Do I need to keep receipts for the expenses that I am eligible to claim?

If your recruitment agency or end client has agreed to reimburse you for expenses incurred during your assignment, you may wonder if you need to keep receipts when submitting an expense claim. Continue reading to discover if you need to keep receipts for expenses you are eligible to claim via an umbrella company.

Expenses overview

Before April 2016, it was possible for umbrella company employees to claim a wide variety of expenses to reduce their tax bill. The most popular expenses were travel and subsistence. However, contractors also commonly made expense claims for clothing, training, subscriptions, mobile phones and equipment.

In April 2016, HMRC decided to limit those who could claim expenses as they believed many contractors and freelancers working via an umbrella company were working like a permanent employee, but employees in permanent positions could not claim the same benefits.

Legislation called Supervision, Direction and Control (SDC) was introduced to limit the number of umbrella employees claiming travel and subsistence expenses. Only those who are not subject to SDC can claim these expenses. The legislation brings the tax treatment of contractors in line with those of permanent employees.

What is the definition of Supervision, Direction and Control:

• Supervision refers to when workers are monitored or someone oversees the work to ensure it is carried out to the correct standard.
• Direction – Direction refers to when a worker is given guidance on how to complete a task or is given instructions or advice on how the work should be done.
• Control – Control refers to when a worker is told what to do and when. Control also includes the ability of the end hirer to move the worker to another assignment or job at the business and take on different tasks.

What are reimbursed expenses?

Reimbursed expenses are costs that a contractor incurs for business purposes. It is a tax-free allowable business expense that your recruitment agency or end client has agreed to pay back to the worker. For example, mobile workers who are required to travel away from their main place of work can claim travel and subsistence expenses incurred whilst they are away working. This is comparable to expenses a permanent employee can claim if they need to travel to a different location and are required to work away from their permanent workplace.

Umbrella company employees are advised to speak with their umbrella company and agency or end client to learn if they can claim reimbursed expenses and the processes involved.

Do I need to keep receipts for the expenses that I am eligible to claim?

You must demonstrate that the expense is solely for business use and that the amounts have been accurately recorded and calculated. For each expense, you should keep the receipt along with other important information, such as the date, the amount and what the expense was for.

How do I submit an expense claim with Churchill Knight Umbrella?

If you are an employee of Churchill Knight Umbrella and would like further information about expenses, please call 01707 669026 or email umbrella@churchill-knight.co.uk.

If your recruitment agency or end client has agreed to reimburse you, you can submit an expense claim by completing the Expenses Declaration form on our website. Fill out the details and attach receipts for the expenses you’re claiming.