Umbrella Company Expenses - What's the real deal?
Well, to be honest with you, there isn't a deal. If you
have decided to use an Umbrella Company or are thinking about it,
it is useful to know that you can claim expenses and despite this
being an appealing aspect to an Umbrella Company, please don't get
carried away - there are some important basics you need to be aware
of:
- You can only claim expenses that you have actually paid out for
(despite what you may have heard)
- They must have been incurred wholly, exclusively and
necessarily as a result of fulfilling a contract
- You must keep receipts (evidence of expenditure) - you may not
necessarily have to send these to your umbrella for things like
subsistence for example
It is more important than ever to claim expenses legitimately as
HMRC have clamped down hard on Umbrella Companies and the way in
which they deal with expenses. Choosing the right company to
use is now a much trickier process as you really do need to ensure
that you're not choosing one which is going to get you into hot
water! It is at the end of the day, ultimately your
responsibility. If HMRC do discover there to be issues with
your expenses, it will be you that ends up with the bill to rectify
it.
You must do your research and don't be easily fooled. Be
extremely wary of those companies offering surprisingly high
retention rates on your money. If it sounds like it's too
good to be true - it will be. Also, it's worth pointing
out that dispensations are a way of reducing the Umbrella Company's
administration - they are not a way of getting you more money so
please don't believe this if you come across it in your quest to
find the right one!
If you're unsure what you can and can't claim for, please click
here to read our full and detailed "Guide to Business Expenses".
If you feel disappointed that using an Umbrella Company doesn't
present more of an advantage with regards to the claiming of
expenses, you shouldn't be. Umbrella Companies are still a
great option to consider - the fact that you can get started
straight away with very little hassle and administration involved
is a huge bonus. Also, you don't have to worry about any
taxation or financial matters as this will all be dealt with by
your chosen Umbrella Company. Umbrella Companies are still
one of the most popular options for contractors today.
So, if you're thinking of using an Umbrella Company but wanted
to know exactly what the situation was with regards to expenses, we
hope this short article has clarified matters for you, but please
do not hesitate to contact Nasa's friendly experts if you would
like further information or advice about Umbrella Companies and
expenses. You may also wish to discuss our very own Umbrella
Company, "Nasa Umbrella" in more detail!