Advice on using an umbrella company please

Pennywise

InsideInsurance wrote: »

If anyone tells you that you can claim anything other than at cost then get them to give it you in writing and signed so you can sue them if HMRC comes after you for tax fraud.

The 5/10 hour allowances and expenses dispensations are for the employer's benefit not yours. It simply means the employer (your umbrella) doesn't have to see your receipts nor report the payments to HMRC on the P11d return.

You, personally, should only be claiming the actual costs you incur. The round sum allowances and dispensations granted to your umbrella are for them, not you.

If you actually spend less than you claim, you would be in trouble if HMRC enquire into your personal tax affairs.

In practice, you can claim your "average" spend from the umbrella, which makes everyone's paperwork easier, but you still need the underlying evidence of actually spending the amount you claim.

InsideInsurance

Pennywise wrote: »

You, personally, should only be claiming the actual costs you incur. The round sum allowances and dispensations granted to your umbrella are for them, not you.

Why you quoting me? I also said you have to claim actual cost too

System

Also the new interpretation of the 10 hour rule from HMRC so my accountant tells me is that the allowance is only payable if doing >10 hours is an exception and not a norm. Also you shouldn't be claiming for lunch as that is a normal expense and not as a result of the job

InsideInsurance

!!!!!! wrote: »

Also you shouldn't be claiming for lunch as that is a normal expense and not as a result of the job

This is the normal argument that you are not at your permanent place of work, I imagine the OP is also claiming commuting costs with the same justification.

As soon as it appears that the OP will be working at the same site for 2 years then their ability to claim it is temporary thus having allowable expenses disappears even if they are still on a rolling 3 month contract etc.

System

InsideInsurance wrote: »

This is the normal argument that you are not at your permanent place of work, I imagine the OP is also claiming commuting costs with the same justification. .

There is very little justification for claiming. It is not permanent place of work but normal place of work.

If you are employed on a 6 month contract to work at 1 any street then you can not claim as that is your normal place of work for that contract. However if you are required to work at a remote site from this then it is claimable as part of the travel expenses to get to the remote site

Bellabubble

I've just been reading above and it is very informative. I've recently moved from being full time to contracted work but one company I am using will only use an umbrella company to pay me. The umbrella company will charge me £10 a week to use them. Is this a going rate or am I being taken in here?
Thanks

paddyrg

Bellabubble wrote: »

I've just been reading above and it is very informative. I've recently moved from being full time to contracted work but one company I am using will only use an umbrella company to pay me. The umbrella company will charge me £10 a week to use them. Is this a going rate or am I being taken in here?
Thanks

Sounds pretty cheap to me.

phoenix21

why do I have to:
1: pay employers and employees national insurance
2: pay my employers contribution to my pension
3: pay into a pension I didn't agree to.
4: get holiday pay taken out of my wages and then put back again


im working for an agency getting paid through an umbrella company...
they both deny they are my employer....
because I travel far to work my expenses are being carried forward each week ....how do and when can I claim that back....


it seems to me that this new paye system has not been thought through properly...is it legal what the umbrealla companies are doing each week....I pay them £21 weekly..... when I ask any questions they start reciting from their hymm sheet some bla bla that doesn't make any point....
they seem to be unaccountable to anyone I know and every accountant ive asked are bambozzled at my wage slip....
if im paye how do my 3 children get taken into account on my tax ....
and because im 8 months working like this was I supposed to get a pay rise after 6


im dreading april

paddyrg

phoenix21 wrote: »

why do I have to:
1: pay employers and employees national insurance
2: pay my employers contribution to my pension
3: pay into a pension I didn't agree to.
4: get holiday pay taken out of my wages and then put back again


im working for an agency getting paid through an umbrella company...
they both deny they are my employer....
because I travel far to work my expenses are being carried forward each week ....how do and when can I claim that back....

if im paye how do my 3 children get taken into account on my tax ....

1,2 are because if you were working as an employee directly, the company would pay their portion, you yours. As you work for the umbrella company, all they do is slice up the money coming in so it simulates you being employed directly, including the amount the employer would have to pay.
3 pensions- pain in the backside all round, but (grossly simplified) you have to be opted into a pension as a part of employment. It's a bigger nightmare for employers TBH, but if you have a pension already the umbrella company can pay into that instead.
4 PAYE people have to have holiday, and so this is managed as holiday pay at (IIRC 12.07%) and is shown separately so you don't try to claim it from the umbrella company and it's unambiguous.

The umbrella company absolutely are employing you in the strict legal sense, but not in any real sense - all they are doing is providing a service enabling companies to pay you as a limited company (MUCH easier for the employing company because of the above, instead they pay a fixed amount and have no onward liabilities).

Expenses, talk to the umbrella company, but the reality is you get them as allowances against tax, not as a lump sum, as the money comes from your earnings in the first place. For instance if you catch a £100 train and pay higher rate tax, they offset the expense against your tax so you only end up suffering £60, unless you have made some other expense arrangement with the contracting company that's paying your umbrella company.

Ask them about the kids, that's some kind of tax credit so all them if that's in your wage, or if you need to claim separately, or how it works. For £21/week, someone there can spend 10 minutes explaining this stuff.

NicolaGrace

I have started working for a company and i get paid via payjump, they have sent me a payslip but have also advised on an umberella company. I have no idea, even after reading the above posts on what i need to do. Can anyone recommend an umberella company, i am worried that i will be charged with a huge tax bill!!