Umbrella companies are flourishing in popularity at the moment and this is something that shows absolutely no signs of slowing down. This article aims to give further clarity regarding what expenses you can claim when utilising a top umbrella company. Read on to discover more…
Accommodation, food and drink
If you are staying in a hotel or any other type of accommodation because of work duties then you are able to claim this as an expenses alongside the food and meal you consume whilst there. There is no set allowance yet the costs must be reasonable.
You can claim equipment as an expense as long as you provide evidence that it is necessary for the work you are carrying out.
If you have a temporary place of work or need to travel somewhere for business purposes then you can claim this as an expense. You will experience a rate of 45p for every mile for the initial 10,000 miles in a fiscal year. After this it will reduce to 25p. If you go to your premises as a passenger in a car you can actually claim 5p for every mile. If you use public transport then make sure you have a valid receipt in order to claim this.
You cannot claim for ordinary work clothing. However, you can claim for any protective clothing or clothing that does relate to the performance of your work and cannot be worn outside of the workplace.
You can claim training courses as an expense, however they have to be wholly relevant to your line of work.
And finally, pensions are one hundred per cent allowable against all tax. It is recommended that all contractors have a pension. You will also be able to cut down on your tax and NI contributions if you do.
There is a vast selection of different things you can claim as an expense if you are a contractor and use an umbrella company. Nonetheless, as you can see; there are stringent criteria in place as well and thus this is something you need to be mindful of.
Summary –One of the reasons why a lot of people use umbrella companies is so they can claim expenses they wouldn’t be able to when caught by the IR35 tax. This article reveals what expenses can be claimed with a top umbrella company.