Contractor vs Employee and Expenses!

MissConfused_2

Hi Guys, could do with some help, as I'm slightly confused. I have just started working in a new position, the role is currently a contract role. The company in question uses its internal agency for contract staff, I'll refer to it as company B - company B only supplies technical staff, of which I'm not, so has reached out to company C to supply me - confused yet!! Company C have engaged the services of an umbrella company, who I am dealing with.....

Right, so the umbrella company are charging me £14 a week, and are dealing with my tax and NI for me, they are also saying I can claim back expenses on things such as lunch, mileage, stationery, computer equipment, books etc..is this correct? they have also said I don't need receipts for the lunch/mileage as it is substinence....

I think I'm confused as I don't know what I can and can't legitimately claim back - if anything - my understanding is very limited, but I thought if a company dealt with tax and NI, the person was classed as an employee, or different rights to a contractor? Is that incorrect?

Probably doesn't make much sense, so I'll apologise in advance.
Thanks very much

Horace

A contractor can be an employee - if the company contracting you are paying your tax and NI. With regards to your expenses - claim for mileage if you are travelling about for them, hotel stays, meals, any out of pocket expenses really for stuff that you need to help you carry out your job. Always provide receipts (the company need to keep receipts as they are evidence for the tax man) - mileage is usually 40p a mile. You can always contact the HMRC to find out what you can and can't claim for as an employee.

rich_months

Sorry this is a delayed post, I've been on holiday!

The rules on expenses are quite complex, although I'm sure your umbrella company will make them sound simple. I believe that Horace is referring to expenses that you get reimbursed in full from the client, what you are talking about is quite different - those are expenses that you offset against your tax bill.

There are several very important rules about these:

1) ONLY ever claim what you have actually incurred
2) ALWAYS keep receipts

Secondly, the rules in terms of subsistence are not quite black and white - many umbrella companies tell you that you can claim them whereas in reality maybe you shouldn't. This is a good guide, it's written by an ex-tax inspector.

Computer equipment is also generally a no-no as it is an asset the umbrella company don't own, but again the rules can be complex.