If you are new to contracting and have signed on to work for an umbrella company, it’s important you understand your rights and what you are entitled to when it comes to expenses. Upon signing with an umbrella company, they effectively become your employer meaning the same procedures apply as such. HM Revenue & Customs have clear guidelines when it comes to expenses and that they must be a “wholly, exclusively and necessary expense” for the performance of your contractual duties. So, what are you covered for?
Statutory Maternity Pay
In order to qualify for Statutory Maternity Pay, you must meet the following criteria:
- You must have been continuously employed for at least 26 weeks up to and into the 15th week before the due date
- You must present your employer with a MAT B1 Certificate within sufficient notice confirming the intended date to begin your maternity leave
- Your average earnings must be at least equal to the limit of lower earnings for National Insurance contributions
If you don’t meet this criteria, then your umbrella company should provide you with an SMP1 form telling you why you are not entitled to Statutory Maternity Pay and this can then be used to claim Maternity Allowance.
As your attendance at an interview is not a contractual duty, criteria by HMRC is not met and therefore you will not be able to claim any interview expenses back.
It is possible to claim back the cost to travel to and from your temporary place of work. This includes if you are a passenger and payments for parking and congestion charges. You can also claim if you travel via public transport as long as you have a valid receipt. However, contractors under the Supervision, Direction and Control cannot claim travel & subsistence expenses. If you are under IR35, it is likely you are under SDC and therefore cannot claim.
For business trips, you can claim expenses for anything that is necessary for the duration of your trip, this includes:
- Accommodation for the duration of the trip (if necessary) – this must be for the contractor alone and only if required for the purpose of the trip
- Certain overnight expenses that are necessary – this can include food for the duration of your stay (though there are monetary limits on this)
Anything that is conducted for personal reasons while on the trip will not be covered.
Clothing and Equipment
If protective or a specific type of clothing is required to fulfill the duties of your role, then these will be covered, however everyday wear is not. The same goes for equipment – claims must be supported by evidence that they are required to fulfill your current contractual duties. This includes computers and any software purchased – the use of which must be strictly for business purposes.
Regardless of whether the calls are being made from your mobile phone or a fixed line, as long as they are strictly business related, you can claim back the cost.
All contractors can claim re-billable expenses – these are the cost the clients reimburse agency for.
Please keep in mind that this is a brief guide only, and it is always worth contacting HMRC if you are unsure about a claim. Always keep detailed records of your expenses.
If you would like to find out more information on choosing an umbrella company, or are looking for work with an umbrella company, Cyberteam have an Umbrella PSL that we encourage all contractors to go through, contact us by emailing email@example.com or call us at our offices in London (+44 (0)207 849 3082) or Leeds (+44 (0)113 398 4070).