Claiming back expenses

**NotAllThere** · 11 June 2008, 19:07

I think HMRC are alerted to the abuse that some umbrella companies and their employees perpetrate. Their time will come - especially as they are easy targets.

Anyone who pays tax that they legitimately owe* should feel cheated. It's a shame that HMRC don't offer 10% of all tax collected from a tip off.

Personally, I'd shop the tosser anyway. The more they're working on people like him, the less time they'll have to catch me.

* Not necessarily what HMRC or the government feel that they owe

Of course, if your run your own ltd, you have an advantage. Then you can claim anything that's used for your business - not just the current contract.

**Damo1176** · 11 June 2008, 20:32

My colleague almost believes the tax man owes them a favour.....she knows she's doing wrong but like always says everyone else does it so so wil she.

I had the list.....blank DVDs, pens, ceolltape, storage boxes, postage for stuff to family abroad (which totals I might say £20 a week), stationary by the bucket load. Yet we have access to and she uses work stationary. A guy I know put a scanner through, we have one at work but he wanted one for his personal photography so put through a £1000 scanner!!!!

I am one of those overly honest people that trys to live by the rules but I tell you what the more i live life i realise honest people get nowt but a kick in the teeth, whilst the unsder hand scavengers make a killing.

Yes I am very bitter!!!

I would shop them but I don't see it'd do anything really and anyone else would think me an ahole for doing it

ONce i finish my current contract which is very much inside IR35 I am going to get myself a limited company and start doing things the right way and make some money....I'd like the ability to manage my future.

**Gonzo** · 11 June 2008, 22:13

Originally posted by Damo1176 View Post

I am one of those overly honest people that trys to live by the rules but I tell you what the more i live life i realise honest people get nowt but a kick in the teeth, whilst the unsder hand scavengers make a killing.

Yes I am very bitter!!!

I tend to focus on the warm feeling that you can get from occupying the moral highground*.

* Yes I know that our government thinks that I am NI avoiding scum but I do not value thier opinion.

**TheBigYinJames** · 12 June 2008, 07:27

Interesting thread where IR35-avoiding-pseudo-employees (which for shortness we shall calll stealing-medicines-from-the-mouths-of-sick-babes-national-insurance-which-pays-for-the-NHS-avoiding-tax-loophole-exploiters) getting all ruffled because someone working through a brolly gets to claim exactly the same stuff they claim for through their LtdCo. I take it that moral relativism hasn't reached their neck of the woods.

I'm not having a go at people who avoid paying NI, every contractor does it to a certain extent or other including myself, contract depending, just saying that when you are using a tax loophole to avoid paying some of what you would otherwise pay if you were employed through a normal term of employment (please, save the 'oh but I AM a real company!), then your moral high ground is actually quite shaky, and you should be keeping quiet, not throwing stuff in glass houses, and just be thankful you have a loophole to jump through,a nd stop squabbling about other people's.

**NotAllThere** · 12 June 2008, 07:31

Yeah, yeah, nice troll.

No moral relativism. It's possible to justify to the tax man putting through a scanner, for example, as a company purchase when you're operating ltd. That's legal and fine and above board. It's not possible, IMO, to justify the purchase when you're working through a brolly. The scanner in that case belongs to the brolly, not you, so if it turns up in your home, it's a BIK. And not paying the tax due on a BIK is evasion and/or fraud. The brolly employees aren't using a loophole, they're breaking the rules outright.

You need to check out the difference between avoidance and evasion.

**malvolio** · 12 June 2008, 07:34

Originally posted by TheBigYinJames View Post

Interesting thread where IR35-avoiding-pseudo-employees (which for shortness we shall calll stealing-medicines-from-the-mouths-of-sick-babes-national-insurance-which-pays-for-the-NHS-avoiding-tax-loophole-exploiters) getting all ruffled because someone working through a brolly gets to claim exactly the same stuff they claim for through their LtdCo. I take it that moral relativism hasn't reached their neck of the woods.

I'm not having a go at people who avoid paying NI, every contractor does it to a certain extent or other including myself, contract depending, just saying that when you are using a tax loophole to avoid paying some of what you would otherwise pay if you were employed through a normal term of employment (please, save the 'oh but I AM a real company!), then your moral high ground is actually quite shaky, and you should be keeping quiet, not throwing stuff in glass houses, and just be thankful you have a loophole to jump through,a nd stop squabbling about other people's.

Balls. LtdCo owners and employees, including brolly users, are entitled to claim exactly the same things for exactly the same tax treatment. If you claim things that are nothing to do with your business expenses, you are committing fraud. It's not clever, it's illegal.

And if you want to claim the moral high ground on avoiding taxation as a contractor, first go and cost up how much you don't cost UK PLC by not having all those trivial employee benefits like sick pay, holiday pay, pensions, training and access to employment protection. that's why we pay less tax.

**FiveTimes** · 12 June 2008, 07:37

Originally posted by Damo1176 View Post

Can someone tell me how the IR really does keep a handle on dodgy expenses.

I just found out that one of my colleagues for the past 6 months has put through their expenses everything from blank DVDs, storage boxes for home, batteries, stationary, postgae of stuff to family, stamps by the hundreds etc as expenses that do not apply to the contract they currently workon where everything is provided...it's insane not to mention dishonest.
!

I would think most of those mentioned are valid, I've claimed for most of the above as I have an office at home and need the stuff.
If you run a proper business then all the above a valid, just because there is a scanner/printer on the clients site doesn't mean you can't have one for the business at home. I tend to use my own equipment rather than the clients

**TheBigYinJames** · 12 June 2008, 07:41

Originally posted by NotAllThere View Post

Yeah, yeah, nice troll.
You need to check out the difference between avoidance and evasion.

It wasn't a troll. And I don't need to look up the difference between avoidance and evasion, since they are merely legal terms that I am very familiar with. I've been doing this a long time, and haven't gone to prison yet.

What I'm talking about is ethics. When you avoid NI through a tax loophole, it may be legal, but that doesn't make it ethical. Everyone lives with a certain level of lack of ethics, and believe me, I've probably been much badder than you on that score in my life. But accept that everyone has their own level of ethical responsibility, and they have to live by the decision they make against that judgement.

The the brolly employee who pays C/O NIC and income tax on revenue minus expenses may feel that someone who avoids paying some tax by slavishly poring over the IR35 regs and artificially contriving a pretend company setup to avoid it may be deemed unethical by their standards. You think they are unethical by putting a £1000 scanner through their expenses. Neither is right. Neither is wrong. Both are on a sliding scale of ethics, and both have to live with their share of bad ethics. Pot. Kettle. Black.

My point was that there is always someone claiming more than you, getting away with more than you, creaming the system for more than you. The grass is always greener on some other contractor's balance sheet. Life is too short. Let it go. Karma will catch up with them if they are being truly bad. Bitching about it just raises your own blood pressure.

**LisaContractorUmbrella** · 12 June 2008, 07:48

I can understand why some contractors new to the market see expenses as 'free money'; same way that some people don't think of credit cards as real money. Unfortunately believing hyped up marketing in both these cases will have the same result - at some point someone is going to come after you for a lot of money

Claiming back expenses