation vs expenses - which would have applied to your Ltd Co days as well. The rules are the same for all salaried work regardless of employment status.

It was snide and....what? I'm not sure if you even understood my question now. What Ltd Co director needs to offset unpaid expenses via their Self Assessment? Why would that even come up? I know it comes up occasionally for permies in the context of mileage payments and things, but I think that's pretty rare too - in years of permie consultancy I certainly never put my hand in my own pocket with the expectation I'd deal with it as SA time.

And the rules aren't identical, in fact they appear to be nothing alike

[eek]

Not snide at all. Merely a comment on being a full time contractor but not having a clue about what is a basic aspect of taxation vs expenses - which would have applied to your Ltd Co days as well. The rules are the same for all salaried work regardless of employment status.

malvolio I will be blunt here you don’t have a clue what you are talking about so stop posting on umbrella topics because you don’t understand the current situation

[eek]

I will post a more complete answer later but basically if you go to 1 site once in a while that’s going to be your base office and therefore expenses won’t be tax deductible - anything you get would have to be treated as just another payment on which tax needs to be deducted

[eek]

Right slightly more time now - so I reply with links

The issue comes down to how home working works for PERMANENT employees which is

https://brodies.com/insights/employm...o-homeworkers/ has the important bits

The HMRC rules on this are complex and centre on the definitions of 'permanent workplace' and 'temporary workplace':

• A permanent workplace is somewhere the employee attends regularly for the performance of their duties. Attendance is regular if it is frequent or follows a pattern, so that fortnightly travel, for example, is capable of being regarded as regular.
• A temporary workplace is somewhere the employee goes only to perform a task of limited duration or for a temporary purpose. Where an employee has spent, or is likely to spend, 40% or more of their working time at a particular workplace over a period of more than 24 months, HMRC will treat it as a permanent workplace rather than a temporary workplace.

If an employee works from home full-time, they can get tax relief on the unreimbursed travel costs of travelling to the office - provided that the trip is not undertaken regularly and HMRC accepts that the office is a temporary workplace. They can also get relief on the costs of travelling to another temporary workplace such as a client's premises.

So provided you can demonstrate that the visits were "random" I don't see the issue.

[vwdan]

eek Awesome, thank you very much and appreciate the link.

Yeah, it's definitely random - just every now and again it's nice to grab a team lunch, I don't even have a card which works in that office or anything.