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Mar 7 11

Dispensations – Expenses

by bob.jones

I have added a new heading – see above. Everything now under the one banner.

Mar 7 11

Meal Allowances

by bob.jones

The definitive answer – read all about it here.

Jun 1 10

Benchmark rates and record keeping requirements

by bob.jones

As at 24 Aug there have been further developments since this –  …

All new umbrellas and those where dispensations are being renewed will be required to adopt the benchmark rate unless they can show that a higher rate is applicable. Even though an employer may be operating the benchmark rate HMRC expect that an audit trail is present to prove that the employee has purchased a meal. The HMRC instuctions are a little vague – they talk about regular checks and adequate procedures. I have been trying to tie them down and the best I have managed so far is this:

“The Revenue’s position is that an employer should be able to demonstrate that the scale rate payments made to their employees does no more than reimburse these individuals for the actual costs they have incurred in performing the duties of their employment. They should retain sufficient records to demonstrate that they undertake regular checks to ensure that the travel rules are being followed. 

“The frequency of these checks will depend on the size of the workforce and the number of claims being made. At a minimum I would expect that such a check should be carried out at least once a year and involve employees submitting receipts with all claims for at least one month. It would depend on the findings of this check as to whether or not further checks are undertaken. It should ideally also be random and without warning.”

May 27 10

Expense Audits

by bob.jones

I will “investigate” all your procedures from an HMRC perspective – you will effectively be subjected to an HMRC investigation – but by an ex HMRC Inspector of Taxes/ex Compliance Manager and veteran of over 100 Commissioners Meetings who has your interests at heart. Follow the link above.

May 25 10

HMRC beginning to turn the screw on Umbrellas

by bob.jones

I was talking to an ex colleague at HMRC today and was told about two dispensations applications that had been received. The conversation was enlightening. read more…

May 25 10

Overarching Contracts

by bob.jones

HMRC have just (5 May 2010) published guidance to staff regarding overarching contracts. This makes very interesting reading and can be found at  http://www.hmrc.gov.uk/manuals/esmmanual/ESM2023.htm plus the pages that follow.. The instructions run from ESM 2023 to ESM 2065. Email me if you think you might have a problem.

Apr 27 10

Umbrella Training Course

by bob.jones

Umbrellas and Expenses – (half day on site  – Advanced Workshop)

This interactive and comprehensive course is aimed both new and existing umbrella companies. The course is tailored to suit your company operations and hence does require some upfront work. It covers all the key elements of current UK legislation. It has been conceived and is delivered by an ex HMRC Inspector of Taxes (with 39 years service) who, for a number of years, was an internal HMRC staff tutor and, in addition, has specialised in expenses gaining an unrivalled knowledge of the subject. Remember – failure to comply with the HMRC regulations can result in penalties so this course could pay for itself in the first year. 

You may not feel that training is number one priority but you must not remain complacent. If your procedures are inadequate then HMRC will have a field day when they come to call in which case my conducting an “HMRC Inspection” may be the preferred option.  See the link above for Expense Audits. Read Full Course Details.

Apr 26 10

Scale Rate

by bob.jones
Many employers who have dispensations want to take it a stage further – it is not always possible to obtain a receipt in every case for every item of expenditure. Before considering the scale rate there is the legal requirement that the expense has to be allowable for tax purposes. It is a long established legal principle that we eat in order to live and not in order to work – on the face of it there is not going to be any allowance for the purchase of food.  However, case law has decided that where, by virtue of a person’s employment,   more is spent on food than would otherwise have been the case then the “extra” is allowable.  Of course, from a practical point of view, it is highly unlikely that anyone is going to be able to quantify that “extra” amount.  Where it can be demonstrated that “extra” has been spent then HMRC are content to allow the whole amount of the expenditure. read more…