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Umbrella Services
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Previous - Expenses
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What is an Umbrella Service?
Simply put, an umbrella service is a payroll service for contractors or freelancers. It is perfect if you are looking for a short term solution or if setting up and trading through your own limited company is not for you. Peace of mind is guaranteed in terms of tax compliance as umbrella services are not subject to the implications of IR35 and Managed Service Company (MSC) legislation.
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What About Expenses?
As per HMRC guidelines, umbrella service providers can allow contractors to genuinely offset business expenses against tax, hence allowing them to save money. This is a benefit you would not receive if you were paid directly through an agency.
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How do I claim expenses?
We will provide you with clear guidelines to outline what expenses you can claim, alongside an expenses template to enable you to easily send expenses information and original receipts to us on a regular basis. We operate a freepost system for the delivery of paperwork. Signed, approved timesheets are normally sent through at the same time by email or fax.
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Do I need to keep original receipts?
Original receipts are required for all expenses apart from any HMRC approved subsistence allowances e.g. £5 overnight subsistence allowance. You can only claim tax relief on other valid business expenses for which you have original receipts. Please note that credit or debit card slips in isolation are not usually considered acceptable as they do not provide specific details of the expenditure. If you choose to use an umbrella service provider that does not operate compliantly, you run the risk of being penalised by HMRC, meaning that you may have to pay the tax back along with any additional penalties HMRC may impose.
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Are there any joining or leaving fees?
No – you simply pay as you go and there is no notice period. If your contract ends or you obtain a permanent position, just let us know and we will issue you with a P45 to allow your new employer to deduct the correct amount of tax going forward.
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What tax do I pay?
PAYE, Employees and Employers National Insurance apply. However, you do receive tax relief on valid expenses, enabling you to take home more of your income. For a free illustration of projected take home pay in line with your circumstances, call us now on 0800 731 5368 or let us call you.
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Does Eagle Umbrella have an HMRC Dispensation?
No – having a dispensation claim is of no benefit to our contractors or freelancers. An expense dispensation from HMRC does not mean that an umbrella company is ‘approved’ by HMRC. Nor does it mean that you can claim expenses without keeping receipts (contrary to claims by some umbrella companies). All it means is that the umbrella company is allowed to declare expenses on a P11D form without including receipts – which simply allows them to save on administration. You as the contractor or freelancer who is claiming the expense will still need to keep receipts to back up this claim or you face the possibility of being fined and penalised if your expense claim is challenged by HMRC.
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How is Holiday Pay paid?
Under the Working Time Regulations holiday pay is calculated at the rate of 12.07% of your basic wage and taxable commission in the period and is included as taxable income on each payslip produced. This element is paid to you on an on-going basis and is disclosed separately on your individual payslip so you can provide adequate arrangements to ensure you have income to cover any times of absence.
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Do I need to file a Personal Tax Return?
The majority of Eagle Umbrella employees are not required to complete a self assessment tax return as all tax is deducted at source. You will only be required to complete a tax return if in the tax year previous you were in receipt of any income not subject to tax or if you have had a request to do so from HMRC.
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Will the Agency Workers Directive affect Eagle Umbrella?
This draft legislation is intended to provide temporary staff with the same benefits as permanent staff. The legislation will come into affect in 2011. Eagle Umbrella will keep its contractors and customers informed of developments.
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What is the Temporary Workplace Rule - the 24 month expense rule?
A temporary place of work is defined as a location where the employee carries out a task of limited duration. This is generally regarded as a period of no more than 24 months. Therefore if an employee is sent to work in a location for a period exceeding 24 months it is not a temporary place of work and travel expenses cannot be claimed. As soon as you are aware you will be at a location for more than 24 months that location is no longer a temporary workplace.
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Contact
Eagle Contracting
15a Harbour Road
Inverness IV1 1SY
t. 0800 731 5368
f. 01463 717 870
info@eaglecontracting.co.uk
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"I would personally like to thank Eagle for the excellent work you have done on my behalf" John Chapman, Contractor
"I refer your company to many people as simply you are very good at what you do and your staff are a major asset to your business" Gordon Forbes, Contractor
"Thank you so much for your support and speed. I really appreciate it." Sanjiv Junes, Contractor
"If I ever need to contract my services in the UK again, I will not hesitate in using Eagle for this and would highly recommend you to anyone" Gavin King, Contractor
"Unlike other providers, there's no pain with Eagle" Martin Wilson, Contractor
"Thank you so far for all your support!" Andrew Derbyshire, Contractor
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Eagle Contracting
15a Harbour Road, Inverness, IV1 1SY
t. 0800 731 5368
f. 01463 717 870
info@eaglecontracting.co.uk
Eagle Contracting Ltd is a subsidiary of Scarista Ltd
registered in Scotland No. 152660 trading as
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