About expenses
There are a range of expenses that can be claimed by contractors and these are fully explained when providing your financial illustration, and documented within our Expenses guide.
The general rule that is applied in determining what expenses are tax-deductible is that they must be incurred “wholly, exclusively and necessarily” in the performance of the duties as an employee of the company. If this test cannot be met then the cost must not be claimed.
Where the test is met there is no limit to the level of expense potentially tax deductible. Hence, no umbrella company can offer you any greater tax relief than another; a claim is based on what business expenses are genuinely incurred.
Unfortunately this issue has been confused by the information and misinformation surrounding “dispensations”.
A dispensation can be granted by HMRC to an employer in order for them to dispense with the requirement to complete certain tax forms (P11Ds and S198 claims) on behalf of their employees.
A dispensation is simply a way of reducing the employer’s administration and can never be viewed as a carte blanche for claiming unreceipted or non-incurred expenses.
You can always ask our friendly and knowledgeable team members for an explanation.
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