Supply teaching & umbrella company expenses

bridgend_girl

Reposted from elsewhere. thanks


My teaching agency has just moved me and all their other teachers over to an umbrella company which has processed our pay with mileage and subsistence claimed against tax and NI. A saving of £120 approx. for which they have charged me a processing fee of £59.

Believing that when "something seems to good to be true then it isn't" I rang HMRC who have confirmed that supply teachers are not eligible for mileage etc. along with the relevant EIM reference.

I have opted opt of this umbrella company by e-mail tonight! What about others out there who are potentially sitting on a tax time bomb! Teachers beware please.

agrinnall

I suggested to the OP that she post here in the hope that the likes of jimmo, mikeyorks or chrismac1 (to name but three) could advise on whether what HMRC have told her is correct. There is more information in the original thread, including the manual HMRC have said contains the relevant rule (and which another poster has said is about NI rather than tax).

https://forums.moneysavingexpert.com/discussion/3833405

Mikeyorks

Looks to be fairly clear - and from the reference provided?

However, some agency workers undertake a number of different jobs on the same day. Examples include nurses or domestic workers. In these cases you can accept a deduction for the cost of travel between different jobs on the same day. You should not accept a deduction for the cost of travel from home to the first job of the day or to home from the last job of the day

http://www.hmrc.gov.uk/manuals/eimanual/EIM32130.htm

bridgend_girl

Seems quite clear to me as well; although the umbrella company have responded to my e-mail withdrawing myself from this scheme with the following

"HMRC will always give negative advice towards offsetting schemes as it means they receive less tax and NI payment, however I assure you it is allowed and as a temporary worker you are entitled to do so. Should you wish to revert back to this in the future it will be no problem."

They are solely dealing with teachers and teaching assistants! Future problems for many I fear.

chrismac1

I totally agree. I myself did a bit of agency work back in 1995. It never ocurred to me that this sort of thing was claimable then, and in my view it still isn't now!

Mikeyorks

bridgend_girl wrote: »

Future problems for many I fear.

There seems to be a new plague of these companies. Pushing the boundary of ignorance of their captive audience - and based outside the UK. I'd just been looking at one for my son's girlfriend .... who was of the impression she was on PAYE - until she asked for holiday when a contract was suddenly provided!

They were paying her minimum wage less 8% fees .... and this in central London. When I found out they were based in Cyprus ... that helped push her into immediate termination.

paulus

You need to take a balanced view on this. With an umbrella, if it's set up correctly you'll be employed by the umbrella and not engaged by the agency. You will have an overaching contract covering several temporary assignments and the travel to each temporary workplace should attract tax relief. This is different to a single agency contract for a single assignment where expenses would be taxable. As a principle it's something HMRC don't particulary like, but their strategy is to investigate those umbrellas where procedures aren't watertight rather than close the favourable tax treatment.

bridgend_girl

Voiced my concerns to my teaching agency today - turns out i was wrong ( it happens;-) ) my wages are being just being out sourced to a payroll company, My employment is still with the agency.

Don't think this makes any difference though - when I voiced my concerns they said it was nothing to do with them and I should discuss it with the payroll company direct!

They are completely distancing themselves from it all even though they have instigated the changes, Frustrating.