Inland Revenue Dispensation........ Inland Revenue Dispensation........
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  1. #1

    shahsy

    Guest

    Default Inland Revenue Dispensation........

    I have just started a contract and I'm just signing up with a known umbrella company.

    They claim to have inland revenue dispensation for some non-receipted expenses (daily subsistence in my case for working over 10 hours per day).

    My question is would it be unreasonable for me to actually see the dispensation letter from the IR?

    Am I correct in assuming that I am potentially liable for additional taxes etc should the IR question things? Am I not an employee of the umbrella company? Do I have any redress if the IR start knocking on my door somewhere down the line?

    Your thoughts would be appreciated

    s

  2. #2

    Cojak

    Guest

    Default

    Read previous posts on umbrella co's. (Generally under "DON'T TOUCH xxx WITH A BARGE POLE!!!!!")

    There's more info on this

  3. #3

    jmiom2004

    Guest

    Default dispo

    Any reputable co, will show you a copy of the dispo from the IR. If they have one.

    Have a look around a few different ones though.

    Some claim to have dispos for all sorts of expenses, and then when you go to sign up, they want receipts for everything.

  4. #4

    planetit

    Guest

    Default Re: dispo

    Even with a dispensation, the expenses still have to be incurred by you “wholly and exclusively” in the conduct of your business. The dispensation just means the umbrella company doesn’t have to put it on your P11D. If you didn’t actually incur the expenses legitimately, then yes, the IR could come after you.


    P.S. If you are not an employee of the umbrella they wouldn’t give you a P11D. so the dispensation is worthless (?)

  5. #5

    Contractorumbrella

    Guest

    Default

    Hi Shahsy,

    You were quite right to question this. Planetit is correct when he says that a dispensation from the IR just means that expenses do not have to be reported on a P11D. If you just bear in mind that the IR never give something for nothing you won't go far wrong. The susbsistence (or non-receipted allowance) for 10 hours a day would apply to most people and the IR do not give you money just for going to work which is what this actually amounts to. I would certainly ask for something in writing to confirm that you would have no additional liability.

  6. #6

    passthevas

    Guest

    Default IR Dispensation

    The dispensation issue is a bitter feud between umbrella companies, with who can get the biggest without the need for receipts. Single employee cos can get the same dispenastions its not magic, you just have to show you have an auditable expense control system. The best Dispensations I have seent are P4's where they have agreed with the IR that you just have to run a log book for 6 weeks, buy a lunch & Dinner. and you can claim £21. Just ripe it-off and use it in your own ltd

    it would be nice for somewho uses P4 to inquire with the IR what is the status of the £21 with respect to the employee. (is it taxable)

  7. #7

    malvolio

    Guest

    Default Re: IR Dispensation

    No, it's not taxable because it's fraud, dummy.

    You can only claim expenses you have wholly and genuinely incurred in the execution of your trade. You can't claim money you haven't actually spent.

    What part of illegal do you people not understand, FFS?

  8. #8

    passthevas

    Guest

    Default dispensation

    malvolio, don't get abusive, I don't know what your qualifications are but I'm sure mine are far superior to yours in this area.

    Have you asked the IR the question?

    So all those civil servants who investigate contractors committing fraud by cliaming the 21 per diam, but not spending every penny? sounds like a conflict of interest to me. I question you could ask them at your next audit to get really going.

    I suggest you look up the meaning of dispensation in the english dictionary, before you start alledging fraud.

    its no more fraud than you cliammig your 100% tax deduction for your PC. when you play games on it and it is a capital item and be deducted over the its life time(3-5 yrs).

    ,

  9. #9

    malvolio

    Guest

    Default Re: dispensation

    dispensation (PERMISSION) noun [C or U] FORMAL
    special permission, especially from the Church, to do something that is not usually allowed
    But that is not the legal definiton in the sense you are using it, is it, where it actually means "a particular exemption from the law in certain circumstances for the benefit of a single individual." And I'm not going to write out all the sub-qualification definitions.

    OK, calm down. I'm sufficiently qualified to have an informed opinion, so up yours. I hope I understand the relevant bits of corporate and taxation law. And I'm happy to take criticism. And if you are really that smart, you might try to understand the forum name...

    Where do you get the idea that you can claim £21 if you haven't spent £21, for example? The dispensation is about what the umbrella has to account for in their systems. It does not exonerate the contractor if they claim more than they spend. Some umbrellas are presenting themselves as having "dispensation" from the IR and implying that it is therefore OK to overclaim. It isn't. It's illegal. QED

    Now go back to your pram.

  10. #10

    WWW ITDoctors co uk

    Guest

    Default Re: dispensation

    These so called umbrella dispensations exonerate the umbrella company but not the contractor.

    It won't stop the IR doing an expenses audit on a contractor and claiming lots of money back where there are no receipts or justification for ridiculous expense claims. I've heard of umbrellas encouraging contractors to claim £75 a night for accommodation. This is presumably a sweetener for the greedy/stupid contractor to offset the poor over priced service offered by the umbrella.

    Has anyone been stuffed by the IR over these so-called allowable expenses?

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