Expenses Policy. Business Mileage. FPS Top Tip. Type of vehicle First 10,000 miles Above 10,000 miles. An Example

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1 Expenses Policy

2 Expenses Policy There are three ways in which expenses can be claimed: Business Mileage Reimbursed Expenses Year End Expenses Please refer to the included expenses table (p.9) for guidance on when you should use each type. Business Mileage HMRC regulations allow you to receive tax relief on business mileage. You can claim business mileage on a weekly basis. By doing this you can reduce your Tax and National Insurance liability and therefore increase your take home pay. Business mileage does not include home to work travel. Business mileage will be given at the following rates. Type of vehicle First 10,000 miles Above 10,000 miles Cars and vans Motorcycles Bikes 45p 24p 20p 25p 24p 20p The umbrella solution must pay you at the appropriate minimum wage (including holiday pay) multiplied by the number of hours that you work. Your business mileage can be used against any excess above this amount. This equates to the bonus element of your pay. If your mileage claims exceed the allowable bonus, the remaining business mileage will be carried forward to future payments. An Example If you earn 1,000 gross salary (before tax and NI are applied) and submit 100 of business mileage, tax and national insurance would be based on a gross salary of 900, rather than It is assumed that you are subject to Supervision, Direction or Control and therefore only business mileage will be allowed (see examples on p.2). FPS Top Tip If you do not use the client portal for your expenses, you must fill out a mileage log as well as your expense claim 1

3 You can claim the following for which details of the postcodes you have travelled between is required: Car mileage Motorcycle mileage Bicycle mileage Please note - It is our policy that all mileage starting or ending at your home postcode does not constitute business mileage. If you feel example 2 below applies, please contact our expenses team. FPS Top Tip All business mileage is subject to random audits. You may have to provide additional proof, such as an in date driving licence Business Mileage Examples Example 1 Home Town: Job Title: Work Location 1: Scope of Role: Cambridge District Nurse Health Centre in Cambridge Visiting patients throughout the county There will be no tax or NICs relief on mileage for journeys from home to the work location or from the last appointment to home. Tax and NICs relief will be available for mileage on the journeys from the work location to the first patient s house and between all patients home locations thereafter during the course of the day. Example 2 Home Town: Work Location 1: Work Location 2: Brighton Branstall Ltd in Crawley (duration: 3 months) Branstal Ltd in Shoreham (duration: 3 days) There will be no tax or NICs relief for mileage on journeys from Brighton to Crawley. Tax and NICs relief will be available on mileage for the journeys from Brighton to Shoreham as this is not the main place of work. 2

4 Reimbursed Expenses You may claim for expenses that you have incurred in the performance of your employment duties, which are reimbursed by your end client. What can be claimed Bus Fares Receipt Required Additional Proof Required Journey details letter Travel Business Mileage Other Flights & Ferries Taxi Fares Train Tickets Accommodation* Congestion Charges* Meals* Parking* Toll Charges* Business Calls Clothing Health Check Professional Subscriptions Tools Training From end client Journey details Journey details letter From end client Itemised bill *Can only be claimed with qualifying business mileage journey For reimbursed expenses it will be assumed that you are Supervised, Directed or Controlled (SDC), so certain expenses aren t available. All claims will be limited to the reimbursed amount indicated on the corresponding invoice. You do not need to log reimbursed expenses as this will be done automatically. All you need to do is submit proof of these claims. 3

5 Key Points All journey details are required to be ed to If you do not use the client portal for your business mileage, you must fill out a mileage log as well as your expense claim Receipts are required for all expense categories together with a copy of your signed timesheet (unless your agency provides this on your behalf) All journey costs starting or ending at your home postcode will be disallowed and will have to be entered under year end expenses. If the expense requires a letter from your end client - to be acceptable this must contain the end client name, normal assignment workplace details, temporary assignment workplace details, duration and be signed off by the end client Costs incurred can only be on an individual basis No grocery or supermarket receipts can be processed for meal expenses Only specialised uniform or personal protection clothing can be logged. Non-specialist clothes are excluded Only short term hotel or B&B accommodation can be processed Only professional subscriptions on HMRC list 3 can be processed Only training related to occupation can be processed FPS Top Tip You must ensure that proof of expenses is provided at least 24hrs before payment is due in order to enable processing Entertaining expenses cannot be claimed 4

6 Year End Expenses As expenses aren t verified or offset as part of your payroll, it doesn t form part of our standard expenses policy. This year end expenses section is simply for your reference. You are able to claim for business expenses that you incur as a result of your contract work. You will have to make this claim on your self-assessment tax return at the end of the year. FPS Group can help you with this, by providing a year end statement of all expenses incurred. What you can claim for will be dependent on two factors for every assignment: 1) Were you under Supervision, Direction or Control (SDC) (p. 8)? 2) Was the workplace temporary (p. 8)? Expenses Available If you are not under SDC and you meet the temporary workplace rules, you have the right to claim for your home to work mileage and related food costs via your self-assessment. If you are under SDC or the temporary workplace rules don t apply, you cannot claim for your home to work mileage and related food costs via your self-assessment. All other expenses incurred wholly, exclusively and necessarily in the performance of your employment duties can be included on your self-assessment regardless of either your SDC or temporary workplace status. FPS Top Tip Supervision, Direction & Control (SDC) is decided on an assignment by assignment basis 5

7 Example 1 - Driver Graham is registered with an employment business that provides him with regular work as a driver. A supermarket contacts the employment business and asks them to supply a suitably qualified driver for a six month engagement, delivering customers online grocery orders to their homes. The employment business contact Graham and he is offered the engagement which he accepts. Graham is provided with an identification card, a polo shirt and a jacket, all of which have the supermarkets logo emblazoned across the front. He is told he must wear the items at all times as he is representing the supermarket. He is told he is responsible for driving his van safely and responsibly and making sure it is refueled, clean and tidy and well looked after. He will make his deliveries in accordance with a schedule he is given each day, which contains the names, addresses and specified times. Graham is provided with procedures governing how to deal with delivery delays and broken items. Graham is also told he will be required to work in the store when not making deliveries and the supervisor will assign him that particular work and instruct him on how it must be done. He completes his six month engagement which has largely entailed making deliveries but with occasional in-store work during quieter times. This work included working alongside the supermarkets retail staff stocking shelves, removing out of date items and placing advertisement notices for special offers as directed. Example 1 - Expenses Status From the start of his engagement Graham has been subject to control: He was required to be professional and smartly dressed in the company attire He had no leeway to choose how he would do his work He was required to compile the customer orders as per the instructions and loaded the van in a specific way His delivery route was pre-planned for him and reported any delays to customers The work he did in the supermarket was controlled and directed by the supervisor and he had no freedom to choose how he did that work Graham could not claim his home to work travel or associated food costs. He could still claim all other expenses he incurred via his self-assessment tax return. 6

8 Example 2 - Locum Pharmacist Sarah is a fully qualified pharmacist who for the last 5 years, has preferred to work as a locum, as it offers her regular work, flexibility and various locations to work on short engagements. Sarah obtains all of her work through an employment agency. The employment agency contact Sarah to advise there is a vacancy available to work in a privately run pharmacy/shop. It is to provide cover whilst the proprietor/pharmacist is on holiday for three weeks. The proprietor tells Sarah she would be working in the pharmacy at the rear of the shop and will be dispensing prescriptions to customers and giving them advice when approached. The shop also has two sales assistants who will deal with sales and assist Sarah as necessary. Sarah sets to work on her first day and for the next three weeks she undertakes her role as required. Sarah also monitors the stock levels of the medicines and instructs the sales staff to order where appropriate. Sarah completes her work at this pharmacy after the three weeks are over. Example 2 - Expenses Status Sarah is fully qualified and experienced in her field, working with two people who are not qualified to instruct Sarah on what to do or how to do it. From the start of his engagement she was not subject to supervision, direction or control. Nobody attempted to, nor had the right to: Oversee the work she was doing Make her work in a particular way Tell her what work to undertake Being an experienced pharmacist Sarah knew exactly how to dispense prescriptions to customers without needing any intervention. She did this as she saw fit, ensuring customer needs were met. The proprietor would not have had a right to subject Sarah to supervision, direction or control as to the manner in which she provided her services. Therefore Sarah can claim her home to work travel and associated food costs at the end of the tax year. She can also claim for all other expenses incurred via her self-assessment tax return. If Sarah s arrangements had been slightly different, she may have fallen foul of SDC: She had been brought in to assist the proprietor/chief pharmacist to dispense prescriptions She was required to work alongside the sales staff in the shop serving customers, stocking shelves and ordering stock as instructed If this were the case, the proprietor would have had a right to subject Sarah to supervision, direction or control as to the manner in which she provided her services. 7

9 Supervision, Direction or Control HMRC define supervision, direction and control (SDC) as follows:- Supervision is someone overseeing you doing work, ensuring that you are doing the work that you are required to do, that it is being done correctly and to the required standard. Supervision can also involve helping you to develop yours skills and knowledge. Direction is someone making you work in a certain way by providing you with instructions, guidance or advice as to how the work must be done. Someone providing direction will often coordinate the how the work is done, whilst it is being undertaken. Control is someone dictating what work you do and how you go about doing that work. It also includes someone having the power to move you from one task to another. If any of the above apply, or could in theory apply, you are under SDC for that assignment. Temporary Workplace Rules Your FPS administered Flex solution operates an overarching contract of employment. This engages employees on a number of assignments, based at different workplaces, during a single period of employment. To be able to claim expenses to a temporary workplace you must have the intention to work on multiple assignments. If you know you will only work on a single assignment during your employment, your workplace is defined as a permanent workplace. A temporary workplace is where your attendance lasts no longer than 24 months. At the point you know that your assignment at that workplace is going to last beyond 24 months it becomes a permanent workplace, except if you spend less than 40% of your time there. Travel and associated costs to a permanent workplace are not permitted. 8

10 Expense Summary Table Expense Type Business Mileage Reimbursed Expenses Logging Inside SDC Logging Outside SDC Business Travel Mileage Transport Driving Charges* Misc Travel Costs* Travel to workplace Mileage Transport Driving Charges* Misc Travel Costs* Other Expenses Category A Category B *Can only be claimed with qualifying journey **PIE can only be claimed with accommodation and only allowed with logging. ***Working from home only allowed with logging. Mileage: Transport: Driving Charges: Misc Travel: Category A: Category B: - car, van, motorbike, bicycle - train, taxi, flight, ferry - toll, parking, congestion charges - accomodation, meals, Personal Incidental Expenditure** - health checks, training - business calls, working from home***, clothing, tools, professional subscriptions, professional indemnity 9

11 To enter your expenses 1) Log in to your client portal 2) Enter business mileage 3) Enter year end expenses 4) Complete SDC questionnaire (SDCQ) 5) Upload recripts if required Most of our contractors use their phones to photograph or scan their receipts and them to our expenses team: Alternatively you can post or fax us your receipts: Post: Expenses, Administration Centre, Ramsey, IM8 1GB Fax: Expenses are always subject to checks and approval from our expenses team, in line with HMRC regulations. Business Mileage is offset against your Tax and NI. These are not reimbursed to you. If your agency or end client provides expenses reimbursement, please remember to attach proof on the client portal to ensure that these reimbursed expenses are provided Tax and NI Free. Disclaimer This policy is based on our current processes and procedures and does not constitute a legal undertaking. Freelance Professional Services Ltd cannot accept any liability resulting from damage or loss from the information contained herein. Furthermore, should any loss occur through the irreplaceable loss of receipts or similar acts, Freelance Professional Services Ltd shall not bear the liability for the loss of income that should otherwise have been paid had the receipt been available. Freelance Professional Services Ltd reserves the right to refuse, without reason, any claims made which it may from time to time deem necessary. In no way should the text contained within this policy be interpreted as to impart a right to claim expenses or tax advice. The Year End Expenses section is simply for reference and does not constitute tax advice and should not be as construed as such. Any claims made to HMRC is based on information you provide and will be undertaken by yourself. FPS Group should not be held liable in relation to any matters concerning your year end tax return. Contact us If you have any expense related queries, concerns or questions please do not hesitate to get in touch. tel web // // // expenses@fpsgroup.com Freelance Professional Service Limited is licensed by the Isle of Man Financial Services Authority. This guide is intended as a brief overview of the FPS Group flexible employment solution and we hold the right to change any of the policies and figures mentioned herein. 10