First time contracting

Benny2020

Been offered a job through an agency for a 12 month employment contract at a major FTSE100 company but its an 80 mile round trip and its my first time as a contractor.
Pay is £45k but i don't know the details of how you get paid (PAYE or umbrella) yet, what is normal in these circumstances?
Can i claim expenses for traveling? or anything else?

Grumpy_chap

Your opportunity to claim any expenses will be very limited.
It is almost certain that such a large company will deem the role to be "inside IR35" and that will mean employment via an Umbrella Company (most likely), PAYE via the Agency, or as a direct employee of the Client on a fixed term contract (also PAYE).

Have you asked the question about IR35 status?  If the role is "outside IR35" you will have far more opportunity to claim expenses.  I doubt the role will be outside IR35.

Marcon

Benny2020 said:

Been offered a job through an agency for a 12 month employment contract at a major FTSE100 company but its an 80 mile round trip and its my first time as a contractor.
Pay is £45k but i don't know the details of how you get paid (PAYE or umbrella) yet, what is normal in these circumstances?
Can i claim expenses for traveling? or anything else?

Your agency should be able to give you plenty of useful information - and they will be the only ones who can tell you the basis on which you are being engaged, so talk to them before doing anything else.

Greymug

Usually contracts don't have a salary, they only have a day rate.

The fact that you say it pays 45k makes me think that you're actually talking about an FTC contract.

Anyways, here's how they all work:

- FTC contract. It's basically equivalent to a permanent job, only you have an end date. You get salary, pension contributions, holiday pay and all the other benefits permanent employees have. You DO NOT get expenses back.

- day rate contract inside IR35. You work through an umbrella company that pays your taxes and makes sure you're not investigated by hmrc. You don't get paid time off (if you take a day off, you don't get paid for that day) and you do get minimum pension contributions. Again, you DO NOT get expenses back.

- day rate contract outside IR35. You can work through an umbrella (in which case see above) or you can work through your Ltd company. You don't get paid time off. Working via Ltd is more tax efficient (for now) but has got other costs involved such as a good accountant that has to set up the Ltd for you (unless you already have one) and sets up all the other important things and paperwork for your business. You CAN get expenses back. Your accountant will tell you what you can claim,

Sandtree

Greymug said:

- day rate contract inside IR35. You work through an umbrella company that pays your taxes and makes sure you're not investigated by hmrc. You don't get paid time off (if you take a day off, you don't get paid for that day) and you do get minimum pension contributions. Again, you DO NOT get expenses back.

Technically you do, unless you ask for your holiday to be paid up front, but it circular because you fund it and so take home less to start with so that when you get your holiday pay its just really deferred income.

Legally you are an employee of the umbrella and so should qualify for SSP if you are off sick and meet the other requirements. Many umbrella websites confirm this is the case but dont comment on the source of the funding for it... a quick chat on Live Chat with one agent stated they recover it all back from HMRC and never from your rates... whilst I believe the former cannot be true for longer illnesses they stick by the later point.