Umbrellas and expenses post April Umbrellas and expenses post April
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  1. #1

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    Default Umbrellas and expenses post April

    So my current contract is under review by end client and just in case they decide to put me inside IR35 (despite qdos and CEST both saying outside) I decided to have a look at some umbrella calculators.

    One of them called me back and I said I was looking at umbrella in case of an inside ir35 determination.

    We went through the sales pitch and got to a take home weekly number.

    So far so good.

    I was told that I would fall outside SDC so post April I would be able to claim mileage from home to client site - works out about £200 a week.

    I know it is just coming off the gross day rate bc so there is less to push through PAYE etc as the end client won’t be paying the cost.

    I thought come April I would not be able to claim mileage even at an umbrella (no 24 month concerns as new site
    In different part of uk).

    As part of the inside ir35 determination would be SDC how can umbrella say SDC would not be relevant?

    So the actual question is - post April will I be able to claim mileage when working under an umbrella (when end client will NOT be paying any expenses).
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  2. #2

    Default Umbrellas and expenses post April

    No

    Any other questions ?

    How can an umbrella pay you £hundreds in expenses for say £30 they charge


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  3. #3

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    Default Umbrellas and expenses post April

    I’m afraid not. The only expenses/mileage you can claim is when you need to be at multiple sites in order to fulfill your contract* Home to work and back doesn’t count.

    (*And that would be paid by the end client)
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    Did they also tell you that you'll be in the highest risk group for possible retro action staying at a client as inside when your were outside previously?

    Mind asking who the brolly was that said you'd be outside SDC? Don't have to tell us but make sure is FSCA accredited or about to be. Some not so above board umbrellas around. Give Lucy a ring at Clarity Umbrella if you are at all unsure about a brolly.
    Last edited by northernladuk; 10th February 2020 at 23:16.
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  5. #5

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    Quote Originally Posted by JonSmile View Post
    So my current contract is under review by end client and just in case they decide to put me inside IR35 (despite qdos and CEST both saying outside) I decided to have a look at some umbrella calculators.

    One of them called me back and I said I was looking at umbrella in case of an inside ir35 determination.

    We went through the sales pitch and got to a take home weekly number.

    So far so good.

    I was told that I would fall outside SDC so post April I would be able to claim mileage from home to client site - works out about £200 a week.

    I know it is just coming off the gross day rate bc so there is less to push through PAYE etc as the end client won’t be paying the cost.

    I thought come April I would not be able to claim mileage even at an umbrella (no 24 month concerns as new site
    In different part of uk).

    As part of the inside ir35 determination would be SDC how can umbrella say SDC would not be relevant?

    So the actual question is - post April will I be able to claim mileage when working under an umbrella (when end client will NOT be paying any expenses).
    Hi JonSmile

    It's interesting that the umbrella company could determine your SDC status from a sales call.

    A proper umbrella would go through a fact finding exercise to determine different factors, AND THEN corroborate these with the end client to ensure that they feel the same way. But this would all be a waste of time if the client did an IR35 assessment and found you inside-IR35, as if you're found inside then you're going to be (in all likelihood) under SDC.

    Thanks


    Zeeshan

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    Quote Originally Posted by JonSmile View Post
    So my current contract is under review by end client and just in case they decide to put me inside IR35 (despite qdos and CEST both saying outside) I decided to have a look at some umbrella calculators.

    One of them called me back and I said I was looking at umbrella in case of an inside ir35 determination.

    We went through the sales pitch and got to a take home weekly number.

    So far so good.

    I was told that I would fall outside SDC so post April I would be able to claim mileage from home to client site - works out about £200 a week.

    I know it is just coming off the gross day rate bc so there is less to push through PAYE etc as the end client won’t be paying the cost.

    I thought come April I would not be able to claim mileage even at an umbrella (no 24 month concerns as new site
    In different part of uk).

    As part of the inside ir35 determination would be SDC how can umbrella say SDC would not be relevant?

    So the actual question is - post April will I be able to claim mileage when working under an umbrella (when end client will NOT be paying any expenses).
    It would be a (slightly) brave umbrella company who paid expenses on an SDC basis when you are inside mainly because while they shouldn't (IR35 applies so SDC definitely does) it's not their money they are gambling it's yours.

    And I use the word slightly as it will be:

    1) You will be the person saying SDC doesn't apply,
    1b) HMRC will say it does and
    2) you will be the person paying the tax due on those expenses alongside penalties were HMRC that way inclined.

    Go back to the umbrella company and ask if they will indemnify you regarding tax on the expenses and provide a guarantee of payment (deed of trust on the director's own property is the usual approach).

    Now were the end client to be using a blanket approach you may be able to show that without a determination you are not subject to SDC. However, I can't imagine an end client would appreciate that approach and would probably treat it as misconduct and breach of contract...

    Oh and be warned there are a lot of useless umbrella companies promising a lot of things that really won't do you any favours. Offering expenses due to SDC misunderstandings is one, paying deemed payments to facilitate SDS appeals is another. Both may work but both would result in the end client firing you instantly.
    Last edited by eek; 11th February 2020 at 09:30.
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  7. #7

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    Quote Originally Posted by GhostofTarbera View Post
    No

    Any other questions ?

    How can an umbrella pay you £hundreds in expenses for say £30 they charge


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    Hi

    The expenses reduce the taxable pay (down to a minimum of NMW), they're not paid as a like-for-like sum. It's always been this way through umbrella, even before the April 2016 T&S changes.

    Thanks


    Zeeshan

  8. #8

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    I was told by HMRC following the introduction into the Public Sector...
    "anyone deemed inside IR35 is highly unlikely to pass an SDC test, as such no expenses would be allowable."

  9. #9

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    Quote Originally Posted by lucyclarityumbrella View Post
    I was told by HMRC following the introduction into the Public Sector...
    "anyone deemed inside IR35 is highly unlikely to pass an SDC test, as such no expenses would be allowable."
    Except for multi-site workers going to several sites as part of their assignment, in which the umbrella can process mileage through payroll because AMAPS wasn't affected by the change in salary sacrifice rules

    Thanks


    Zeeshan

  10. #10

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    Quote Originally Posted by lucyclarityumbrella View Post
    I was told by HMRC following the introduction into the Public Sector...
    "anyone deemed inside IR35 is highly unlikely to pass an SDC test, as such no expenses would be allowable."
    That makes sense. But a (potentially significant) percentage of people moving an Umbrella are not Inside IR35.

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