expenses Articles

Woolly Underwear and Other Expenses Rejected by HMRC
marketing | 28 January 2019
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With less than a week to go until the 31 January Self-Assessment deadline, HMRC has provided a bit of light relief by posting some of the weird and wonderful excuses from people who have missed the deadline in the past.


One late filing Brit tried to blame his mother in law, another tried to blame a junior member of staff and one even blamed the postbox.


The tax authority also posted a list of failed expense claims that people have tried to get away with, including five years’ worth of woolly underwear.

http://team@umbrella.co.ukFortunately though, no Umbrella.co.uk contractors will have to repay any claims since April 2016.

Confusion about the wording of the Finance Bill 2016 resulted in some contractors claiming for Travel and Subsistence (T&S) expenses when they shouldn’t have. An amendment to the bill has now been applied retrospectively to April, meaning that anyone who claimed for expenses incorrectly will now have to repay the money. 

marketing | 2 November 2015
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The Freelancer and Contractor Services Association (FCSA) has accused the government of valuing councillors over contractors, calling hypocrisy on government plans to provide travel-to-work tax relief to local councillors at the same time as talking of scrapping them for temporary workers.

At a time when the review into contractor travel and subsistence (T&S) tax-relief is ongoing, it has emerged that MPs want to award councillors a similar package of tax savings on their travel.

The government changes will exempt councillor travel expenses from income tax and National Insurance. This applies to journeys made between the councillor’s home and permanent workplace.  

marketing | 14 October 2015
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New research has found that proposed changes to contractors' travel and subsistence allowances could cost them up to 20 per cent of their annual revenue. 

In July of last year the government launched a review into expenses and benefits for contractors. On 23 September 2014 they published a discussion paper outlining their case for changing the current rules on tax relief.

The government believes that travel and subsistence expenses, like travel between workplaces and the cost of a meal at a temporary workplace, are over generous and outdated. 

Budget 2015 confirmed that a review of contractors expenses and in particular travel & subsistence would take place in the summer of 2015 with potential changes being made for the tax year commencing 6th April 2016. It proposes that Supervision, Direction and Control (SDC) will be the key factors in deciding whether a contractor is genuinely a self-employed or should in fact be treated as an employee of the end client where they are working.

What expenses can limited company contractors claim

If you contract through a limited company, there are certain expenses that you can claim against your income to reduce your tax liability.

If your limited company makes £50,000 and you claim back £10,000 in allowable expenses, the taxable profit will be £40,000.

There are some rules governing what expenses limited company contractors can claim.

Like other travel and subsistence reliefs, the rules for claiming accommodation expenses are changing from April 2016.

In the new tax year, contractors who have been ‘caught out’ by HMRC’s new tax rules will not be able to offset their accommodation expenses against their income, which could result in thousands of contractors paying more in tax.  

Previously, the contracting community was concerned that these changes would affect everybody working through an umbrella or personal service company (PSC). 

marketing | 19 October 2015
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The Association of Independent Professionals and the Self-Employed (IPSE) has welcomed news of deflation in the UK economy.

Last week, the consumer price index figures for September showed that prices had dropped by 0.1%. This news was welcomed by IPSE which said that lower prices and rising incomes were making freelancers and other self-employed people better off.  

While deflation is treated cautiously by some economists and politicians, lower consumer prices and, in particular, lower transport costs will directly benefit contractors. 

marketing | 26 March 2015
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The recent Budget proposal to open a discussion on Umbrella Company expenses means that any changes or discussion are largely on hold until after the General Election with the aim of a discussion document being issued in the summer.

Today, 10th March 2015, representatives of the Umbrella Company industry and of Employment Intermediaries will be meeting a number of MP’s at the House of Commons to discuss the HMRC review of Tax Relief on Expenses.