If you’re primarily working as a contractor, then it pays to understand how expenses work.
Even though it ought not to be, it’s a subject that causes confusion. On occasion, incorrect assumptions are made.
As an employee of an umbrella company, you benefit from the same employment rights as other employees, including paid holidays, sick pay, and the choice to enrol on a work-based pension scheme if you’re eligible to.
Are expenses included in that? Read on to find out.
Can I claim expenses with an umbrella company?
In short, yes you can.
The obvious follow-up question is; ‘What expenses can I claim through an umbrella company?’
Like with any employer-employee arrangement, expenses that you incur – for example, travel costs – can be reimbursed providing that agreement has been made beforehand.
The usual process is to make a claim, usually providing appropriate receipts as evidence.
If you’re a contractor doing social work and need to travel between locations, it’s important to discuss with your recruitment agency if – and how – you can claim expenses for doing so.
If approved, that money is sent first to your employer – the umbrella company – before it’s deposited in your account with your normal pay.
While an umbrella company processes this reimbursement through payroll, it’s important to note that no National Insurance Contributions (NICs) or other taxes are deducted.
However, some companies may apply a handling charge. For that reason, we always recommend for you to check the terms of your arrangement to avoid surprises.
Some umbrella companies may apply extra feeds for handling these reimbursements. Therefore, it’s essential to check the terms of your specific arrangement to avoid surprises.
Can you claim accommodation with an umbrella company?
Accommodation is another example of a chargeable (or billable) expense.
In circumstances where you’re required to work away and stay in another location overnight, it’s usually possible to claim back the cost of doing so.
This can be the price of accommodation as well as food and drink – including meals out.
Remember though; this is not offset against tax. Chargeable expenses are different from tax-deductible ones in that they’re simply reimbursed by your recruitment agency (or end client if that’s who your contract is with).
Use Umbrella Tracker to choose an umbrella company
At Umbrella Tracker, we help temporary workers involved in the healthcare, medical, social care, and IT industries across the UK to compare sector-specific, fully vetted, and accredited umbrella companies – supported by our free and unbiased advice.
If you want to learn more about umbrella company expenses, then ask a team member.
Their expertise also extends to helping you to opt for an umbrella company best matched to your individual requirements using a combination of our own research, current client testimonials, and PSLs from recruitment agencies.
Don’t delay, contact us by completing the form on our website. Alternatively, call us by dialling 0203 026 3303 and start your search today.
