Contractors Umbrella Company Umbrella Company Myths

An HMRC Dispensation = Less Tax

WRONG! A dispensation does not affect individual contractors. It does not mean a contractor can pay less tax. A dispensation helps companies which do not have systems that can cope with multiple transactions.

You Don't Need to Keep Receipts

WRONG! You must keep receipts for expenditure which you will later claim as a business expense.

You Can Claim Three Meals a Day

WRONG! "The cost of food, drink & accommodation is not in general an expense incurred wholly and exclusively for business purposes, since everyone must eat in order to live..." HMRC

HMRC's stance is that you need to eat & drink whether you are a contractor or a permanent employee.

Switching Umbrella Companies Gets Me Round the 24-Month Rule on Expenses

WRONG! This rule applies to an actual place of work and not the umbrella company you are with. Workplaces are deemed as a temporary site if you're not there more than 24 months.

Umbrella Companies Protect Against HMRC Investigation

WRONG! If you claim expenses fraudulently you will be investigated. No company can protect individuals from an HMRC investigation.