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Employee Expense Claim Guidelines
This document outlines expenses that you may be able to claim for travel to a temporary work place, subject to certain criteria being met.
Under section 339a ITEPA 2003 we are required to establish the supervision, direction or control (or the right of) status of any worker who personally provides services to a client (which are not services provided wholly in the client's home); and the services are provided not under a contract directly between the client and the worker, but under arrangements involving an employment intermediary.
Section 339A ITEPA 2003 states that a workplace is a permanent workplace if the worker works for an end client via an employment intermediary (not PSC) and Supervision Direction or Control (or the right of applies).
To ensure compliance with this legislation Black Diamond will undertake an assessment of your worker status. This will include, but is not limited to, assessing the supervision, direction or control clause received within the contract from the Employment Business. We will obtain further confirmation direct from the Employment Business in relation to the specific legislation clause detailed above. We will require 3rd Party Confirmation that SDC does not apply. We will also speak to you in detail about the arrangements that you have agreed with the end client.
If we feel that you can demonstrate compliance to 339a of ITEPA we will undertake a fact finding process that will enable us to give advice on the best Umbrella option for your circumstances.
We have two options available:
- Fixed Umbrella Model
- Variable Umbrella Model
Via our fixed umbrella option your expenses will be assessed and approved at the outset of your assignment and fixed for the full duration or until you start a new assignment with a new client. At each pay period you will be required to support such claims with an expense form or via our online App.
Via our variable umbrella option, at each pay period you are able to claim mileage using HMRC AMAP rates and where applicable personal overnight expenses as detailed below. All other expense claims must be receipted, including meals and accommodation and can be claimed by self-assessment at year end. Black Diamond will support you in this process. We suggest that you simply collect your receipts weekly and send them to us via our App or scan and email, we will then assess and collate this information to support your self-assessment at year end.
Temporary Work Place - 24 Month Rule
Before your travel, subsistence and mileage claims can be approved your place of work must meet the criteria of a temporary workplace. If you are travelling from home to your temporary place of work, this is subject to the ‘24 month rule’. This states that travel from home to work is only allowable as a tax-deductible expense for as long as you believe your contract will not exceed 24 months. If you only work on a single assignment (regardless of the length of that assignment), without the intention/expectation that there will be further assignments, your workplace will be regarded as permanent for these types of expenses and they will not be allowable. Where you fall outside the ’24 month rule’, then travel between your home, or any other place that is not a workplace, is not allowable. On receiving notice that you will leave our employment expense claims are no longer allowable, as your work place will no longer be classified as temporary and therefore will not meet the qualifying rules of a temporary work place.
Expenses for travelling to a temporary workplace can be claimed. If the journey is by public transport or taxi then a relevant receipt must be attached. In the event that your personal vehicle is used then the company will reimburse you in line with the HMRC Approved Mileage Rates, and you simply need to log the details of the journey (including start and finish postcodes) and enter your car engine size. To support that you have incurred a mileage cost HMRC request that you provide Black Diamond with a copy of all VAT Fuel receipts. This is simple and easy to upload via our online App or take a picture on your phone and email to firstname.lastname@example.org. Don’t forget to tell us who you are.
Car Parking and Toll Charges incurred on company business can be claimed. Receipts must be provided to validate all parking costs. Toll receipts must be provided where possible.
Business miles incurred in a private car up to the maximum rates, as supplied by the HMRC each year.
|Up to 10,000 miles||£0.45|
|Over 10,000 miles||£0.25|
Business miles incurred via motor cycle and/or bicycle.
Passenger Payments – Cars and Vans
Business miles incurred when carrying fellow Black Diamond employees in a car or van on business journeys can be claimed at the rate of:
|Per passenger per mile||£0.05|
On completion of the mileage log please provide the name of passenger(s) and journey(s) you are providing to the passenger(s).
If you use your own vehicle in connection with the performance of any assignment under this Contract of Employment, it is your responsibility to ensure that you have appropriate insurance cover in place for business use of your vehicle.
You must take reasonable care and adequate rest periods when travelling to and from assignments under this Contract of Employment and take all reasonable steps to ensure your safety and that of others.
Accommodation & Meals
Costs for a B&B, Hotel or Rented accommodation are allowable if necessary due to your temporary workplace. The cost of an evening meal can be claimed at £25 per night via the bench mark scale rates. Receipts must be provided for accommodation, where they include a cost for an evening meal or breakfast the bench mark scale rate of £25.00 is not payable. Remember that you can send your receipts at any time, 24/7 via our online App or via email.
When you are staying in temporary accommodation then you must return home on a regular basis. For assignments that are a considerable distance from your main residence and where returning home may be difficult, we would still expect to see a return journey at least once every quarter as a minimum.
Incidental Overnight Expenses
Small out of pocket expenditure when staying away from home such as cleaning, daily newspapers and telephone calls home are allowable. No receipts are necessary and they must be claimed at the same time as claiming for accommodation. The rates differ depending upon whether your assignment is in the UK or overseas as follows:-
|UK Assignment||£5.00 per night|
|Overseas Assignment||£10.00 per night|
Bench Mark Scale Rates
The Bench Mark Scale rates are set by HMRC these regulations can be used by employers for reimbursement of employee expenses where certain qualifying conditions are met. These rates are the maximum tax and NIC free amounts that can be paid by employers who choose to use the system.
Rates are set as follows:
|Minimum journey time||Maximum amount of meal allowance|
Where a meal allowance of £5 or £10 is paid and the qualifying journey in respect of which it is paid lasts beyond 8pm, a supplementary rate of £10 can be paid.
A meal is defined as a combination of food and drink and would take a normal dictionary meaning. Where employees are required to start early or finish late on a regular basis, the over 5 hour and 10 hour rate, whichever is applicable, can be paid provided that all the other qualifying conditions are satisfied.
Benchmark scale rates must only be used where all the qualifying conditions are met. The qualifying conditions are:
- the travel must be in the performance of an employee’s duties or to a temporary place of work, on a journey that is not substantially ordinary commuting.
- the employee should be absent from his normal place of work or home for a continuous period in excess of five hours or ten hours
- the employee should have incurred a cost of a meal (food and drink) after starting the journey
If you are claiming the Bench Mark scale rate amounts there is no need to provide receipts.
Business mileage incurred travelling to and from work when using a hire car can be claimed as an expense at a reduced mileage rate. Complete your mileage log as normal ensuring you clearly mark the miles claimed as ‘hire car’ mileage. If you do not mark your hire car mileage correctly this could lead to a shortfall of tax that would need to be dealt with at the end of the tax year.
The actual cost of the hire car cannot be claimed as a business expense.
Each time you submit an expense claim to us you will be asked to confirm the following:
- That it is still your intention to undertake multiple assignments during your employment.
- That your circumstances and worker status under supervision, direction or control (or right of) has not changed.
- That it is still your expectation that your current assignment will not exceed 24 months.
- You confirm that where you have made a claim for a meal you have incurred a cost.
- That the expense amounts claimed is true and accurate.
The following expenses are likely to be available via self-assessment at tax year end, where applicable.
Only specialist and / or safety clothing and equipment can be claimed upon the production of receipts.
Hand tools for manual workers are allowable expenses that can be claimed upon the production of receipts.
There is no reporting requirement and no tax or NIC to pay for periodic medical checks or health screening that take place no more than once per year. A full receipt must be provided.
Only certain types of training are tax deductible and, this will be assessed on an individual basis. For training to qualify as tax deductible it has to be a necessity for you to continue your work for the company. If the training is to gain a new skill separate to the job currently being undertaken then it will be treated as progress to your career and not a necessity to continue the current job role. This is therefore not tax deductible. If the training is to simply update existing skills the expense may be allowable.
Membership Fees for Professional Institutions
Fees that are necessary for you to gain and maintain your professional standing are allowable, e.g., to professional bodies. These must be receipted. For a list of allowable professional subscriptions please visit www.hmrc.gov.uk/list3/list3.pdf
The cost of business calls on your private telecommunication system may be claimed (this includes mobiles). Itemised invoices will be required with the business calls appropriately identified. Where a separate telecommunication system is used exclusively for business purposes then the full cost of this may be claimed. Line rental cannot be claimed.