Working away or travelling long distances can be expensive. However, for the right contract, it may benefit you financially, particularly if your end client or agency has agreed to reimburse you for certain costs you incur along the way – we call these chargeable expenses.
What are Chargeable Expenses?
These are expenses your agency has agreed to reimburse you with, even if you are under Supervision, Direction or Control. They can be offset against your tax and National Insurance (NI) providing
- They are allowable
- There’s a written claim
- You can provide evidence (your receipt)
- Confirmation that your agency are reimbursing you for the expense
What Chargeable Expenses can I claim?
Chargeable expenses can include the cost of a meal, a drink (limited to one alcoholic beverage), travel, parking, tolls, accommodation or even entertaining a client. To be allowable they must be reasonable, incurred wholly, necessarily and exclusively for your assignment and travelling must not form part of your regular commute.
How does it work?
Your umbrella payroll provider must receive the additional amount from your end client or agency to cover the claim, the chargeable expenses will then form part of your gross income, meaning they will be subject to tax and NI.
However, if you make a claim through your umbrella payroll provider, the expenses can be offset against the tax and NI applied to your chargeable expense, meaning you will benefit financially, as you are essentially getting the full reimbursement for the expense. This means that you might have to claim twice in effect for the same expenses – once from your agency and once from your payroll provider, however it could be the difference between making your assignment work and being out of pocket.
Want to know more about what Danbro can offer?
If you’re unsure of how this could work or you need guidance on how to submit a claim please contact our helpful customer advisors who will be able to assist you.