What is a business expense?
To qualify as a genuine business expense, the expense must be incurred wholly, exclusively and necessarily in performing the duties of an assignment.
Typical business expenses include:-
- Travel and Subsistence
- Secondary Accommodation
- Tools, Equipment, Postage, Stationery, Books etc Professional fees and subscriptions
- Eye tests
- Protective Clothing
- Telephone & Internet Usage
- Computer consumables, hardware and software Training Courses
Expenses can be 'chargeable' or 'non-chargeable'.
Chargeable expenses are those that you have incurred whilst on a work assignment that the client has agreed in advance to pay. Non-chargeable expenses are those that you have incurred whilst on a work assignment that the client has NOT agreed to pay.
Am I entitled to claim business expenses?
This will depend on the details of your particular assignment. Our staff will discuss your assignment with you and let you know if you are entitled to claim.
Am I eligible for tax relief on those business expenses?
The rules on expenses are relatively complex and you should speak to one of our staff before making a claim. Effective from April 2016, only those Umbrella workers who are not under the supervision, direction and control (SDC) of their client are able to claim for travel and subsistence expenses. The exemption being those classed as "mobile workers". Following this change of legislation most umbrella contractors are now deemed to be under SDC and as such, cannot claim expenses.
These rules often require various assessments to be carried out prior to approving expense claims.
These may include an assessment to determine your SDC status as well as an assessment to determine whether your workplace is classed as a temporary workplace or a permanent one. When you join ELT, you will be given log in details to our online portal, where you will be able to submit expense claims, upload receipts and receive status information regarding your claim. You will be given an expenses policy and guidance on how to claim and our staff are on hand to answer any questions you have. Approved expense claims are paid with your regular pay, i.e. weekly, fortnightly or monthly, depending on your pay cycle.
How do I claim?
You will be given log in details to our online portal - The Vault, where you will be able to submit expense claims, upload receipts and receive status information regarding your claim. The Vault contains an online user guide which shows you how to claim and our staff are on hand to answer any questions you have.
When will I receive payment or tax relief on my expense claims?
For ‘chargeable’ expenses -
Approved expense claims are paid with your regular pay, i.e. weekly, fortnightly or monthly, depending on your pay cycle.
For ‘non-chargeable’ expenses -
Where SDC does not apply; approved expense claims are paid with your regular pay, i.e. weekly, fortnightly or monthly, depending on your pay cycle. Tax relief is given at point of payment.
PLEASE NOTE: Where SDC applies; approved expense claims can be submitted to HMRC at the end of the tax year, either on ‘Tax relief for expenses of employment form – P87’ or a self-assessment tax return.
Travel costs can be claimed for all business-related travel, including travel between various site locations. You may also be able to claim the cost of travel between your home and the site location, subject to site-based rules. Travel costs can include; Public transport fares, Taxis fares, Air travel fares, Mileage, Car hire and incidental expenses such as toll fees, congestion charges and car parking.
Subsistence costs are meal expenses that can be claimed alongside all business-related travel. This includes travel to/from your home and the temporary workplace, subject to site-based rules.
In order to claim for the cost of using your own private vehicle for business-related travel, you will need to make a claim for mileage using the rates shown below. These are in accordance with approved rates published by HM Revenue & Customs. For miles travelled by Car, claim 45p per mile for the first 10,000 business miles per annum, 25p per mile for over 10,000 miles per annum. For miles travelled by Motorbike, claim 24p per mile for all business miles. For miles travelled by Bicycle, claim 20p per mile for all business miles.
Site-Based Rules for Travel and Subsistence
If you expect to work on a number of temporary assignments across a series of temporary workplaces then you may be able to claim for the cost of travel to/from your home and the temporary workplace, as well as the costs for necessary subsistence (meals). There are a number of rules governing what constitutes a temporary assignment and a temporary workplace, each assignment will need to be assessed to determine whether a claim can be made.
If an overnight stay is required, the costs of the stay can be claimed in conjunction with rules for claiming business-related travel. Costs can include, Hotel stays, Bed & Breakfast stays and short-term tenancy agreements.
Tools, Equipment, Postage, Stationery, Books etc.
Claims for tools, equipment, postage, stationery items, technical journals, industry magazine subscriptions and books are allowable as long as they are used wholly, necessarily and exclusively in the performance of your duties.
Professional fees and subscriptions
If your work requires your registration with a professional body or to become a registered member of a particular organisation or requires a special licence then you may be able to claim.
If you are required to continually use a VDU as part of your normal duties you will be able to claim for the cost of an eyesight test carried out by a qualified optician.
Claims for the purchase of protective clothing are allowable as long as they are an essential requirement in carrying out your assignments. Protective clothing includes overalls, steel toe capped boots, helmets and Hi-Vis jackets. Laundry for protective clothing can also be claimed.
Telephone & Internet Usage
Telephone and internet can only be reimbursed where there is an itemised bill and business calls and business internet usage can be identified. Bundled un-itemised contracts cannot be claimed. The only exception is where a separate contract is taken out exclusively for business purposes and it can be proven that a private contract also exists. In this case, the whole of the business contract can be claimed including rental.
Computer consumables, hardware and software
Claims for the purchase of storage media, hardware, applications etc. are allowable as long as they are an essential requirement in carrying out your assignments.
You may be required to attend training courses or seminars as a direct result of the assignment you are working on. Training courses, provided that they retrain or enhance existing skills, are allowable. Care must be taken to ensure that the training course does not fall foul of the Duality of Purpose rule. For example, an MBA or Degree course would be seen to enhance your own skills rather than benefiting you in carrying out your assignments.