Umbrella expenses
How we help
Well Pay knows a lot about how to deal with expenses and support you with what you can claim for and what you can’t, we also take the time to explain the ins and outs of the world of expenses with a team of qualified experts.
We combine low fees, with long established reputable tax planning, along with a generous expenses policy giving you the freedom to maximise your gross contract income.
We believe we provide the best product on the market because we get you the highest return in a compliant and legislative manner. We look at all the opportunities available to maximise your take home pay including advice on wealth management.
We are fully compliant with HMRC legislation and IR35 ensuring that you remain tax compliant.
Umbrella company business costs and expenses explained
One of the benefits you’ll enjoy when working with Well Pay is the ability to claim and be reimbursed for legitimate business costs and expenses – as long as they’re incurred during an assignment. The types of costs and expenses that can be claimed and reimbursed are dependent on the type of assignment you’re working on and whether it’s subject to supervision, direction or control (SDC).
The things you can claim for are determined by HMRC guidelines so all umbrella companies should follow the same process. The table below provides an overview of the costs and expenses you’ll be eligible to claim depending on the assignment. We’ve also provided a more detailed explanation of each item below:
SDC
Introduced in 2016, SDC helps to identify contractors that should not be allowed to claim travel and subsistence expenses or registered under the CIS scheme.
Supervision, Direct and Control
Supervision: is overseeing a workers work to ensure it is done at a certain standard.
Direction: This is when a contractor is being directed and guided on how to carry out tasks in line with a contract.
Control: If someone is dictating how work should be carried out rather than the contractor deciding then the contractor is subject to control.
SDC applies to your assignment
Type of expenses & cost
Client billable expenses
> Paid tax & NIC free by Well Pay
Business cost, parking at or near the assignment, training, textbooks & manuals
> Paid tax & NIC free by Well Pay
Mileage, (cars, bicycles, etc)
Not paid by Well Pay (but can claimed in the tax return)
Business expenses (business entertaining, stationary, safety equipment, travel, subsistence, accommodation, etc)
Not paid by Well Pay (but can claimed in the tax return)
SDC does not apply to your assignment
Type of expenses & cost
Client billable expenses
> Paid tax & NIC free by Well Pay
Business cost, parking at or near the assignment, training, textbooks & manuals
> Paid tax & NIC free by Well Pay
Mileage, (cars, bicycles, etc)
Paid tax & NIC free by Well Pay
Business expenses (business entertaining, stationary, safety equipment, travel, subsistence, accommodation, etc)
Not paid by Well Pay (but can claimed in the tax return)
SDC status
As an employee, your SDC status is determined by looking at whether you are subject to, or the right of, Supervision, Direction or Control by anyone in the manner in which you provide your services whilst working on assignment.
The legislation is complicated and the definitions of supervision, direction and control are subjective and not always clear cut. Individual circumstances are taken into account for each separate assignment.
Does anyone have the right to tell you how to do your job?
This does NOT mean that someone on the client’s site tells you what to do, where to do it, or when to do it, but can they actually tell you HOW it should be done? For example, can someone tell you that you must use a spreadsheet rather than a Word document to collate results? Do you have to follow the client’s checklist to complete your task? The person sitting nearby may offer suggestions from time to time but do they actually have a right to tell you how things must be done?
If the answer is “yes” then you are likely to be subject to SDC and if the answer is “no” then that’s a good indicator that you are NOT subject to SDC.
What’s well pay’s response?
We’ve devised a series of questions which we will ask you to answer each time you start a new assignment and when you wish to claim expenses. The answers you give will help us to decide your SDC status.
For some roles our view is SDC will always exist. For example, if you’re a teacher, nurse, driver or social care worker there will always be someone with a RIGHT to supervise, direct or control how the work is done. Also, if the rate we receive from the agency or client is less than £12 per hour then we’ll determine that you’re subject to SDC.
Regardless of your SDC status we have a solution that works for you so please call our best advice team to discuss your own circumstances on 0161 637 0128 . If you would like to know more about the detailed guidance from HMRC on SDC please refer to www.gov.uk.
Impact of sdc status on expenses that can be paid
If you’re subject to SDC then we can’t pay certain expenses for the duration of the assignment so it’s really important that we get your status correct. To find out more about what this means for the types of expenses you can claim and have reimbursed by us, please refer to our business costs and expenses guide.
Security
We have a wide range of products and serices to ensure that your finances are structed, we use robust cloud based software which is secure.
Monthly Pay
You receive a monthly market rate gross salary equivalent payment that will be subject to tax and NI deductions.
No start up fees
There are no start up fees or exit penalties. Our fees are only applied whilst you are earning income through us. No fees are charged for holiday periods or breaks between contracts.
Expenses
By taking full advantage of the HMRC approved expenses policy, you can claim tax savings of as much as 20% of your gross income per year.
Invoicing
We handle this for you all you have to do is send in your time sheets and we manage invoicing, debt collection and HMRC. The only other ask we have is to ensure that you submit all your expenses to ensure you are maximising tax liability reduction.
Insurance
Employee liability, public liability and professional indemnity insurances are included.
Tax Return help
We will arrange for professional assistance in completing tax returns that cover (in full or part) the period you use our service.
Compliance
We are fully compliant with the necessary HMRC Legislation and with all current IR35 policies. We also ensure that you remain tax compliant for the duration of the Contract.
Milage
Mileage to and from the assignment and home can be claimed and reimbursed tax and NIC free if no SDC applies to the current assignment. Mileage rates apply to bicycles and motorcycles as well as cars and vans.
The table below outlines the current approved mileage allowance payments (AMAP) you can claim for.
Mode of transport
Cars and Vans
Motorbikes
Bycyles
Business miles in annum
45p
24p
20p
Anything above
25p
24p
20p
Frequently Asked Questions
Client billable expenses
These are pre-agreed with and paid by the end client or agency so must be approved by the end client or agency upfront before the expense occurs. In order to be paid tax and NIC free by Well Pay, the client billable expense must be within one of the categories on the My Well Pay expenses guide.
Business cost
These types of costs are always paid tax and NIC free regardless of the type of assignment you are on and include electronic equipment, parking at or near the assignment, training & tuition costs, subscriptions and text books.
Electronic equipment
The costs of electrical equipment such as an iPad or laptop can be claimed for and reimbursed, provided they’re essential for the assignment. Software counts as well. There’s no limit to the amount that you can claim, as long as you detail how each purchase supports your role.
Parking
You can claim and be reimbursed for the cost of parking at or near the assignment.
Training and text books
It’s also possible to claim and be reimbursed for the costs of any courses or training that you complete and any text books that you need – provided it’s related to your role. If this is a requirement for the current assignment, there’s a good chance that the request will be accepted. Any non-work related qualifications aren’t eligible for reimbursement.
Business expenses
This covers things like business entertaining, stationery, safety equipment, travel, accommodation and subsistence. You’ll be able to apply for a tax refund from HMRC on these expenses after the end of the tax year (5th April) either via a self-assessment tax return or a P87 form. Well Pay will help you with this by providing you with all the information HMRC will need, so long as you regularly log all of your expenses and upload receipts on the My Well Pay so we can track and check them.
The amounts you may get refunded by HMRC can really add up so it’s definitely worth doing this.
Accommodation
To claim a tax refund on accommodation expenses, you’ll need to provide a scanned copy or picture of your receipt. If you’re seeking a tax refund on rental costs, the original, signed copy of the rental agreement will be needed.
Any rental accommodation claim needs to meet HMRC’s Dual Purpose rules – basically saying that you’re already maintaining a property while you’re renting the second one for the assignment. If you’re renting a property to live in during your working week and then returning to your main home at weekends, you can seek a tax refund on the full cost of renting the second property.
Travel
You can claim a tax refund on expenses for a range of different transport methods, including planes, trains and cars. What’s more, this could also include additional expenses such as rail/tube passes, taxi fares, road tolls and congestion charges.
A tax refund on reasonable car hire charges may also be recovered, provided the car was hired for business use. That means if you hire a car for seven days, but only work five, you can only claim for the amount of time you were on assignment, i.e 5/7. For Car Hire mileage, you can either claim the full 45p per mile and not for the rental costs or if claiming the rental costs reduced mileage rates will apply.
Remember, keep and upload all your receipts on the My Well Pay so we can check and approve them. Speeding or parking fines can’t be claimed for, so please drive carefully!
Food and drink
You may also be able to claim a tax refund for any meals you buy while on assignment. They just need to be bought and consumed either on your way to or from work, or while at work. Buying food and drink the day before and eating it while at work doesn’t count.
If you keep your receipts and upload copies onto the My Well Pay, there are no restrictions on the amount you can claim.
Stationery
Although claiming for the odd bit of stationery may seem more effort than it’s worth, when you add together the cost of each item it really does make sense – think of the amount of pens you get through in a year! You can claim a tax refund for stationery and postage costs incurred for business purposes so long as you keep and upload copies of all your receipts onto the My Well Pay.
Business entertaining
You can claim a tax refund for reasonable costs incurred when entertaining a business contact or client. Just submit these claims along with copies of receipts, details of the people you’re entertaining and the reason for the entertainment. Unfortunately, nights out with friends, family or work colleagues don’t count!
Safety equipment, professional subscriptions and phone call costs
You can claim a tax refund for all of these items as long as they’re relevant to the current assignment.
Need more help with expenses?
Our accountants can provide you with a best advice based on your circumstances
Contact us
Call Us
0161 637 0128
Email Us
info@wellpayumbrella.co.uk
Our Location
Well Pay Group
Parkway Five
Emerson Business Centre
300 Princess Road
Manchester
M14 7HR