Umbrella Company Fees
Umbrella Company contractors pay their umbrella company fees of over £100 a month.
For that they basically get paid.
The umbrella company do all the admin.
All they need is a timesheet from the contractor and expenses receipts.
Tax Deductible Expenses for Contractors
The umbrella company invoice the agency or client. They send off the PAYE taxes to HMRC after subtracting the expenses claims by contractors and then pay the contractor.
Tehe contractor, for tax purposes, is an employee of the company pauing PAYE like any other employee.
It is a ruse, or device, to be able to offset expenses against tax for contractors who are caught by IR35.
Travel and Subsistence Expenses
Any company can claim expenses incurred for their employees to travel as tax deductible.
However, umbrella companies pass this on to contractors who incurred the expnses in the first place.
However, the Chancellor has now decided to take away the right of umbrella company contractors to claim travel and subsistence expenses. Thi is a big blow to them and to umbrella companies.[caption id="attachment_882" align="alignnone" width="225"] Travel and Subsistence Expenses incurred by contractors[/caption]