Expenses

Do not assume expenses are free of tax

There are very detailed regulations to determine whether an expense claim in taxable or not.

The UK regulations can be found in HMRC Employer Further Guide to PAYE and NICs – CWG2. Any expenses paid to you will comply with the Guide.

Another useful Guide for you to refer to is 480: Expenses and benefits.

The employer is required to keep records of all payments and where necessary report them to HMRC at the tax year end on the form P11D (in the UK). Most business travel, including subsistence costs associated with business travel, no longer need to be reported on the form P11D nor included in the employee’s personal tax return. However, you must still confirm the reason for every expense claim and send copies of the receipts. Any unexplained expense will be taxable by default at the year end.

Expense Claim Process

You are responsible for all the expenses incurred on your assignment. This should be taken into consideration when negotiating the terms of an assignment.

Clients often agree to reimburse expenses incurred by consultants while working on assignment. This could be a simple matter of paying for travelling expenses to another client site as an essential part of the job.
Charles Marcus is able to invoice the client for expenses and reimburse the expenses to you.
You may prefer to submit expense claims direct to the client. Most clients will not agree due to the costs involved in processing the claim.
You will need to email Timecards before submitting your first expense claim.
An expense project will be created for you to submit your expense claim online. This follows the same procedure as submitting your other timecards.
Email a copy of the receipts or invoices relating to the expense claim to sgreene@charlesmarcus.com.

Many expense items include an element of sales tax.
This is GST in Australia, VAT in the UK, TVA in most of Europe.
VAT on expenses is very rarely recoverable.
The amount entered in the timecard submittal must be the gross amount, including VAT.
It often results in the client paying less than the amount of the invoice. Inevitably, the reimbursement paid to you is based on the amount received from the client.

The expense invoice will be shown in your portal report as normal.
The receipt from the client will also appear in the portal report.
The management fee will be calculated as for all receipts.
The fee will be rebated when the reimbursement is made to you.
The reimbursement of the full expense claim will be made to your local bank account.
This transfer will appear in your portal reports.