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Umbrella Company Expenses
Umbrella Companies offer freelance contractors a great way to cut down on contract administration while also improving net take home pay. They do this by allowing freelance contractors to claim business expenses incurred during the contract on a tax and national insurance free basis; most such expenses are contingent upon the ‘Site Based Rules’.If you have a contract and would like to discuss an umbrella company solution or you would just like to know more about claiming business expenses call Commonwealth Contractors now on 0800 294 4388 or Submit your details and we will get right back to you.
Wholly, exclusively and necessarily incurred business expenses
The important thing to remember when claiming business expenses is that the expense must have been incurred wholly, exclusively and necessarily in the performance of your duties. It is not possible under any circumstances to claim a personal cost of living expense.Receipts for business expenses must be kept in order to prove that the expense was actually incurred. Were HM Revenue and Customs to undertake a PAYE Investigation and decide to question your business expenses you would need to provide receipts to prove the claim. If you were unable to provide receipts you could wind up paying backdated income tax and national insurance on the value of the expense.
Business Expenses normally allowed by Umbrella Companies
Relocation Expenses
You may (under certain circumstances) be able to claim the cost of relocation expenses if you’re an Expat who has relocated from abroad. To find out more call Commonwealth Contractors now on 0800 294 4388Site Based Travel
Umbrella Companies normally allow you to claim the entire cost of getting to and from the temporary site each day. Site based travel expenses generally include:- Public Transport expenses:
Train, Bus, Tube, Tram, Taxi expenses etc are normally claimable so long as you can show a valid receipt. - Business Mileage expenses:
Business Mileage is claimed further to agreed claim rates:- Car: 40 pence per mile for the first 10,000 miles, 25 pence thereafter
- Motorcycle: 24 pence per mile
- Bicycle/Foot: 20 pence per mile
- £95 per night for Accommodation Inside London, and
- £75 per night for Accommodation Outside London
- A contribution of up to £500 for a laptop or desktop computer (to be used as a home based office)
- A contribution of up to £500 for necessary software
- IT Hardware such as Printers, Scanners, USB Memory Sticks etc
- Training Software (where a valid business need can be demonstrated)
Site Based Subsistence
The cost of feeding yourself is not a business expense. However, where your temporary remote work leads to higher costs some of these business expenses may be claimed.The level of subsistence claimed normally depends upon the length of time you spend away from home each day. Basic levels of subsistence are uplifted depending on whether you leave home early or remain at the client site until late. Receipts must be provided to prove the claim. The table below details typical levels deemed to be reasonable
| Inside London | Outside London | |
|---|---|---|
| Basic Rate | £7.00 per working day | £6.00 per working day |
| Morning Uplift | £6.00 | £5.00 |
| Evening Uplift | £11.00 | £10.00 |
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