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by Rob Crossland

Expenses – The sequel

January 21, 2008 in Business Expenses, Tax

Following hard on the heels of my “Buyer Aware” article I am pleased to announce that we have secured some sensible improvements to our Expense policy for Contractors. Our fundamental practices in this area remain unchanged and it is for these reasons that HMRC were happy to increase limits where appropriate.

I won’t go into all the specific changes, our revised expense guide has all that detail but I did want to take this opportunity to make some further points around expenses.

  •  Expense approval could be considered a pain but we check every claim. Making sure the expenses are correct and legitimate is in all our best interests. The liability for mis-claiming would sit with the Contractor and whilst it may seem like “red tape” by those Umbrella Companies that do it by the book, it really does make sense.
  •  Changing Umbrella Company is not a guaranteed way to continue claiming travel to work expenses if you hit the 24 month rule (You cannot claim expenses when you know you will be at the same site for 2 years at the point you know that fact). There should be a sensible break (not 1 day!) between assignments.

Some of the above is explained when you are shopping around, some of it isn’t. As I said in the earlier article, dispensations are not an excuse to claim anything without receipts that you have not incurred. Remember, most of the red tape keeps you away from the gaze of HMRC and allows you to contract without risk.

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by Rob Crossland

The Golden Rules (of Engagement)

December 1, 2007 in Business Expenses, Industry comment, Tax

My name is Rob Crossland and I’m the MD of Parasol, prior to that I worked as a Contractor in the IT and Finance sectors. I hope you might enjoy and contribute to my musings on contracting, employment, sport and tax!

Since the Managed Service Company (MSC) Legislation came about, there has been many reinventions of old Composite service providers, new Umbrella Companies and a re-emergence of some off shore schemes. It all adds up to a lot of confusion for Contractors, especially those coming into the market as first timers. So in an attempt to keep it simple, here are what I believe to be the golden rules:

  • Stay away from Off-shore – last time I met with HMRC – they stated that they would be going after Contractors using those models. How they locate the Contractor working through an Isle of Man scheme is not known to me, but they seemed pretty adamant.

  • It is legitimate to run a Limited Company but be prepared for more responsibility and more paper work. The MSC legislation means that an “Accountant” should not be selling you “85% take home – guaranteed” – they also cannot have control of your business banking.

  • PAYE Umbrella – Many are new to this and do not truly understand what needs to happen. Be careful of being offered over inflated expense led quotes that are not based on reality. Mr HMRC is watching. An expense dispensation is not an excuse to claim for things you do not incur.

We (Parasol) have, of course, only ever provided a PAYE service and believe that our solution is the best on the market. I say that based on 8 years of defining a solution that offers more than simply timesheets and expenses. I predict that some of these new companies will fall by the wayside as legislation gets tougher and that the good ones will progress – an obvious statement in many ways but worth looking back on in a few months and years.

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