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Umbrella Companies And Unreceipted Expenses

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Guest mattsta1964

I was chatting with a fellow contractor at work, earning the same rate, and he was telling me his umbrella company pays him a minimum wage salary and all his other income as unreceipted expenses. He showed me his pay slip and he took home over 1000 quid per month more than me for the same amount of work. I nearly choked!

Is it really poissible to get away with this without incurring the wrath of Inland Revenue?????????????

Does anyone on the forum know anything about this?

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I was chatting with a fellow contractor at work, earning the same rate, and he was telling me his umbrella company pays him a minimum wage salary and all his other income as unreceipted expenses. He showed me his pay slip and he took home over 1000 quid per month more than me for the same amount of work. I nearly choked!

Is it really poissible to get away with this without incurring the wrath of Inland Revenue?????????????

Does anyone on the forum know anything about this?

I wouldn't have thought so - I have contracted using reputable umbrella companies, and they never did anything like that (I'm sure they would if they could!). If you (or anyone else) finds out post it here and let us all know! B)

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Guest mattsta1964

That's only the half of it. The cheeky monkey is claiming child benefit for his 3 sproggs on top seeing as his actual pay is minimum wage. I'd screw Gordon Brown for every penny I could get but I'd deffo draw the line at claiming benefits on top. Talk about having yer cake!

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I was chatting with a fellow contractor at work, earning the same rate, and he was telling me his umbrella company pays him a minimum wage salary and all his other income as unreceipted expenses. He showed me his pay slip and he took home over 1000 quid per month more than me for the same amount of work. I nearly choked!

Is it really poissible to get away with this without incurring the wrath of Inland Revenue?????????????

Does anyone on the forum know anything about this?

I believe the Revenue used to have 'special arrangements' with these umbrella outfits but I don't think unreceipted expenses were one of them. Sounds like a spot of fabrication, on his behalf.

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I was chatting with a fellow contractor at work, earning the same rate, and he was telling me his umbrella company pays him a minimum wage salary and all his other income as unreceipted expenses. He showed me his pay slip and he took home over 1000 quid per month more than me for the same amount of work. I nearly choked!

Is it really poissible to get away with this without incurring the wrath of Inland Revenue?????????????

Does anyone on the forum know anything about this?

You'd have to ask the IR.

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Guest mattsta1964

I believe the Revenue used to have 'special arrangements' with these umbrella outfits but I don't think unreceipted expenses were one of them. Sounds like a spot of fabrication, on his behalf.

I say his pay slip and he showed me his online account with the umbrella company so he isn't lying.

visit www.greenlantern35.co.uk

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I was chatting with a fellow contractor at work, earning the same rate, and he was telling me his umbrella company pays him a minimum wage salary and all his other income as unreceipted expenses. He showed me his pay slip and he took home over 1000 quid per month more than me for the same amount of work. I nearly choked!

Is it really poissible to get away with this without incurring the wrath of Inland Revenue?????????????

Does anyone on the forum know anything about this?

Yes, umbrella companies do have arrangements with Inland Revenue. They can claim aprox £25-£30 per day in unreceipted expenses, which the then pass on to you.

I used one of these umbrella companies a few years ago, when I was an IT contractor. The way it worked was the £25-30 per day for food plus whatever expenses are for travel. This then gets re-imburesed as expenses, and it consequently reduces your PAYE tax that the umbrella company deduct from your wages

In 1st week, the umbrella co asked me to provide a few days of recipts as an example to Inland Revenue. Its quite hard to eat all the food to cover £25-30 for a working day:

eg.

Expensive Coffee at station £4

Another coffee and a fancy breakfast at London station £10

£10 on lunch

£5 snack at station [to keep you going till you get home]

Add on taxi to and from station to your home [£10] , plus a peak-rate daily travel-card [£35 but after your 'example' expenses, buy the £70 weekly one]

It all adds up [£75-ish per day] and you and and The Fat Controllor Brown [not!] are laughing

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Guest mattsta1964

Yes, umbrella companies do have arrangements with Inland Revenue. They can claim aprox £25-£30 per day in unreceipted expenses, which the then pass on to you.

I used one of these umbrella companies a few years ago, when I was an IT contractor. The way it worked was the £25-30 per day for food plus whatever expenses are for travel. This then gets re-imburesed as expenses, and it consequently reduces your PAYE tax that the umbrella company deduct from your wages

In 1st week, the umbrella co asked me to provide a few days of recipts as an example to Inland Revenue. Its quite hard to eat all the food to cover £25-30 for a working day:

eg.

Expensive Coffee at station £4

Another coffee and a fancy breakfast at London station £10

£10 on lunch

£5 snack at station [to keep you going till you get home]

Add on taxi to and from station to your home [£10] , plus a peak-rate daily travel-card [£35 but after your 'example' expenses, buy the £70 weekly one]

It all adds up [£75-ish per day] and you and and The Fat Controllor Brown [not!] are laughing

This guy is claiming about £2500 per month in unreceipted expenses!!!!!!!!!!! I can't believe any reputable umbrella company would sanction that. As a contractor, you are ultimately responsible for your own affairs so I reckon this chap could still end up in serious trouble if he is investigated even if he thinks the umbrella company's behavior is above board. If you go to the net salary calculator on the greenlantern website and plug in an hourly rate, the result does seem suspiciously dodgy

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I've been through quite a few umbrella companies and aside from Prosperity4 these are the worst. Just got a bill from the IR for £108 tax that I underpaid due to their miscalculations.

You can normally claim back a daily subsitence of about £25 unreceipted, but all other claims must have a receipt. What they do is offset the expenses you claim against your wage, therefore you pay less tax because expenses are non tax deductable.

If he is indeed claiming without receipts then the onus will be on him when the IR innevitably catch up with him. I do find it hard to believe he is claiming without receipts though.

Edited by Bifta

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I was chatting with a fellow contractor at work, earning the same rate, and he was telling me his umbrella company pays him a minimum wage salary and all his other income as unreceipted expenses. He showed me his pay slip and he took home over 1000 quid per month more than me for the same amount of work. I nearly choked!

Is it really poissible to get away with this without incurring the wrath of Inland Revenue?????????????

Does anyone on the forum know anything about this?

Having just gone thought a nice IR investigation all I can say is 'he's f(cked'

They were ultra ******** over expenses and wanted the previous 5 years mobile bills, took 5 months to analyse contracts and were generally bastewards.

Overall it went well and in 5 years I unpayed tax for about £40, so they didnt claim it back.

I'm happy but I feel sorry for people like this, if they do catch up with him they'll take everything he owns :<

Personally I pay min wage + sane expeneses (travelling, mobile and any hotel costs) + dividend. I take on short term contracts so usually I'm not IR35. But I keep a nice IR35 pot in high interest accounts just incase.

I can spend my 5 year previous pot now :)

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no umbrella company has any special or unique arrangements with the IR - Prosperity 4 U made a point of trying to sell me their services once by claiming to have such a special arrangement but when we went through it in detail, it turned out that I had got away with claiming for expenses that even they wouldn't allow!

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Having just gone thought a nice IR investigation all I can say is 'he's f(cked'

They were ultra ******** over expenses and wanted the previous 5 years mobile bills, took 5 months to analyse contracts and were generally bastewards.

Overall it went well and in 5 years I unpayed tax for about £40, so they didnt claim it back.

I'm happy but I feel sorry for people like this, if they do catch up with him they'll take everything he owns :<

Personally I pay min wage + sane expeneses (travelling, mobile and any hotel costs) + dividend. I take on short term contracts so usually I'm not IR35. But I keep a nice IR35 pot in high interest accounts just incase.

I can spend my 5 year previous pot now :)

You sound like you've got your head screwed on, unlike mattsta's mate.

Umbrella companies are in fierce competition with each other, so some break ranks on this sort of thing, but they sail very close to the wind.

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Guest mattsta1964

You sound like you've got your head screwed on, unlike mattsta's mate.

Umbrella companies are in fierce competition with each other, so some break ranks on this sort of thing, but they sail very close to the wind.

Yeah. I'm not gonna fall into the same trap. I reckon he will be absolutely screwed if he is investigated. And claiming child benefit on top is just disgraceful. That's having yer cake with double chocolate topping and 2 cherries on top!

The greatest crime in the UK ain't murder, rape or robbery...............It's diddling the taxman!

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Yeah. I'm not gonna fall into the same trap. I reckon he will be absolutely screwed if he is investigated. And claiming child benefit on top is just disgraceful. That's having yer cake with double chocolate topping and 2 cherries on top!

The greatest crime in the UK ain't murder, rape or robbery...............It's diddling the taxman!

Why is our resident tax and law expert Rachman, not commenting on this one. This should be his domain. We eagerly await his comments.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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