A Guide to Business Expenses
This guide has been designed to give you a good
understanding about business expenses, how to claim them and what
expenses you can genuinely claim to help maximise your take home
pay.
Who can claim business expenses…
Firstly, it is probably most useful to explain who can claim
expenses and who can't. To claim business expenses you must
be working at a temporary workplace.
For this to be the case;
You will need to have a reasonable expectation that you
will be working more than one assignment through
Nasa Umbrella
Or;
You have not been, or do not expect to be, at the
workplace for more than 24 months
So in plain English - if you are planning on working more than
one job through Nasa Umbrella then you can claim expenses from the
start.
However if you are only planning to work for just one
assignment, or you have exceeded, or expect to exceed 24 months at
your current client, then you won't be able to claim expenses for
tax relief.
Why does claiming expenses help?
Claiming business expenses through an umbrella company is
beneficial because business expenses will help to reduce the amount
of tax and NI that you pay.
When you claim business expenses, you won't be reimbursed these
costs on top of your salary. Rather, you don't pay any PAYE
or NICs on the amount that you claim. This is what as known
as receiving tax relief on your business expenses and is one of the
main advantages of using an Umbrlela Company. By claiming
genuine business expenses, you can increase your take home pay.
Word of warning…
HMRC require that you keep a valid receipt to prove that you
have incurred your expense wholly and inclusively in the course of
your duties.
As a responsible umbrella company, Nasa Umbrella asks that you
submit copies of these receipts, where necessary, so
we can verify that your claim is valid. If HMRC did audit you
at any point, you would be responsible for any tax repayments due
to non-valid expenses having been claimed.
Also, if you claim business expenses and do not meet the
qualifying criteria then we may be required by HMRC to claim them
back from you by the end of your employment.
What expenses can I claim?
The below section outlines which expenses are claimable as an
employee of Nasa Umbrella company. Although not an exhaustive
list, this covers the vast majority of expenses that are allowable
to umbrella company employees.
Travel
Mileage
For travel between your home and temporary workplace
by car, you can claim £0.45p per mile for the first 10,000 miles
per tax year. Once past this threshold the rate drops to £0.25p per
mile. For using a motorcycle the rate is £0.24p per mile and if you
are using leg power and cycling to work, you can claim a generous
£0.20p per mile! You will need to keep any fuel receipts and send
them in with any mileage claim you make.
Public Transport
If you use public transport to get to your
workplace, you may claim this for tax relief. Nasa will need to see
a copy of any tickets or receipts at point of purchase in order to
process these claims. If your claim is an Oyster card, either an
online statement or puchase receipt can be accepted as proof of
purchase.
Taxis
Taxi costs for
travel between home and workplace or on behalf of your client can
be claimed for tax relief. A supporting receipt will be required
for each claim.
Bridge or Tunnel tolls
If these costs
are incurred on your journey to and from work, they are claimable.
Please provide proof of purchase where possible as we do appreciate
that it may not always be possible to obtain this.
Parking
Parking charges
can be claimed with a valid receipt/ticket for the period being
claimed.
Subsistence
Subsistence
Allowances - Benchmark Scale Rate
Nasa Umbrella operates a Benchmark Scale Rate system
for subsistence under the terms of our dispensation with HMRC. This
system allows you to make a claim for subsistence costs without
needing to submit receipts to Nasa Umbrella to support your claim.
The following allowances may be claimable.
1
Meal Rate
A rate of up to
£5 can be claimed where you have been away from home continuously
for at least 5 hours and incurred a cost on a meal.
2 Meal Rate
A rate of up to
£10 can be claimed where you have been away from home continuously
for at least 10 hours and incurred a cost on a meal or meals.
Breakfast Rate - £5 for early starters
Allowances may
also apply to breakfast and evening meals where costs are incurred
as a result of irregular early starts or late finishes. Where you
start early or work late on a regular basis - these are not
allowable. Breakfast Rate (irregular early starters ONLY) A rate of
up to £5 may be paid where you leave home earlier than usual, and
before 6 am and you incur a cost on a meal away from home.
Evening Meal Rate - £15 per evening meal
Allowances may also apply to breakfast and evening
meals where costs are incurred as a result of irregular early
starts or late finishes. Where you start early or work late on a
regular basis - these are not allowable. Evening Meal Rate
(irregular late finishers ONLY) A rate of up to £15 may be paid
where you may have to work later than usual, finishing after 8 pm
and you buy a meal that you would usually have at home.
Accommodation
Hotel or Bed and Breakfast
If you stay in a hotel or B&B during the week,
then providing a receipt is produced you can claim these costs as
expenses. As you are away from home, you may also claim a £5 per
diem expense cost for incidentals without the need to provide a
receipt to Nasa.
Rented Accommodation
If you rent accommodation (room, flat etc) and
return home each weekend, you may claim 5/7ths of the cost of the
weekly rental cost for tax relief. We'd also need to see a receipt
for each claim that you make. If you completely relocate to be
closer to your new place of work, you will be unable to claim the
cost of accommodation for tax relief as this is deemed to be your
primary place of residence.
Other Expenses
Business Telephone Calls
Any business calls made from your personal mobile
phone or landline can be claimed for tax relief. We would need to
see an itemised bill with the business calls highlighted.
Postage and Stationary
Postage and
stationary costs are claimable when working from home and valid
receipts must be provided.
Working from Home Allowance
If working from home, a £3 per week allowance can be
claimed.
Staff Training
You may claim the cost of your training courses if
an absolute requirement for your current role through Nasa
Umbrella. To claim you will need to provide a receipt for the full
cost of the course and a covering letter from your client stating
that the course is essential to your current assignment.
Professional Subscriptions
HMRC allow you
to claim the costs of professional subscriptions to many bodies.
They are listed as approved organisations and the list can be found
here at HMRC's website: http://www.hmrc.gov.uk/list3/list3.pdf
Eye Tests for VDU users
For those using
VDUs, a sight test may be claimed up to the value of £15 as long as
a valid receipt is provided.
Glasses - Frames & Lenses
Where you may be required to purchase glasses for
VDU use, the cost of both frames and lenses are claimable for tax
relief.
Sundry Items
As part of your role, you may need to purchase
computer hardware/software, or other capital items to carry out the
works. As long as these costs meet certain criteria, they can be
reclaimed for tax relief through Nasa Umbrella Ltd. The criteria
that must be met are: The items must be by law wholly, necessarily
and exclusively for your work. You will require a statement from
your client to confirm this; If the client authorises this as
necessary expenditure to carry out the work, you will need to
obtain a receipt for the purchase of the item, which must be sent
to Nasa Umbrella with a completed expense claim form; You will then
receive tax relief for the value of the item, however as Nasa
Umbrella then becomes owner of the asset, we are required to deduct
a 10% security deposit; As such, Nasa Umbrella will withhold 10% of
the value of the item which is what we will retain if you wish to
keep the item after the contract is finished. This is the 'buy
back' value of the item.
Please do contact us should you have any
further questions at all about expenses.