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CSA assessment of Umbrella expenses

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    CSA assessment of Umbrella expenses

    Sorry for the long post, but I’ve trawled these forums, but I can’t find an answer to my specific questions, perhaps someone has had the same problems:

    I was made redundant back in May 2012, signed on for JSA & was assessed by the CSA to pay the standard £5/week

    I had the opportunity to take a short-term 2 month contract away from home & thought hell, even after expenses it pays more than JSA, so I signed up with one of the major Umbrella’s

    Things went well, 2 months turned into about 6 months ending 31 March 2013, I claimed all my business expenses including the £25 meal allowance & over-night expenses etc. about 12K in total

    April 2013 with P45 & P60 in-hand decide it’s time reconcile my CSA payments against my actual income for the tax year

    First assessment eventually comes back after 4 months, totally ridiculous figure, after much digging turns out they converted my contract rate to a weekly assessment, then backdated the figure to the start of the year plus the 4 months I’d been waiting. Not having that they were politely told, think again.

    Next assessment comes back, figures look better, but still didn’t look quite right, so more digging

    It turns out that CSA had contacted the Umbrella for confirmation of income (even though I’d supplied a copy of my P60) the Umbrella supplied details of my take home after PAYE plus the 12K in expenses refunded

    So, back to the CSA, these are refunded business expenses, not income, I’m not paying 15% on this

    CSA request details of expenses claimed, which were dully sent, I now have a letter stating that various expenses are not allowable under ‘Child Support Law’ particularly the meal allowance and incidental expenses

    Has anybody had any experience of this?, I can’t find anything like this on the web

    #2
    Originally posted by Magpie252 View Post
    Sorry for the long post, but I’ve trawled these forums, but I can’t find an answer to my specific questions, perhaps someone has had the same problems:

    I was made redundant back in May 2012, signed on for JSA & was assessed by the CSA to pay the standard £5/week

    I had the opportunity to take a short-term 2 month contract away from home & thought hell, even after expenses it pays more than JSA, so I signed up with one of the major Umbrella’s

    Things went well, 2 months turned into about 6 months ending 31 March 2013, I claimed all my business expenses including the £25 meal allowance & over-night expenses etc. about 12K in total

    April 2013 with P45 & P60 in-hand decide it’s time reconcile my CSA payments against my actual income for the tax year

    First assessment eventually comes back after 4 months, totally ridiculous figure, after much digging turns out they converted my contract rate to a weekly assessment, then backdated the figure to the start of the year plus the 4 months I’d been waiting. Not having that they were politely told, think again.

    Next assessment comes back, figures look better, but still didn’t look quite right, so more digging

    It turns out that CSA had contacted the Umbrella for confirmation of income (even though I’d supplied a copy of my P60) the Umbrella supplied details of my take home after PAYE plus the 12K in expenses refunded

    So, back to the CSA, these are refunded business expenses, not income, I’m not paying 15% on this

    CSA request details of expenses claimed, which were dully sent, I now have a letter stating that various expenses are not allowable under ‘Child Support Law’ particularly the meal allowance and incidental expenses

    Has anybody had any experience of this?, I can’t find anything like this on the web
    No idea on the CSA side myself, but there is one thing you've missed. If you only have one gig under an umbrella contract, you can't claim expenses...
    Blog? What blog...?

    Comment


      #3
      Mal raises a very important point.

      Have you tried speaking to your umbrella about this? They are your employer and they should know about this type of thing and likely had a contractor that has gone through something similar so should be able to help with past experience as well.
      'CUK forum personality of 2011 - Winner - Yes really!!!!

      Comment


        #4
        Originally posted by Magpie252 View Post
        I claimed all my business expenses including the £25 meal allowance
        Did you claim for expenses which were not incurred?
        Originally posted by MaryPoppins
        I hadn't really understood this 'pwned' expression until I read DirtyDog's post.

        Comment


          #5
          Originally posted by malvolio View Post
          No idea on the CSA side myself, but there is one thing you've missed. If you only have one gig under an umbrella contract, you can't claim expenses...
          +1

          So as well as paying the CSA, you need to make sure that they are on your tax return to pay income tax on the £12k. Nothing to do with child support law, just employment law.
          Originally posted by MaryPoppins
          I hadn't really understood this 'pwned' expression until I read DirtyDog's post.

          Comment


            #6
            Originally posted by DirtyDog View Post
            +1

            So as well as paying the CSA, you need to make sure that they are on your tax return to pay income tax on the £12k. Nothing to do with child support law, just employment law.
            Glad you said that not me. So that is £2.4k plus child support based on the full income. By the sounds of it remaining on JSA although impossible would have been better....
            merely at clientco for the entertainment

            Comment


              #7
              Originally posted by eek View Post
              Glad you said that not me. So that is £2.4k plus child support based on the full income. By the sounds of it remaining on JSA although impossible would have been better....
              Not for his kids.....
              'CUK forum personality of 2011 - Winner - Yes really!!!!

              Comment


                #8
                OK, excuse my ignorance, but why is being reimbursed legitimate business expenses through an umbrella any different to being reimbursed as a perm employee?, I thought that was the whole point of using an umbrella. And why should I declare them for Income Tax

                Expenses were all incurred, the issue is I used the HMRC guidelines for claiming without submitting receipts for meals etc (all within the umbrellas rules & procedures)

                (actually it was 2 back to back contracts, 6 months total)

                I’m really trying to find out if this is a real ‘Law’ or just another made up rule the CSA have come up with because I haven’t succumbed to their demands

                Comment


                  #9
                  Originally posted by Magpie252 View Post
                  OK, excuse my ignorance, but why is being reimbursed legitimate business expenses through an umbrella any different to being reimbursed as a perm employee?, I thought that was the whole point of using an umbrella. And why should I declare them for Income Tax

                  Expenses were all incurred, the issue is I used the HMRC guidelines for claiming without submitting receipts for meals etc (all within the umbrellas rules & procedures)

                  (actually it was 2 back to back contracts, 6 months total)

                  I’m really trying to find out if this is a real ‘Law’ or just another made up rule the CSA have come up with because I haven’t succumbed to their demands
                  I presume you are talking about Mal's comment. It's all about permanent and temporary work places. You cannot claim expenses at a permanent work place, only if it is temp (i.e. working off site). By only working for one client (regardless of number of extensions) that client is your permanent workplace. Travel and food therefore is no a business expense, it's commuting to your place of work so not claimable.

                  Here are some links explaining..

                  http://www.umbrellacompare.com/guide...36e20fd96.html

                  http://www.contractoruk.com/umbrella..._confused.html

                  and so on....
                  Last edited by northernladuk; 10 January 2014, 13:29.
                  'CUK forum personality of 2011 - Winner - Yes really!!!!

                  Comment


                    #10
                    Originally posted by Magpie252 View Post
                    OK, excuse my ignorance, but why is being reimbursed legitimate business expenses through an umbrella any different to being reimbursed as a perm employee?, I thought that was the whole point of using an umbrella.
                    If you have a permanent place of work, then you can't claim travel and subsistence (apart from subsistence in a very limited range of circumstances). If you only have one location that you work at, then that is your permanent place of work. Any incurred once you submit your notice to the umbrella cannot be claimed, because the workplace is no longer temporary - it is now your only place of work.

                    Originally posted by Magpie252 View Post
                    And why should I declare them for Income Tax
                    You don't need to declare the expenses, sorry. You need to include the expenses which were illegally claimed as income, because that is what they are.

                    Originally posted by Magpie252 View Post
                    Expenses were all incurred, the issue is I used the HMRC guidelines for claiming without submitting receipts for meals etc (all within the umbrellas rules & procedures)
                    As an aside, just because the umbrella says that you can claim £25 a day for meals that didn't happen, doesn't mean that HMRC will take the same line. This has been done to death on here before. If you incurred £25 a day for meals, and have the receipts to prove it, and the expense is claimable (see above), then great; if not then you are in trouble.

                    Originally posted by Magpie252 View Post
                    (actually it was 2 back to back contracts, 6 months total)
                    If the location is the same, then it's a permanent place of work. If the location is similar, then it's a permanent place of work (same as the 24 month rule logic).

                    Originally posted by Magpie252 View Post
                    I’m really trying to find out if this is a real ‘Law’ or just another made up rule the CSA have come up with because I haven’t succumbed to their demands
                    I don't think it's anything that the CSA have made up - if the expenses should have been classed as income, then you need to 'fess up to everyone and take the hit that is coming.
                    Originally posted by MaryPoppins
                    I hadn't really understood this 'pwned' expression until I read DirtyDog's post.

                    Comment

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