Dodgy Expense Claims

Well once again, I have been contacted by a contractor who is being told they can use expenses as a way to gain tax relief. Lets take a look at the correspondence we have received. This is part of the initial conversations that were had between the contractor and the umbrella company:

The Umbrella Company stated: “Although receipts aren’t needed for some claimable items, HMRC stipulate that we audit a selection of expense claims for each pay period. So, if your claim is selected for audit you will need to provide the necessary receipts to us otherwise we will have to forward to HMRC for further investigation.

In theory, this all seems self explanatory, until you take a look at the payslip:

As you will see there appears to be an excessive amount of expenses that have been processed, logic says that it is highly unlikely that you would be working for £232.00 to then go on and claim nearly £900.00 in expenses. What make this even more worrying is that this is repeated for the next 4 weeks with nearly identical amounts claimed for expenses.

The contractor continues: “The company explained the extra expenses to me by stating that as they are an accounting company they have certain dispensations etc.” The most worrying thing is that, as confirmed by the contractor, they never incurred any of these expenses, so if HMRC came knocking there would be no receipts to show for the claims made.

When the contractor queried this with the company, they suggested they contact HMRC for peace of mind! At this time no conclusion has been reached, and the company are ceasing to make any further comments.

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