Originally posted by Wanderer
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Umbrella companies 'expenses policy' changed
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Originally posted by LisaContractorUmbrella View PostIt is the 'additional cost' element that is important here - basically if you buy and M&S sandwich every day for lunch and do exactly the same when travelling to a temporary workplace the costs will not be allowable but if you go home to eat lunch everyday but have to buy lunch when at a temporary location this is an additional cost and therefore allowableLeave a comment:
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Originally posted by Wanderer View PostImagine an employer has a scale rate dispensation from HMRC to allow £10 for lunch. Now lets say an employee is travelling to a temporary work place and incurs a cost of £2 on lunch with a receipt to prove the expense was incurred.
Can the employer reimburse the employee a flat rate of £10 on expenses as per the scale rate dispensation OR would they pay them £2 and the other £8 would be treated as BIK and subject to PAYE/NI?
My reading of the rules is that so long as there is an additional cost incurred (however small or large is irrelevant), the employee could claim the £10 specified in the scale rate dispensation .
The time they could not claim is if they didn't actually incur any extra expense, eg, they took a packed lunch from home or they didn't buy anything at all.Leave a comment:
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Originally posted by LisaContractorUmbrella View PostAlmost all umbrella companies have a dispensation and some have scale rate dispensations. A scale rate dispensation allows a fixed amount to be claimed for subsistence when a worker is at a temporary location BUT the rules surrounding expenses still apply so there still has to be an additional cost to the individual and if you don't spend anything you can't claim anything.
Can the employer reimburse the employee a flat rate of £10 on expenses as per the scale rate dispensation OR would they pay them £2 and the other £8 would be treated as BIK and subject to PAYE/NI?
My reading of the rules is that so long as there is an additional cost incurred (however small or large is irrelevant), the employee could claim the £10 specified in the scale rate dispensation .
The time they could not claim is if they didn't actually incur any extra expense, eg, they took a packed lunch from home or they didn't buy anything at all.Leave a comment:
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Originally posted by Wanderer View PostWoops. So which umbrella companies lost their scale rate dispensations then?
What's the impact of this, do workers now have to supply receipts for their subsistence claims rather than just keeping the receipts in case they were audited?
Yep workers would now only be able to claim for the costs they actually incurred rather than a fixed daily amountLeave a comment:
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I move it and make it a sticky (there are enough stickies in this forum).Leave a comment:
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Originally posted by LisaContractorUmbrella View PostIt seems as though some contractors think they are 'losing money' as their umbrella company is no longer allowing scale rate payments (as they are processed as a tax benefit,this would have the result of reducing take home pay) - the likely reason for this is that the scale rate dispensation has been withdrawn which means that HMR&C are not happy with the way that the umbrella company is dealing with expense claims.
What's the impact of this, do workers now have to supply receipts for their subsistence claims rather than just keeping the receipts in case they were audited?Leave a comment:
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But good general advice considering the ones that don't use search/go to the correct sectionLeave a comment:
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