Originally posted by northernladuk
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hire car expense claiming
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Originally posted by arby View PostI work for a client who occasionally asks me to attend meetings at one of his facilities 125 miles away. Their expense policy is to only permit personal vehicle use for journeys less than 80 miles round-trip and to use a hire car for anything longer. So I hire a car through their arrangement with Avis on my personal credit card and then submit an expense claim to my agency which as been signed by a director within the client's management team. The agency pays my umbrella company the values ex VAT and the umbrella company treats this like my weekly salary so I claim the same expenses to the umbrella company to recover the VAT and tax and NI. This has worked fine 5 or 6 times since my contract started in April.
However, with my most recent hire car claim they have only paid 5/7s of the hire car and fuel value as they're saying that's all HMRC will allow as it's been less than 45 days since my last car hire. What on earth is this about? Any insight would be appreciated.
With regard to the 45 days - all I can find is that tax treatment changes once a hire of a car exceeds 45 days but I don't know of any rule which states you cannot hire a vehicle twice within 45 days. If you have hired the car for 7 days but only used it for business travel for 5 days then you would only be entitled to tax relief on 5/7th's of the associated costs.
HTHComment
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Originally posted by northernladuk View PostIt doesn't to me. He hasn't hired it for a week from what I can see and they are saying the 5/7ths are to do with the less than 45 days which is a different rule and incorrect. They seem to have taken business use only, thrown in a soupçon of car hire rules, mixed it in to a mess and then served it cold to the OP. Bit of mess that one... Unless I have missed something which is highly likely. Mistress LisaContractorUmbrella will be along shortly to tell me I need some correction.Comment
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Originally posted by LisaContractorUmbrella View PostThe first thing I would say is that, if I understand what you have said correctly, the way that the expenses have been dealt with by your umbrella company is a little strange. As the client is reimbursing the cost of the hire car to you, this should be included on the invoice submitted by your umbrella company and then processed as a chargeable expense when payment is made to you. What you seem to be saying is that the client pay the expense, less the VAT, and this is processed as a salary payment which is subject to tax and NI; you then enter the cost of the expense again, through the umbrella company, and it is processed as a non-chargeable expense upon which you receive tax relief?
The umbrella company is Paystream.Comment
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The expense policy of the client and the agency are irrelevant here - the only one that matters is the expense policy of your employer.
If their policy said that they paid no expenses at all on hire cars, you'd get nothing because that is what your employer's policy dictates.
So you need to speak to your employer and get a copy of their policy so this doesn't catch you again.Originally posted by MaryPoppinsI hadn't really understood this 'pwned' expression until I read DirtyDog's post.Comment
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Originally posted by arby View PostThat's correct. In my case there's the client (a large multinational), the agency that they hired me through and the umbrella company. A director at the client signs my time sheet and expense claims. I send them to the agency. The agency pays the umbrella my salary and my expense claims ex VAT. The umbrella treats the entire payment as subject to tax and NI and deducts accordingly. The way I reclaim the tax and NI and VAT on the expense is to submit the expense receipts to the umbrella as well so I recover the tax and the NI and the VAT that was deducted.
The umbrella company is Paystream.
£100 is paid to you on top of your salary and is therefore subject to deductions for tax and NI contributions - for arguments sake £30.00. So you have lost £20.00 as the VAT element of the expense was not paid and then another £30.00 through tax and NI
You then claim tax relief through your umbrella company on the original £120.00 which would be £24.00
Based on these very rough calculations you are losing out to the tune of about £26.00
That is if I have understood correctly.Comment
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Originally posted by DirtyDog View PostThe expense policy of the client and the agency are irrelevant here - the only one that matters is the expense policy of your employer.
If their policy said that they paid no expenses at all on hire cars, you'd get nothing because that is what your employer's policy dictates.
So you need to speak to your employer and get a copy of their policy so this doesn't catch you again.
They seem to be implementing a rather bizarre interpretation - that multiple sporadic and independent car hires of 1 or 2 days in duration constitute a long term lease. I've had 7 car hire days over 6 rentals between late July and now. Their intrangience so far at providing a rationale for their undocumented (and unsubstantiated) intrepration of their own policy is rather frustrating.Comment
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Originally posted by LisaContractorUmbrella View PostI think you may be losing out here - your original outlay was, say, £120.00.
£100 is paid to you on top of your salary and is therefore subject to deductions for tax and NI contributions - for arguments sake £30.00. So you have lost £20.00 as the VAT element of the expense was not paid and then another £30.00 through tax and NI
You then claim tax relief through your umbrella company on the original £120.00 which would be £24.00
Based on these very rough calculations you are losing out to the tune of about £26.00
That is if I have understood correctly.Comment
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Originally posted by arby View PostI will need to check a previous claim in detail but I was told that the tax and NI deducted were recovered when I claimed tax relief from the umbrella company and that the VAT was also repaid.Comment
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Originally posted by LisaContractorUmbrella View PostDid you provide your umbrella company with the receipts or did they go to your client?Comment
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