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Parasol umbrella company
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Umbrella company contractor expenses
Posted Mar 16, 2011
One of the first things umbrella contractors seem to ask is - what can they claim for on expenses?
Despite what you have heard to the contrary - you can only claim for costs you have incurred solely and exclusively in the course of performing your contract work.
Expenses Dispensations
Some umbrella companies may claim to have been granted 'generous' or 'special' expenses dispensations from HMRC for their contractors. Again, there are no special expenses dispensations - these are created to cut down on paperwork rather than providing bonus payments to contractors.
You can read our full guide to umbrella company expenses dispensations for the complete picture.
So, what are the valid business expenses you can typically claim as an umbrella company contractor?
Typical Business Expenses
Here are some of the things you will typically be able to claim back from your umbrella company:
- Computer equipment (if specifically needed on your contract)
- Contributions to an executive pension
- Business telephony costs (mobile, phone, broadband)
- Professional subscriptions
- Accommodation expenses while away from home (must be reasonable)
- Meal allowance (only if you're away from your normal place of work)
- Eye tests
- Travel expenses (mileage allowance, parking fees)
- Training courses (if directly related to your work)
- Subsistence allowances
Check with your umbrella company administration team if you have any expense-related queries before claiming anything you are unsure of.
What about IR35?
As an umbrella company 'employee', the IR35 tax legislation will not be a concern, as you are taxed as an employee of the umbrella scheme. You will only be affected by the IR35 rules if you are working via a limited company.
Finally
Once again, the most important thing to remember is that you can only claim for things you have actually paid for - they must have been incurred on business duties. You must also keep full records of all the expenses you claim throughout the year.
If you have any doubts whatsoever about what you can claim for, always check with your scheme account manager, or an accountant.
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