Umbrella companies, What can I claim for?
Discussion
I've got myself a new job 
, and as its contracting for the first 4-5 months I can choose to be paid PAYE, Umbrella, or as Ltd company.
It is an Engineering role.
I'm thinking Ltd company is alot of effort for the timescale, and wanted to ask,
Can I claim mileage under an Umbrella company?
I'll be doing a lot of driving to and from work, about 180 mile round trip.
, and as its contracting for the first 4-5 months I can choose to be paid PAYE, Umbrella, or as Ltd company.It is an Engineering role.
I'm thinking Ltd company is alot of effort for the timescale, and wanted to ask,
Can I claim mileage under an Umbrella company?
I'll be doing a lot of driving to and from work, about 180 mile round trip.
Edited by willyturbo on Saturday 22 August 22:09
k.Depends.
Is (the intention that) this the first of many short term assignments at various clients, all whilst using the same umbrella? Or do you intend to be working at the same place (not necessarily via the brolly or even in the same building) for more than two years?
Where will your permanent place of work be for the next 4 - 5 months?
Is (the intention that) this the first of many short term assignments at various clients, all whilst using the same umbrella? Or do you intend to be working at the same place (not necessarily via the brolly or even in the same building) for more than two years?
Where will your permanent place of work be for the next 4 - 5 months?
willyturbo said:
I've got myself a new job , and as its contracting for the first 4-5 months I can choose to be paid PAYE, Umbrella, or as Ltd company.
It is an Engineering role.
I'm thinking Ltd company is alot of effort for the timescale, and wanted to ask,
Can I claim mileage under an Umbrella company?
I'll be doing a lot of driving to and from work, about 180 mile round trip.
I've gone Limited company. It took 3 hours to set up. The tax side is taking a little longer but I'm now registered as an employer under the PAYE scheme. My Accountant has checked my contract and it's IR35 Compliant, and we are claiming mileage to the clients site at 40 p a mile. But costs of being away from home etc. , and as its contracting for the first 4-5 months I can choose to be paid PAYE, Umbrella, or as Ltd company.It is an Engineering role.
I'm thinking Ltd company is alot of effort for the timescale, and wanted to ask,
Can I claim mileage under an Umbrella company?
I'll be doing a lot of driving to and from work, about 180 mile round trip.
Edited by willyturbo on Saturday 22 August 22:09
I figured that IF I want to spin the contracting into more lucative Lean Consultancy It'd look better to be a Ltd Company and possibly vat registered.
I was under an Umbrella company and claimed for everything I could and they encouraged it....
Anyway another benefit that you hopefully won't need.... is that as I was classed as 'full time employed' by the umbrella company it meant my loan insurance schemes were still valid when the contract was terminated.
Anyway another benefit that you hopefully won't need.... is that as I was classed as 'full time employed' by the umbrella company it meant my loan insurance schemes were still valid when the contract was terminated.
Personally I would never attempt to claim for travel to the same place every day, but then I wouldn't be prepared to travel 180 miles every day. If you are LTD then you can claim that your perm place of work is your own office and you are therefore visiting clients.
I would happily claim if I travelled there on Monday and back on Friday, and claim for hotels/meals etc. Or if you are travelling to different sites on a regular basis.
Somewhere on the HMRC site there is guidance about this. There is the two year rule, where as soon as you know that you will be travelling to a given area for 2 years then all subsistence/travel expenses have to stop (because that is deemed to be now a perm place of work - even if it is multiple companie sin the same location, like the city or stockley park or whatever).
I know that brollies regularly encourage people to claim anything and everything, but if you get looked at by the revenue it is you that have the problem, not th ebrolly.
I guess for 4 months you could claim that it is a temporary assignment. Not long enough to justify moving/renting and so would be OK.
I would happily claim if I travelled there on Monday and back on Friday, and claim for hotels/meals etc. Or if you are travelling to different sites on a regular basis.
Somewhere on the HMRC site there is guidance about this. There is the two year rule, where as soon as you know that you will be travelling to a given area for 2 years then all subsistence/travel expenses have to stop (because that is deemed to be now a perm place of work - even if it is multiple companie sin the same location, like the city or stockley park or whatever).
I know that brollies regularly encourage people to claim anything and everything, but if you get looked at by the revenue it is you that have the problem, not th ebrolly.
I guess for 4 months you could claim that it is a temporary assignment. Not long enough to justify moving/renting and so would be OK.
Uusually, a person working under an umbrella company is still an employee - it just happens that the the individual is an employee of the umbrella company rather than the entity in which he is actually carrying out his work.
In other words, the umbrella company is nothing more than an employment agency.
The rules governing the allowability for tax purposes of expense claims will therefore be those rules that pertain to employees rather than those that relate to those running an business.
The allowability of expense claims for employees is much tighter tahn it is for businesses.
A business can claim expenses and costs incurred "wholly and exclusively for the purpose of the trade".
An employee can only claim those expenses incurred "wholly, exclusively AND NECESSARILLY in the course of their employment".
That additional restriction "and necessarilly" makes a HUGE difference to what can be claimed.
In other words, the umbrella company is nothing more than an employment agency.
The rules governing the allowability for tax purposes of expense claims will therefore be those rules that pertain to employees rather than those that relate to those running an business.
The allowability of expense claims for employees is much tighter tahn it is for businesses.
A business can claim expenses and costs incurred "wholly and exclusively for the purpose of the trade".
An employee can only claim those expenses incurred "wholly, exclusively AND NECESSARILLY in the course of their employment".
That additional restriction "and necessarilly" makes a HUGE difference to what can be claimed.
Edited by Eric Mc on Sunday 23 August 12:19
Register as self employed takes 2 secs then get paid through umbrella by company hiring you and claim mileage.
The IR are the most useless inept and incompetent fools I have ever had the misfortune of having to deal with.
They couldnt find their feckin elbow never mind find you out if you break a teeny weeny rule slightly and even if they did odds are they would get so befuddled that rather than asking for the money back they would insist on paying it all to you again.
The IR are the most useless inept and incompetent fools I have ever had the misfortune of having to deal with.
They couldnt find their feckin elbow never mind find you out if you break a teeny weeny rule slightly and even if they did odds are they would get so befuddled that rather than asking for the money back they would insist on paying it all to you again.
TooLateForAName said:
Personally I would never attempt to claim for travel to the same place every day, but then I wouldn't be prepared to travel 180 miles every day. If you are LTD then you can claim that your perm place of work is your own office and you are therefore visiting clients.
According to 3 accountants, 4 other contractors who are limited, a retired IR tax officer friend, (now an independent advisor gamekeeper turned poacher), and an IR official I know through a friend, it's pretty simple. My Contract has a Substitution Clause, I can carry out the work both at the client site and from my business address, and I am free to take on other work, without any reference to them. As a Ltd company I can claim travel expenses away from my office, including overnight accommodation and meals, plus reasonable miscellaneous expenses.
It matters not whether I am self employed via an umbrellor company or via a Ltd company. These are LEGITIMATE business costs that I have incurred. I would not chose to work 100 plus miles away from home, I am not in a position to move house for a temporary role and the IR know that it would be foolish to consider it.
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