By using the services of an umbrella company it allows you to claim expenses that a PAYE employee at the agency would not be entitled to.
This is due to the over-arching employment contract with your umbrella company that deems your home to be your permanent work place and the client’s place of work your temporary work place.
You are therefore able to claim travel expenses to and from your temporary work place. By claiming all the appropriate allowances and exemptions you can minimise your tax bill however, this is not a way of avoiding paying tax. HM Revenue and Customs states that expenses claimed must be wholly, exclusively and necessarily incurred in the performance of your duties.
How Do Expenses Work?
Your work related expenses are processed as a tax benefit and help reduce your tax liability. You do not receive the full value of your non-chargeable expenses back as many first time contractors believe. Expenses are offset against your taxable pay and you receive part of the cost back, according to the tax rate applied to your income.
What can you claim?
The following guidelines are to illustrate to you the various expenses that can be claimed in relation to the performance of your duties.
First 10,000 miles 0.45 pence per mile Miles 10,001 and over 0.25 pence per mile
When completing the expenses claim form please ensure that you enter your vehicle registration and make.
Public Transport Travel
You can claim the cost of using public transport for business travel on production of a completed expense claim form together with receipts. Such public transport includes buses, trains including the underground, taxis, ferries and airfares.
Overnight Accommodation / Lodging Allowance
Where you are required to stay away from home overnight on business you can claim the cost of accommodation provided on production of a completed expenses claim form together with receipts.
Where you are required to work on site you can claim the cost of any meals (purchase of food and drink) that you have purchased. The amount that you may claim is set according to scale rates dependent upon the time period that you are away from home;
|One meal rate (where an employee is away from home for at least 5 hours)||£5|
|Two meal rate (where an employee is away from home for at least 10 hours)||£10|
|Three meal rate (where the duration of the qualifying travel is 15 hours or more and is ongoing at 8pm)||£25|
|Additional allowance payable where you qualify for the £5 or £10 rate and the qualifying travel is ongoing at 8pm||£10|
Protective Clothing / Tools
You can claim the cost of these items on production of a completed expenses claim form together with actual receipts as long as the tools and clothing are relevant to the nature of work and are solely for work use. The clothing MUST be genuine protective and safety wear required to fulfil health and safety rules on site.
Miscellaneous / other
You can claim the cost incurred on completion of an expenses claim form for items such as telephone and mobile calls, printing, postage and stationery upon provision of an itemised receipt.
How do you claim your expenses?
In order to claim for your expenses you will need to complete the expenses claims form. Your expenses claim form must reach us by Tuesday 12pm in order to be processed. Please ensure that the form is fully completed and signed and any receipts attached.
If you need help completing your expenses forms please call the team on 020 8819 0329