Claiming Expenses

Claiming expenses is the single biggest way you'll benefit financially from working through an umbrella company. The more (legitimate) expenses you claim the less tax you pay and the more income you take home - in the region of 40% of the total expenses that you have claimed.

You can download a blank expense form either here (Adobe .pdf) or here (Excel .xls).

Keep it legitimate

It's important at this point to say that your expenses must be legitimate. HMRC state that "expenses must be incurred wholly, exclusively and necessarily in the performance of your duties". This is something we do take seriously here at Gabem because we have your interests at heart.

The HMRC can at any time review your expenses and if they are deemed not to have been incurred in the performance of your work duties then you are liable at best for additional tax, and possibly charged with fraud. That's why working through Gabem you are in safe hands. To help protect you we require original receipts for all expense claims, including fuel receipts for mileage. Any expenses that arrive without original receipts will be rejected as well any expenses that do not meet the HMRC guidelines.

So what expenses can you legitimately claim?

Mileage: You may claim a mileage allowance if you use your own vehicle for travelling to and from work.

Travel: Other travel costs incurred in the process of carrying out your duties.

Meals: If you are at work for a certain number of hours you may be able to claim meal expenses.

Accommodation: You can claim for accommodation if you are staying away from your normal permanent address in the course of your work

Tools\Clothing: You can claim for industrial tools and safety wear that is solely for your use at work.

Telephone (fixed line or mobile): You can claim specifically for business calls, not private calls or line rental.

Professional associations: If you belong to a professional body you may find that your fees and subscriptions are allowable legitimate expenses.

Expanded expense categories

Mileage: You may claim a mileage allowance if you use your own vehicle for travelling to and from work.

Write the destination and reason for journey, dates of travel and car details on each form. You must also provide VAT receipts for the fuel used. These receipts should be sufficient to cover the number of miles you claim (as a guide, you'll need receipts for about £13 for every 100 miles claimed). The receipt should be dated not more than a month before the date travelled. All petrol stations provide VAT receipts if you ask for them.

Mileage allowance for cars and vans is paid at a higher rate for the first 10,000 miles travelled during the tax year and at a lower rate above 10,000 miles – currently 40p per mile and 25p per mile respectively
A lower rate of mileage allowance is paid for motorcycles, currently 24p per mile
Mileage allowance covers licence and insurance, servicing, tyres, spare parts etc., as well as fuel
We may ask for a copy of your registration document when you claim mileage as proof of ownership.

Travel: Other travel costs that can usually be claimed (with receipts) are: Ferry costs, Bus Tickets, Taxi Fares, Tube and Train Tickets, Parking Costs, Plane Tickets, Toll Charges, Congestion Charges.

Meals: If you are at work for over 5 hours you will be able to claim for up to £7.50 of receipted meals, if you are at work for over 10 hours you will be able to claim up to £15 of meals, again to be backed up by receipts. All the receipts you send in must show individual items so we can total up the food you have bought.

You will only receive the amount you have spent, so if you were at work for over 5 hours and spent £3.50 on lunch, you would only receive £3.50 not £7.50.

Accommodation: You can claim for accommodation if you are staying away from your normal permanent address in the course of your work. We must have a receipt that includes the hotel/B&B's name, address and telephone number (preferably a VAT-registered business with the receipt supplied on headed paper). You are entitled to accommodation costs, plus an additional £5.00 per night (for personal incidental expenses related to staying away from home), and up to £20.00 per day can be claimed in respect of meals, but receipts must be provided.

We can process your claim for personal incidental expenses on sight of the accommodation receipts, but if you are claiming for meals, you need to provide itemised receipts for each meal.

Tools/Clothing: You may claim for industrial tools that are solely for your use at work and clothing that relates to safety wear (such as fluorescent jackets and steel toe-cap boots). VAT receipts must be included for these claims. You may also claim for the cost of laundering protective clothing. You also need to provide receipts for these.

Telephone (fixed line or mobile): You can only claim for business calls, not private calls or rental. Highlight each business call on your itemised bill and include the original bill (NOT a photocopy) when you send us your expense claim. If you use a pay-as-you-go mobile phone and pay top-ups, you must still provide an itemised bill if you wish to claim for business calls.

Professional associations: If you belong to a professional body, you may find that fees and subscriptions are allowable expenses. Check if yours is allowable on HMRC's website: www.hmrc.gov.uk/list3/list3.htm

Agency Expenses: You can claim agency expenses via the Gabem Umbrella Company, but you must provide all original receipts and a copy of the agency expense log. These expenses can only be claimed once – either through the agency or using the Gabem expense claim form.

Other Expenses: If there are other expenses to which you think you might be entitled, we will not be able to process them, but you can contact HMRC direct about this at Ocean House, 87-89 London Road, St Leonards-on-Sea, East Sussex, TN37 6AD. Tel: 01273 225260. Fax: 01424 462103.

Is your 'workplace' permanent or temporary?

One key question concerning your entitlement to claim for the cost of business travel is that your workplace must be classed as 'temporary'. It can be defined as a temporary workplace if it is a place where you go in the course of your employment to carry out a short term assignment.

However, your workplace will be a permanent workplace if

You work there continuously for a period that lasts, or is likely to last, more than 24 months. The 24-month test is applied from the start date of the contract. For example, an assignment at a workplace that began on 1 January 2008 will fail the 24-month rule if it is expected to run on until after December 2009 at the same workplace. And even if you do not expect at the start to be at the workplace for 24 months, it becomes a permanent workplace if circumstances change so that your total time at the workplace is expected to exceed 24 months.
You expect to work at the same workplace throughout your employment with the Gabem Umbrella Company. For example, if you join Gabem expecting to work at a single site for six months and then to leave Gabem, that site will be treated as a permanent workplace. A workplace will also be treated as permanent if you have decided it is the last workplace at which you will work through the Gabem Umbrella Company.

If neither of these points applies, your workplace should be treated as a temporary workplace and you may claim the cost of business travel.

Help us process your claim quickly

Complete all the necessary details.
Include original receipts for all items / accommodation as explained above.
Send in forms with an original ink signature (not a photocopy or fax signature)
Include all details on the mileage sheet (car details, destination, reason for journey, dates of journey, worksite).

Incomplete claims will be rejected or delayed and you will lose the benefit.

Get the financial benefit

Expenses are not paid as an additional sum on top of the amount received by the Gabem Umbrella Company from the agency. Expenses will be reimbursed to you after the payment of your contracted pay and before your profit-related pay is calculated. This enables you to obtain tax and NIC relief for these expenses up front and means that you will see more money in your bank account. If your expense form covers several weeks it may not all be reimbursed in the same week – it may be carried forward each week until all the expenses have been allocated.

Any Questions? If so, please call 01798 861 100 and our Customer Services Team will be happy to answer them.