What are expenses…

There are two types of expenses, expenses you can claim back from the agency and expenses you can offset against tax (claim tax relief on).

The expenses you can claim back from the agency are reimbursed to you in full and you do not pay tax or NI on the receipt of these expenses.  All claims for agency expenses must comply with the agency requirements to enable us to reimburse you.

The “Tax Relief” expenses are those expenses that you incur wholly and exclusively in the course of your business duties.  As a contractor you can currently claim tax relief on legitimate expenses if it is your intention to work via UpperLimit for more than one assignment and you are working at a temporary place of work and will be there, or know you will be there, for less than 24 months.

What expenses you can claim..

HMRC has strict guidelines about what expenses you can legitimately offset and these are detailed below. UpperLimit does not reimburse you these expenses; we offset them against tax which means that this part of your income is treated as non-taxable.

e.g. if your gross taxable pay is £1,000 and you have legitimate expenses of £200, then we would reduce your gross taxable pay to £800. This means that instead of paying tax on £1,000 you would only pay tax on £800

UpperLimit reserves the right to reject any expenses claims that we feel contravene this expenses policy, or have not been incurred wholly and necessarily in the performance of your duties. We also reserve the right to change this policy at any time, where it is necessary to do so to remain within the HMRC guidelines.

Travel expenses cover travel in the performance of the duties of the employment (e.g. travel between sites) or travel to “temporary workplaces”. Travel expenses include associated subsistence.

We offer tax relief on travel and subsistence expenses if the site at which you are working is considered to be a temporary workplace. A site will normally qualify as a temporary workplace if you are expected to work there for less than 24 months.  The 24 months starts from the time that you started working at that site, not when your current contract started.

If at any time it becomes clear that you will work at a particular site for more than 24 months, you must stop claiming expenses from that time.

For example: if it is agreed from the start that you will work on site for 18 months, and you are told at the 18th month that the work will take another 9 months to complete you will only be able to claim your travel expenses for the first 18 months.

The 24 month restriction does not apply if, over a 24 month period, you spend 40% or less of your time at the workplace.  When a contractor spends 40% or less of his time at a workplace all expenses incurred travelling to and from that site are allowed, regardless of the 24 month rule.  This rule must be considered if you work at more than one site in the course of a contract or if you return to a site that you have previously attended.

Sites that are close together are regarded as the same site. When you change site you need to be able to demonstrate a significantly different journey is being undertaken.

Cars & Vans
First 10,000 miles 45p per mile,
10,000+ miles 25p per mile,
Motor cycles 24p per mile,
Bicycles 20p per mile

*Note that the mileage is for each tax year, not each site change.

The mileage rates incorporate the costs involved in running a vehicle including petrol, tyres, road tax, insurance, depreciation and repairs, therefore claims for “Wear and Tear” will not be allowed.

You should keep all receipts showing that you have spent roughly half of what you are claiming in mileage for each claim. This is so we can verify that you aren’t car sharing.

We will need to see receipts for all car parking, tolls and congestion charges.
If you buy a monthly travel card this can be claimed at the time that the Expense is incurred. If you have an oyster card please get a receipt for purchase otherwise we will not be able to process it.
Subsistence is designed to cover the costs of meals that are eaten whilst at the temporary place of work.  The allowance is not designed to be a daily allowance, HMRC view is that everyone has to eat lunch whether at a temporary or permanent place of work!  However, if you are travelling, or working away from home at a temporary workplace, it is likely that you will purchase a meal at a cost in excess of normal.  If that is the case then the cost of the meal is part of the expense of travel hence lunch can be claimed.

One Meal (5 hour) rate = £5 (This is where the working time, including travelling to the temporary site exceeds 5 hours)

Two Meal (10 hour) rate = £10 (This is where the working time, including travelling to the temporary site exceeds 10 hours)

*Breakfast – If you leave home before 6am £5.00

*Late Evening Meal – If you finish work after 8pm £15.00

*These are for use in exceptional circumstances only and are not intended for employees with regular early or late work patterns.  Should you wish to claim the breakfast or late evening meal rate you will need to supply a copy of the receipt and the reason for the claim – for example, if you work in IT and there has been a major server crash, or you work in Marketing and have a product launch.  Finishing after 8pm or starting before 6am as part of your shift pattern or working hours are not sufficient reason to allow you to claim.

You don’t need to send receipts to us when you are claiming the normal One or Two meal rates, however the allowance is based upon you having incurred a cost, and therefore you MUST retain receipts for a period of 6 years in case of audit ( Please see the section below)

Phone top up cards cannot be claimed.  To claim phone calls an itemised bill must be received, with all work calls highlighted and totalled.  The line rental and VAT cannot be claimed.

Stationery for sending in expenses to us is claimable ie stamps and envelopes.  Please send in a copy of receipts with a non-mileage expense form.

These are allowable expenses provided that they are incurred wholly, exclusively and necessarily in the performance of your duties.  For example a golf club subscription is not allowed, nor is a language course.  In other words, they have to be relevant to the assignment you are currently undertaking.

Receipted laundry costs are allowed to be off-set.  This is for overalls only, and not for general work wear such as suits, or items of clothing that could be worn outside of the working environment.

The cost of the provision of specialist clothing and safety equipment such as hard hats, safety boots, florescent jackets etc. is allowed.  As is the cost of clothing supplied such as corporate uniform / protective clothing, provided that any such clothing is prominently and permanently labelled so as to identify the wearer as an employee of the company and is not suitable for everyday wear outside of the working environment.

General Office attire is never allowed to be claimed.

You can scan and upload or email receipts to us, if you don’t have access to a scanner you can take a picture with a camera phone (although it must be of an acceptable quality so that we can read all the relevant information clearly).  Where you do this, the original receipt must be retained and be available to be inspected if requested on audit.

Anyone can be randomly audited by HMRC and therefore for all receipts it is your responsibility to ensure they are available for a period of 6 years should they be required.

As part of our processes we are required to undertake random audits on our contractors’ claims.  When you are selected for audit we will write to you and request to see the receipts for any un receipted items claimed.  These must be sent to us in a timely fashion, and failure to do so will prevent us from processing further expenses whilst an audit is ongoing.