Yet Another Expenses Blog
April 1, 2009 in Business Expenses, Contractor News, Industry comment, Tax
April 22nd 2009 could be another milestone in Contracting / Freelancers as Mr. Darling announces the 2009 Budget.
Potentially buried in the detail will be some further changes to expenses whereby HMRC may get around to introducing UK wide fixed “scale rates“. As part of this new approach, “in response to concerns from some employers and professional advisers about consistency between what is agreed for different employers, HMRC also proposes to standardise the different scale rates that it will agree with employers.”
It could therefore mean the end of some dubious practices by some Umbrella Companies that claim very high % returns to Contractors on a basis of claiming expense levels that in some cases are not incurred and in others as a result of “good” negotiation with a local inspector. I blogged on this in 2007 and many times since and this aggressive stance (abuse of expenses imo) may have come home to roost. It should create a level playing field whereby service and value for money are what Contractors focus on and not risky expense policies. I live in hope!
Bel Grant said on May 14, 2009
My key message for all umbrella users and contractors is to use an appropriate payment route or trading vehicle to route your engagements through. This new expenses policy is certainly a step in the right direction.