4 Basics of an Umbrella Company

Umbrella Company - The Basics

Do you really know why some umbrella companies are better than others? And why do umbrella companies all seem to do things differently from one another?

Industry leading authority on umbrella companies, and MD of Springboard Umbrella Company, Marcus Glover, explains what umbrella companies do and how contractors can get the most out of them.

The following useful articles explain in clear & simple terms exactly what an umbrella company does, what to look out for and how not to pay over the odds!

Springboard Umbrella Company is an independent business that takes the hassle out of contracting.

• How Much Should you Pay for an Umbrella Company?
• Umbrella Company Mistakes
• Why you should Complain to your Umbrella Company
• Umbrella Company Business Expenses
• How to Choose an Umbrella Company
• Why Should I have to Pay Employers National Insurance?
• Alternatives to using an Umbrella Company
• Umbrella Company Q n A

Springboard Umbrella Company is committed to keeping you compliant.  Expense claims must comply with these guidelines.

Travel and Subsistence

The expense of travelling, and associated subsistence, is allowable where necessarily incurred in doing the job or travelling to the job where the workplace it “temporary”.

It is expected that your engagement with Springboard Umbrella Company will involve you working at a succession of different workplaces and as long as you do not expect to be at any one workplace for more than 24 months travelling to and from the workplace is normally allowable.

You will be required to confirm that it is your intention to work at a succession of workplaces.

Motor Vehicle Expenses

The expense claim will require details of the journeys undertaken and the mileage. It is important that you keep a record of the running total as mileage is reimbursed at a rate of 40p per mile for the first 10000 miles and 25p per mile thereafter.

Passenger allowance is available at 5p per mile.

Other Motor Related Expenses

The mileage rate includes the running casts of the vehicle so there is not claim for fuel, repairs, tax, insurance etc but car parking, bridge/tunnel tolls, congestion charge etc are allowable.

Parking etc fines are NOT allowable.

Use of Bicycle

Reimbursement at 20p per mile is available.

Day Subsistence

We eat in order to live not in order to work but if the duties of your employment dictate that you spend more on a meal than would otherwise have been the case then the meal is allowable for tax purposes. Springboard Umbrella use the HMRC approved benchmark scale rates for day subsistence.

Full information on these can be found at http://www.hmrc.gov.uk/manuals/eimanual/EIM05231.htm

The relevant criteria for the benchmark scale rate is that the workplace must qualify as temporary for tax purposes, you must be away from home for the required amount of time and you must spend more on food than would otherwise have been the case.

Overnight Subsistence

If it is necessary for you to stay away overnight then the cost of accommodation and associated meals is allowable and will be reimbursed to the extent that actual expenditure has been incurred.

There is available a further £5 per night to cover incidental expenditure e.g. laundry.

Expenses other than Travel and Subsistence

When considering these expenses in addition to having to be “necessary” there is the further test –“wholly and exclusively” and this is strictly applied by HMRC except where it is possible to identify a business proportion.

Clothing

We all have to wear clothes for warmth and decency so for clothing to be wholly, exclusively and necessarily in the performance of the duties of the employment any claims are limited to protective clothing such as boots, helmets, goggles, overalls, protective gloves.

If you are working outside and need warm/waterproof clothing it is not an expense incurred in the performance of the duties – warm/waterproof clothing is required by all of us if we venture out on a cold wet day. It is important then when claiming for clothing the description on the claim form is accurate.

Tools

Tools necessarily used in connection with your employment are allowable.

Telephone

Business calls are allowable – private calls are not allowable.

Training Courses

Training courses do not normally qualify as an allowable expense; however, where the expense incurred is reimbursed by the employer the taxing acts remove any possible tax charge on the employee.

The training course must be work related.

Professional Fees

Professional fees - will be reimbursed provided the expense is work related and approved by HMRC.

Miscellaneous office expenses

Pens, paper, printer ink.

Entertaining

In certain restricted circumstances.

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