EXPENSESTHE COMPLIANCE TEAM AT BENIFACTS UMBRELLA WOULD LIKE TO REMIND ALL OF OUR CONTRACTORS THAT CLAIMING FOR EXPENSES YOU HAVE NOT ACTUALLY INCURRED; WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSE WOULD BE VIEWED BY HMRC AS TAX EVASION AND IS TAKEN VERY SERIOUSLY
As anemployee under an umbrella arrangement working on numerous temporary assignments, you are entitled to reduce your Tax Liability by claiming back expenses that you have to pay in connection with your work. These expenses are utilised to offset against your top line pay and are not payable in cash terms.
Our policy on claiming Business Expenses:In order to ensure your expense claims are processed and paid as quickly as possible, you should be aware of and understand the following points:
- You cannot claim expenses incurred prior to you joining Benifacts Umbrella, only those contracts whilst with us.
- All claims must only be for expenses incurred wholly, exclusively and necessarily in the performance of your contractual duties.
- In order to prevent delays or complications in the processing of pay and expenses, (which can result from overlapping time periods), expense claims should always cover the same period as the timesheet being submitted.
- You must not submit travel and subsistence related claims for any one location that you have already worked at or know you will work at, for more than 24 consecutive months.
- Where required, you must submit all necessary supporting evidence associated with a particular claim, such as receipts and proof of purchase or usage.
- You are not allowed to claim both a scale rate expense and a receipted expense for the same item (i.e. travel to work). If you attempt to do so we will only process the expense that matches the expenses claim declaration submitted with your timesheet, even if this is a lower amount.
Chargeable expensesAny out of pocket costs incurred that the agency or client has agreed to reimburse. These are usually invoiced through Benifacts Umbrella and require a duly completed expenses claim form, signed by the client, to support it. Your non-chargeable expenses are processed as a tax benefit and help reduce your tax liability. For example; Gross Income = £1000.00 Expenses = £200.00 Taxable income = £800.00 you do not receive the full value of your non-chargeable expenses back - they are offset against your taxable pay. This reduces your Tax liability and increases your Net take home.
Non-chargeable expensesCosts you have incurred as a direct result of the contract. These expenses are what we use to mitigate your Tax and NI each pay period. These do not go to the client and are processed by Benifacts Umbrella upon receipt of the appropriate expenses claim form signed by you. These added to your Gross Invoice value, are subject to VAT and are reimbursed by the Recruitment Agency or End-User Client. You do receive the full value of these.
Temporary workplaceTravel, accommodation and subsistence expenses can only be reimbursed without the deduction of tax and NIC if the site at which you are working meets the conditions of a temporary workplace. A temporary workplace is defined as “a place of work you attend to perform a task of limited duration or for some for a temporary purpose”. Simply put when working for Benifacts, you will probably work at a number of clients’ sites, by doing this you are attending that place for a temporary purpose.
ReceiptsIt is essential to retain receipts for everything that you claim. If HMRC decide to investigate you, they would want to see evidence that you have incurred the costs that you have claimed. If you are investigated and you do not have receipts to support your claims, you will find yourself in a lot of trouble. You would be made to pay back any underpaid tax, a fine of similar value and interest for the time you have held onto the additional funds. Worst-case scenario - you could be prosecuted for tax evasion! As a general rule you should keep all records appertaining to your contracting for a period of 6 years. That said, HMRC have the power to seek recovery of tax, and interest owed, up to and including the past 6 years if they have evidence of potential evasion.
A Smart Tip...Which Will help you a Long Way!Always obtain a receipt and keep it even if your claim does not require it. Why? We are compelled by the HMRC to conduct audits every year on random employees. Auditors require you to provide the appropriate receipts. Failure to supply such receipts could result in a HMRC investigation, so we want to ensure you're protected. Why not put them in a shoe box every night! They will be safe there in case you ever need them.
Business mileageUnder HMRC current rules you can claim 45p per mile for the first 10,000 business miles you do in your own vehicle each tax year and 25p per mile thereafter.
This mileage includes travelling to and from temporary workplaces you may be required to visit. Mileage, meeting these criteria, may be claimed without the need to submit receipts. However, a mileage log must also be completed and submitted, along with your expense form to Benifacts Umbrella.
Public Transport: Tube, bus, rail, ferry, taxi and air travelAny other travel costs to and from your home and temporary place of work may be claimed as long as receipts are provided. If you use an Oyster ticket you will have to provide us with the statement of journey details from http://tfl.gov.uk or your last 7 days journey details generated at the tube station. In case you use a weekly/monthly travel card, you will have to send us the photocopy of the card and we will allow the expenses on a proportionate basis. To claim this please post us the original receipts and if you are using oyster card please mention the tube/bus station names
In case you are not a UK resident and you visit UK specifically to do contract/locum jobs, you can claim your flight and/or ferry charges for the journey from the country of origin to UK. To claim this please post us the original receipts along with a photocopy of bank/credit card statement for payment proof.
Car RentalYou will be allowed to claim the car rental amount depending on the locum/contract days. You cannot claim for additional mileage allowance while you claim for the car rental expenses.
Associated Travel Cost & Parking ChargesRoad, bridge and tunnel tolls and congestion charges incurred while travelling on business may be claimed. However, original receipts are required for all claims. We are aware that there are some parking facilities and toll booths which do not provide the receipts or when you leave the car parking area the automated gates or exit attendants retain the tickets. Under these circumstances, please mention the name of the Parking Facility or the Toll Booth used and clearly mention the reason for not being able to submit the original receipts. Speeding, parking or clamping fines and penalties cannot be claimed.
Subsistence Allowance (Food & Drink)Subsistence as it’s more commonly known can be claimed at the same time as on contract if it meets the qualifying criteria and has been incurred in the course of business. Benifacts Umbrella has implemented a system of scale rate expenses, similar to those specified by HMRC, in relation to subsistence expenses.
Under this system, if an employee has incurred subsistence expenses whilst travelling on an allowable business journey, employers are able to make Tax and NICs free payments up to the specified rates allowed. Therefore, as a flexible worker, employed at a temporary workplace, you are entitled to make a claim for allowances to cover meals. This is based on the hours worked on that particular day at the temporary workplace, as long as you actually do incur the cost of food and drink.
To ensure you remain compliant you are only eligible to receive these expenses if you can show that you have met the qualifying criteria specified for every expense you claim, as laid out in the table below.
Meal ReceiptsYou are eligible to claim a maximum about of £6.00 for breakfast, £7.00 for lunch and £18.00 for dinner depending upon your shift hours. You will have to mention the amount as per the receipts in the food receipts column.
Overnight AccommodationYou can lawfully claim for reasonable accommodation expenses when overnight stays away from home are required as part of your contract.
If you are claiming accommodation rental costs, you must provide the original signed rental agreement, which must meet HMRC Dual Purpose rules, stating that you are only claiming for the working week. Claims are subject to the temporary workplace rule and if you are staying at a hotel or a B&B, the cost for the room, excluding meals, room service and beverages, will be processed.
Proof of overnight stay at a location other than your correspondence address is required, including the period/length of stay that was charged for, along with details of why an overnight stay was required.
This rule also applies to overseas accommodation, although if there is any element of private use, for example a holiday, within this period, the expense would be applied on a pro rata basis.
Incidental Overnight ExpensesIf you are required to stay away from your home and overnight, as part of a qualifying business journey, you may make a claim for an ‘Incidental Overnight Expense’ for each night of your required stay. The amounts you can claim, which are tax and NIC free, are:
£5 per night for each overnight stay
The claim is to cover sundry personal expenses incidental to you being away from home, whilst visiting a temporary workplace, and may include items such as newspapers, telephone calls home, laundry, rental of films and refreshments.
Professional memberships and subscriptionsProfessional association memberships can be claimed, providing that the professional body is on the list approved by HMRC. Visit www.hmrc.gov.uk/list3 for further details. You can also claim your GMC revalidation fees (for doctors only). We need the original receipts to accept the claim.
Subscriptions to trade journals and magazines are not claimable.
Training courses and tuitionTraining courses, tuition or seminars necessary for your current working contract, whilst in employment with Benifacts, can be claimed as long as you supply a receipt for the full amount, details of your current job description and the name and description of the training course/tuition.
Training courses and tuition may be allowable when updating skills, but not when learning new ones and must be relevant to your contract. Degree/Diploma courses are not generally permitted as claimable expenses. Any Training for personal developments or event involving leisure activities cannot be claimed for tax relief
Professional Books, Periodicals & JournalsA reasonable amount may be claimed to cover the cost of manuals and textbooks required for business purposes. Receipts are required in all cases.
Protective, speciality clothingThis claim can only be made for the cost of specialist protective clothing if it is a requirement due to the nature of your work and it must not be suitable for everyday wear outside your working environment. Receipts are, of course, required. Please note that protective clothing does not include your office wear.
Tools & EquipmentsYou can claim tools and equipments related to your business providing us the original receipt for the same
Postage, office consumables and stationaryThe cost of business-related postage, including that relating to any form of documentation with Benifacts, is claimable.
Office consumables, including printer ink, pens, envelopes, postageetc. and any stationery you use for business purposes may be claimed. However, the total cost must be reasonable and you will need to provide original receipts to validate your claim.
Telephone and mobile communicationsBusiness related telephone calls from a landline are claimable, but a copy of an itemised bill must be provided. However, line rental cannot be claimed unless there is a genuine business need for a second line at home, which must be used exclusively for business purposes.
Similarly, business calls to and from a mobile phone or other mobile communication device are claimable. All business phone call claims must be highlighted on an itemised bill and the total should either be added to your expense form or entered online.