Reimbursing backdated expenses after giving notice? Please help! Reimbursing backdated expenses after giving notice? Please help!
Page 1 of 8 123 ... LastLast
Posts 1 to 10 of 75
  1. #1

    Nervous Newbie


    Join Date
    Aug 2010
    Posts
    15

    Default Reimbursing backdated expenses after giving notice? Please help!

    Hello Everyone,

    I might have an issue with my umbrella company and would really appreciate any help or pointers.

    I have been working for them for a few years. From my earnings as contractor they paid me a base salary and offered to do three things with the surplus: pay it immediately as a bonus, reimburse my expenses from it, or keep it in a "reserve" money pot from which they can continue to pay me when I am between projects. I used all of these options, depending on my situation in a given month, but now I served my notice with about £40K still sitting in the "reserve."

    Now is when it gets interesting. I have incurred over £20K of legitimate accomodation expenses that I have not yet claimed, dating back to 2011. Which I expected to be reimbursed with my last payroll. But...

    The umbrella company is now saying that some HMRC ruling stipulates that once you resign, you are no longer able to claim expenses. Even though these are the expenses from BEFORE when you gave notice.

    This doesn't make a lot of sense to me and they are not too confident either, but googling did not really help. Can anyone share their thoughts on this please, or provide pointers for further research? Is there a way to speak to HMRC directly about that? I would also appreciate a phone number of a professional, as I am happy to pay for consultation to avoid losing £10K.

    Thanks in advance.
    Egor.

  2. #2

    Double Godlike!

    stek's Avatar
    Join Date
    Oct 2009
    Location
    East of Eden
    Posts
    11,501

    Default

    Bonus? Spidey senses are tingling, tell us more....

  3. #3

    Nervous Newbie


    Join Date
    Aug 2010
    Posts
    15

    Default

    Bonus is just the money paid over the base salary in a given month, taxed the same.

  4. #4

    Umbrella Queen

    LisaContractorUmbrella's Avatar
    Join Date
    Jun 2006
    Location
    Colchester
    Posts
    5,371

    Default

    I am a little confused. I cannot understand why your umbrella company would give you the option to take part of your salary as expenses - either you have claimed legitimate expenses on which you are entitled to tax relief or you haven't Expenses should be claimed against the period that the work was undertaken - I don't see why you would lose the tax relief on the costs that you incurred over a period of 3 years. Can the OP give us a little bit more information?
    Connect with me on LinkedIn

    Follow us on Twitter.

    ContractorUK Best Forum Advisor 2015

  5. #5

    bored now

    eek's Avatar
    Join Date
    Jun 2010
    Location
    😂
    Posts
    22,766

    Default

    Quote Originally Posted by LisaContractorUmbrella View Post
    I am a little confused. I cannot understand why your umbrella company would give you the option to take part of your salary as expenses - either you have claimed legitimate expenses on which you are entitled to tax relief or you haven't Expenses should be claimed against the period that the work was undertaken - I don't see why you would lose the tax relief on the costs that you incurred over a period of 3 years. Can the OP give us a little bit more information?
    Without a name you have to wonder what sort of "umbrella" company it is....
    merely at clientco for the entertainment

  6. #6

    Nervous Newbie


    Join Date
    Aug 2010
    Posts
    15

    Default

    It is not salary that the expenses reimbursments come from, I think. Here are some numbers. My salary is £41K per year, but my rate was £400 per day. They receive £8K (£400 x 20 days) per month from the client, make necessary deductions, this leaves a little over £6K. From that they pay me £3400 gross as my salary as per employment contract. This leaves £2600 suprlus from which they can reimburse my legitimate expenses and/or pay it out as a taxable bonus.

    For quite a while I did not claim the expenses or taken the bonus, letting the surplus accumulate. Now I want to claim these expenses but they are saying this may be againts some HMRC ruling because I already gave leaving notice.

    Does that make sense?

    P.S. They also sponsored my work visa which may explain a higher cut or some of their practices. Overall they come across as decent people and I don't think their intention is to pocket my expenses money.
    Last edited by brother52; 14th May 2014 at 08:01.

  7. #7

    Umbrella Queen

    LisaContractorUmbrella's Avatar
    Join Date
    Jun 2006
    Location
    Colchester
    Posts
    5,371

    Default

    Quote Originally Posted by eek View Post
    Without a name you have to wonder what sort of "umbrella" company it is....
    Indeed
    Connect with me on LinkedIn

    Follow us on Twitter.

    ContractorUK Best Forum Advisor 2015

  8. #8

    Faqqed Off

    TheFaQQer's Avatar
    Join Date
    Oct 2006
    Posts
    36,490

    Default

    Quote Originally Posted by brother52 View Post
    The umbrella company is now saying that some HMRC ruling stipulates that once you resign, you are no longer able to claim expenses. Even though these are the expenses from BEFORE when you gave notice.
    They are correct. Once you have given indication that you aren't going to be continuing, the workplace cannot be described as being a temporary workplace any more. As such, you cannot claim expenses for travel and subsistence which relate to your getting to your permanent place of work.

    Expenses should always be claimed against the period in which they were incurred, or failing that, claim them before you give notice.
    Best Forum Advisor 2014
    Work in the public sector? You can read my FAQ here
    Click here to get 15% off your first year's IPSE membership

  9. #9

    Faqqed Off

    TheFaQQer's Avatar
    Join Date
    Oct 2006
    Posts
    36,490

    Default

    Quote Originally Posted by brother52 View Post
    P.S. They also sponsored my work visa which may explain a higher cut or some of their practices.
    Did they find you work, or did you find the contract and just use them to sponsor the visa?
    Best Forum Advisor 2014
    Work in the public sector? You can read my FAQ here
    Click here to get 15% off your first year's IPSE membership

  10. #10

    Umbrella Queen

    LisaContractorUmbrella's Avatar
    Join Date
    Jun 2006
    Location
    Colchester
    Posts
    5,371

    Default

    Quote Originally Posted by brother52 View Post
    It is not salary that the expenses reimbursments come from, I think. Here are some numbers. My salary is £41K per year, but my rate was £400 per day. They receive £8K (£400 x 20 days) per month from the client, make necessary deductions, this leaves a little over £6K. From that they pay me £3400 gross as my salary as per employment contract. This leaves £2600 suprlus from which they can reimburse my legitimate expenses and/or pay it out as a taxable bonus.

    For quite a while I did not claim the expenses or taken the bonus, letting the surplus accumulate. Now I want to claim these expenses but they are saying this may be againts some HMRC ruling because I already gave leaving notice.

    Does that make sense?

    P.S. They also sponsored my work visa which may explain a higher cut or some of their practices. Overall they come across as decent people and I don't think their intention is to pocket my expenses money.
    The umbrella company should not be working in this way and should not have sponsored your visa as this can only be done by the company that you are actually performing the work for I believe.

    With regard to the expenses - the only HMRC ruling that would affect whether or not they can pay them would concern the temporary workplace rules - if you only worked on a single assignment whilst in their employment, at the point you gave notice you confirmed that it was your intention not to work on another assignment and therefore your place of work becomes permanent by default and tax relief on travel and accommodation expenses is no longer allowable. If you worked on more than one assignment and are still in your notice period then there is no reason why your salary/expenses cannot be paid.

    Even if the umbrella company were to pay the money as a bonus which would then be taxable you would have the option to claim the expenses directly through HMRC.
    Connect with me on LinkedIn

    Follow us on Twitter.

    ContractorUK Best Forum Advisor 2015

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •