Client asking for receipts for expenses with invoice?

[Matt-LW]

Hi,

Hopefully a quick question i'm looking for some help with:

I have one client that sends out a Purchase Order for the agreed amount, and the asks for receipts for any expenses (Like food or car parking). As a subcontractor I don't really want to have the hassle of sending over copies and not to mention would expect to add a small margin to cover the additional time spent accounting for....

Anyway, question is: How would HMRC view a subcontractor sending in receipts and billing the same amount on? Could that fall foul of been viewed as an employee (or a tick in that box in a wider view??)?

Thx

m

 

[Newchodge]

You quote a price. It is entirely your business and no-one else's if you have paid car parking or not, unless you show that charge separately on your invoice. Which may not be sensible. Even if you do show it, unless your contract states that you will charge for certain costs at the cost to you, it is perfectly acceptable to pay 50p for parking and charge £1.00. Tell them to mind their own business, in the nicest possible way.

 

[Matt-LW]

Unfortunately in my line of work no one asks for a quote, they know (or have a rough) idea of your 'day rate', which unsurprisingly everyone's is fairly similar... Some companies will sort out things like travel costs and add it in to the fee on the PO, some will say bill what it costs (that means they don't have to spend time working it out in advance), as long as it's reasonable.

And unfortunately sub-contracted labour is often treated as part time employees (by such small companies), probably because the employees don't know any better and all they know.

So yes the point of my asking was to find a polite way of saying 'mind your own' e.g. if HMRC would take a dim view that would be a good way.

 

[Newchodge]

Are you, in reality, an employee?

 

[Matt-LW]

Are you, in reality, an employee?

That is a question I regularly ask myself, but not what I asked or require comment on here (whole other question that and not what I am concerned with within the context of this thread, so apologies if that's a little blunt).

m

 

[Newchodge]

You're in a public orum. You don't contol comment.

 

[Ken Moorhouse]

Are you registered for VAT?

If not, just wondering whether your customer is using your receipts to claim VAT back, which sounds naughty to me if they are. I take it you always use your company name on any receipts for stuff you sell on? Otherwise it might look like a Petty Cash Voucher submitted by an employee of theirs.

 

[paulears]

That's what I was thinking - you can't include a receipt that you need if you've handed it to the 3rd party. You provide them with your invoice, which details your expenditure - so if they agree to pay this kind of thing - what's their beef, unless it's VAT. Maybe you could provide them a separate invoice for the out of pocket expenditure.

In my case, the client picks up the cost of fuel used to go to a dictated venue, plus they pay for subsistence like hotel if we paid for it, and a contribution for food - so we invoice £25 for food - even if we don't have time to eat. The actual receipts are irrelevant, and we keep those for our accounts.

 

[Matt-LW]

Cyndy, your welcome to post what you like, and I appreciate your input, but if its irrelevant to the question asked, so whats the point?? Just saying an apologies if a little blunt. I could type many many pages on the employment status subject, but that not what this question was about.

ta

 

[Matt-LW]

Yes I am VAT registered.

Client is not using the receipts to claim back VAT, just to check up on what people are billing them for for things like food and taxi's, as they would an employee I would hazard a guess at.

What I always find interesting is that I charge the full receipt amount and then put VAT on the total, no one (across several client that ask the same) have ever questioned that, which give me a very small 'fee for the hassle'. Which is another pointer it's as 'treat as an employee thing'...

Nothing sold on, this is purely for things like taxi's, food, maybe hotel rooms (if someone has messed up the booking and it needs paying there and then) etc. that are expected to be billed back to the client.

Paul. I think we are in a similar or the same industry. Some clients just want to see evidence with expense claims, I've not problem with that for anything out of the ordinary, but things like car parking, food etc one has to cover on the spot and then bill on, which that have a fairly good idea what the cost will be, is just a PITA to administer (and slows down sending out invoices...

And yes, I keep my receipts, they go in my accounts / VAT account for my records (never had anyone expect to take the originals).

Yes I do the same as you, just got one client that asks for receipts for PD's.. which prompted my question, I don't do enough work for them to worry that much (usually a couple of repeat jobs a year and a few one off's when they are busy..).

Ta

m

 

[Alan]

Just tell them ( bluntly if you like ) that you will not provide the receipts, to protect them from any HMRC investigation which could infer you are an employee, in which case they retrospectively could become liable for Employee NI etc, so you are doing them a favour protecting them.

 

[Gecko001]

This client might have been caught out by a previous contractor over-charging on expenses. Once bitten, twice shy.

I see nothing wrong with giving them receipts or other proof of your costs. I actually do not see it as generally acceptable to add a little for admin to expenses unless agreed with the client, even if you are self employed. Exceptions are perhaps printing on your own printer. Then you could charge the going rate for getting them done say at professional printers and not just for the paper and ink used. Another exception is perhaps not passing on your customer discount to the client

PS. You could just say no to the client's request, but obviously you risk losing a client.

 

[paulears]

When I am looking at maybe well over a grand for expenses paid, but not going to be recouped for at least a month after the invoice date, sensible adjustments are just like any other business expense. If I am invoicing for perhaps three people's contribution to a project, I do not invoice what I actually receive an invoice from the other person? If they invoice me £180, plus VAT, I'm likely to charge that at £240 + VAT If I can source something at a special rate, why would I pass that on - any additional margin is fine if the end product is still competitive.

Matt and I's world is a little odd in how it runs - one of my regular and very large clients got a new accountant. I had to do more petty cash spreadsheet returns than usual, because he wanted to track expenditure more closely than the old one - so weekly for ten weeks, but an extra one every time I requested more cash. He wasn't happy with one entry's description which was vague. Groundsman's unexpected supply. I changed it to inducement to groundsman. INDUCEMENT - more details, immediately! I changed it again to Bribe to groundsman, £200 in ten pound notes in a white envelope on Christmas Eve for the unofficial loan of an electric golf cart, including delivery and collection. He told me he would be calling the Chairman immediately. The Chairman worked out what was going on in a flash, and that was that sorted! At an HMRC inspection a few years back, there were two questions. What had I done with £400 in cash taken from my personal bank account each week. "I gave it to a Romanian dwarf who couldn't have a UK bank account" and the other question was why I had bought 25 pairs of M&S white ladies pants. That was another story.

 

[Chris Ashdown]

You don't do much work for them so i guess not many receipts , so on each of these jobs why not just take a photo of the recept as you get them and then forward them with invoice, maybe a minute every invoice

We used to state that, "any incidental costs outside the normal contract, would be charged at cost plus 25%", and never had any complaints

 

[Gecko001]

When I am looking at maybe well over a grand for expenses paid, but not going to be recouped for at least a month after the invoice date, sensible adjustments are just like any other business expense. If I am invoicing for perhaps three people's contribution to a project, I do not invoice what I actually receive an invoice from the other person? If they invoice me £180, plus VAT, I'm likely to charge that at £240 + VAT If I can source something at a special rate, why would I pass that on - any additional margin is fine if the end product is still competitive.

Matt and I's world is a little odd in how it runs - one of my regular and very large clients got a new accountant. I had to do more petty cash spreadsheet returns than usual, because he wanted to track expenditure more closely than the old one - so weekly for ten weeks, but an extra one every time I requested more cash. He wasn't happy with one entry's description which was vague. Groundsman's unexpected supply. I changed it to inducement to groundsman. INDUCEMENT - more details, immediately! I changed it again to Bribe to groundsman, £200 in ten pound notes in a white envelope on Christmas Eve for the unofficial loan of an electric golf cart, including delivery and collection. He told me he would be calling the Chairman immediately. The Chairman worked out what was going on in a flash, and that was that sorted! At an HMRC inspection a few years back, there were two questions. What had I done with £400 in cash taken from my personal bank account each week. "I gave it to a Romanian dwarf who couldn't have a UK bank account" and the other question was why I had bought 25 pairs of M&S white ladies pants. That was another story.

The OP did not say that these "expenses" included work done by sub-contractors or self-employed people. This must be a very special industry working in another dimension if "expenses" on an invoice include these costs!! You certainly will want to add your mark up to them, even 100% if you can get it. Your mark up in those cases should certainly not be disclosed to anybody, especially your client.

 

[Ken Moorhouse]

As I understand it there may be areas where marking-up ancillary costs could be of interest to HMRC. For example a company exempt from VAT for whatever reason could be considered non-exempt because of these mark-ups, and (if this is the case, perhaps an accountant could confirm?) such entities should therefore rigorously match all expenses against their corresponding recharges.

 

[Matt-LW]

Thanks for all the replies, good to get other peoples view etc and on subjects like this interesting to see how some people view things (as in treating sub-contractors as employees..).

Haven't really found the answer I was looking for yet, had hopped there would be a good argument for HMRC viewing the practice I mentioned in a dim light....

The problem with my industry (as one of the first posts highlighted) is that most sub-contract labour is indeed really just disguised part-time/casual labour..(in my view) all be it very skilled... It's the way it works and until the tax man clocks on and has a look (so small an industry in the grand scheme of things they probably won't ever bother). And it is indeed very out of the 'normal' in the way things work etc as Paul mentions. The arrangement as it is generally works for both suppliers and companies and most people who are just providing labour keep mouth shut and accept it, because it works for them.

So most companies deal with there sub-contractors, providing only labour services, more as employees than anything else.... Which is where my bug bare is as I sit on both sides of the fence. I supply labour only to lots of clients, some I provide labour and equipment and I also provide services (as in the equipment and the labour). So I get frustrated when some clients treat 'Freelancers; (case in point, I've just had an email reply to a PO query, from the same company saying ' We don't PO for a day and a half, just in case it doesn't go that long and we still get billed for it...' .........).

Taking photos of receipts is fine, but when a 'day' is generally at least 10-12hours on site, quite often on your feet all the time... not usually a 'proper' lunch break etc then the last thing I am thinking about is taking a picture of a receipt as I'm getting lunch... Do it when I get home? I guess, but when its a choice between 4 or 5 hours sleep or doing some admin, I bet you can guess which it is.
And while it is a fairly simple thing to take pictures and send them over, if my receipts are at the office for instance and I am on the train, or in a hotel away from home trying to catch up on some admin, then that delays sending out invoices which hen delays payments (because 30 days is always a goal, not a limit....). The times I'm working for these sort of companies is always when it's busy (why would you use sub-contracted labour when it's quiet and your employees are available...!).

Not to mention the bigger question of should a bonafied sub-contractor not be in a position to add a small margin to cover there costs: things like time, credit fees, and god forbid a 'profit margin'. My biggest bugbear been this are companies that off course are charging every last thing out to there clients and adding a profit margin, they don't sub-hire equipment, charge out at cost and show there end clients receipts... now do they.........

They may have been burnt before, but I don't think it is that as the PO's say something along the line of 'PD's: up to £20 with receipts submitted' So they wont accept a claim above what they have budgeted (and presumably charged on to there client). All a bit of having your cake and eating it too.... (imo)


Gecko001 These 'Expenses' are generally the way it works so these companies don't have to ask sub-contractor's for a quote each time they book someone. These are companies with very dynamic labour and skills requirements, some moths, like now, are full on busy and sometimes are dead quiet and tick over...

They know what individuals charge as a 'day rate' so can easily work out multiples of that and estimate costs for food (away from home and quite often in places where food is at a premium and certainly nowhere to heat up a tin of beans etc), travel to site, parking etc to work out there costs without asking each person for a quote and waiting for it to come back (that would also require giving out details of the job, most of the time info received is day, location and time to be there.. *cough* employee?? *cough*.....i know... )

Not to mention that most people half decent at there job would want to work for a single company

m

 

[Gecko001]

OK I think I see what the situation is now. If you have a client who wants to see receipts for expenses such as food and carparking incurred by the labour you supply, it causes you hassle and you want to charge for this hassle by adding an admin % onto the expenses on your invoices. That might work but by actually putting it on an invoice as an admin cost related directly to having to send expense receipts what you are doing is telling your client that full transparency regarding expenses costs you extra. Surely that will seem very suspicious to any client. I would try to cover you costs in sending receipts in other ways such as increasing your mark-up on items on the invoice such as labour costs.

 

[Matt-LW]

OK I think I see what the situation is now. If you have a client who wants to see receipts for expenses such as food and carparking incurred by the labour you supply, it causes you hassle and you want to charge for this hassle by adding an admin % onto the expenses on your invoices. That might work but by actually putting it on an invoice as an admin cost related directly to having to send expense receipts what you are doing is telling your client that full transparency regarding expenses costs you extra. Surely that will seem very suspicious to any client. I would try to cover you costs in sending receipts in other ways such as increasing your mark-up on items on the invoice such as labour costs.

It's not that I want to charge an admin fee, I just don't want the overhead of having to sort and send copies of receipts, simple as that... (I'm not a paperwork person.. slows down invoicing and I do my receipts quarterly when I sort the VAT return out).

And to be totally honest I don't always keep food receipts, if it's say £5.00 in Tesco for lunch i'm not going to bother trying to put that through my accounts So if I can bill it on as £7 or £8 that covers me for carrying the credit for 30+ days and the tax on it.

Anyway the original question started with my looking for a good reason for saying 'not sending you receipt copies', if HMRC would take a dim view of and there was a unanimous consensus on that then that would be a good argument to put forward.

But it also raised the similar question in my mind of: Should a Bonafied Sub-Contractor ever be asked to provide receipts for expenses.

I have no issue at all if it's for something out of the ordinary and more than a trivial cost, for instance if I have to go to screwfix and pickup some supply's in an emergency. But things like food or putting fuel in a van that can easily be estimated and are expected... Obviously there is a big grey area that muddies the waters because the majority of Sub-Contractors are in-fact disguised employees (imo) and everyone is kidding themselves in my industry.

At the end of the day it's a problem of small company mentality, used to dealing with employees as it is employees dealing with crewing and accounts, trying to eeak every penny out of every job and thinking they can push around there Sub-Contractors because people generally want the work so wont rock the boat and are generally happy to put up with (or don't actually know any better) the arrangement. Those at the bottom of the food chain are the easiest to push around.

m

 

[Chris Ashdown]

Why would the company pay for your food?, I can understand travel and accomodation, but anything else I would have thought is your responsibility after all if not employed then you would still buy your own food. For employees it is often accepted as all costs but as a ex freelancer we never go food thrown in

 

[Matt-LW]

Why would the company pay for your food?, I can understand travel and accomodation, but anything else I would have thought is your responsibility after all if not employed then you would still buy your own food. For employees it is often accepted as all costs but as a ex freelancer we never go food thrown in

Working away from home, long hours (12+ it's not practical to bring enough food), job locations: Anything near by event venues are generally geared towards fleecing the guests so premium prices.... (hotels been the worst), nowhere to microwave a tin of beans etc, quite often don't get time for a lunch break (not an office job where you get an hour to go find lunch), if running a show going off site is quite often not an option, especially at lunch/dinner time when the job is live.

There's no argument about the expense been legitimate (in terms of billing back to my client) as they have put on the PO 'PD up to £20.00 with receipts provided'. As I said, the way they do it saves them admin overheads of asking contractors for quotes for each and every job. And it's been accounted for there end and billed on to there client in the job cost...

Whole other question what HMRC would make of it from a tax stand point and that is why I don't always bother with receipts for my own records, for food in particular.

As Paul said further up, it's a bit of an odd industry.

 

[Gecko001]

I do not get it. Surely if you charge expenses, you have to keep records so that if you are asked for a breakdown of them you can provide it. And if you have a client who is a bit fussy or there is a HMRC investigation you have the receipts to back up your breakdown It is just standard business practice. It takes up some time and it is boring and a bit of chore but it is something that needs to be done. It is like filling out your tax return or insurance forms, it is a chore but we have to do it.

Business people from small builders to multi-millionaire consultants do keep receipts of small items, even it is 50p for a pen, or 90p for a box of paper clips and they do it whether they are in their office or on the road. If you are on the road, all it takes is to throw the receipts into your wallet or glove box of the car and every so often put the receipts into a tray or box when you get back to your office. It really does not take very long.

 

[scstock]

I do not get it. Surely if you charge expenses, you have to keep records so that if you are asked for a breakdown of them you can provide it. And if you have a client who is a bit fussy or there is a HMRC investigation you have the receipts to back up your breakdown

Not if, as the OP said, they do not record these as expenses in their own accounts. It's their choice to, in effect, pay an extra 20% or more on these costs by not accounting for them as a business expense.

 

[Matt-LW]

I do not get it. Surely if you charge expenses, you have to keep records so that if you are asked for a breakdown of them you can provide it. And if you have a client who is a bit fussy or there is a HMRC investigation you have the receipts to back up your breakdown It is just standard business practice and it takes up some time and it is boring and a bit of chore. It is like filling out your tax return or insurance forms, it is a chore but we have to do it.

Business people from small builders to multi-millionaire consultants do keep receipts of small items, even it is 50p for a pen, or 90p for a box of paper clips and they do it whether they are in their office or on the road. If they are on the road all it takes is to throw the receipts into their wallets or glove box of the car and every so often put the receipts into a tray or shoe box when they get back to their offices. It really does not take very long.

Eeerrr what?? I think your getting a little confused here.

I only need to keep record of receipts if I am trying to claim them MYSELF as a business expense on MY tax and/or VAT RETURN. Which I do, where I think things will fly OK with the tax man (subsistence for instance been a bit of grey area and not been something I would realistically consider will unless I'm away from home for more than a day). I can put what I want on an invoice... my time for instance does not have an associated receipt....

My client in question accepts that people need to be fed when they are away from home, working long hours etc. That's not in question, it's provisioned for on the PO they send out where applicable.

So your getting away from the question asked (and probably trying to understand an odd niche area of work.. Nothing in this world fits neatly into the tax mans little boxes...)

I think 'Expenses' is a bit of a red herring or the wrong term to use here as it is causing some confusion (sounds like something an an employee would need to do....). It is costs of doing business that anyone properly quoting for a job would include in the fee quoted. But my world does not work that way, as said previously, clients know a basic 'rate' a given 'freelancers' on there crew list charges. The client knows what is required for a give job, so they budget for food, travel, hotels etc. so they can easily work out what they need to quote to there client, without having to wait for all there 'freelancers' to get back to them with a quote for each and every job.

So my PO received say something like ' Supply of technical services, times, where to supply to, has my basic 'Day rate' figure for the number of days required and then PD's max £25 and travel cost with receipts submitted with invoice only.

This particular client wants to see receipts for this particular part of there PO (PD's and travel costs, by that I think they mean taxi's not mileage as that impractical... before anyone asks).

I could put up my 'Day Rate' but then I become noncompetitive with anyone else and then don't get any work from them. The admin system would not be able to computer that I had included PD's already so they do not need adding and on jobs that don't require I would also be to expense as I would have accounted for where not required. Again everyone should really be quoting per job.....

My question is merely about how the taxman would view a subcontractor submitting receipts to a client and billing on at cost, not putting any form of a markup on. Thread is way off topic on that.

I would think that stinks of disguised employment in there eyes. I don't see why I should providing copies of receipts, because I can't then put a markup on to cover my costs like credit card fee's, time dealing with etc I'm a business at the end of the day NOT an employee so why should I not be able to markup things to cover my time in dealing with, especially when my time is one of my biggest assets and commodities??!! Unfortunately small business sometimes want it both ways, the tax benefits and lack of payroll etc overheads of using sub-contractors and the possitive 'benefits'' of a casual/part-time employee.

m

 

[Gecko001]

I have assumed that the OP's quoted this client a certain amount plus expenses (ie the expenses part is variable depending on what those expenses amount to). It looks like the OP has agreed to a different arrangement with this one client where it is a lump sump contract whose price includes all expenses. If that is the case, it is quite simple, tell them that you cannot give them receipts and explain the reason why ie. it is a lump sum contract and your quotation price includes all expenses.

To avoid confusion in the future, if your lump sum quotation price includes expenses, then you should make it clear in the quotation that your price "includes all expenses and disbursements".

PS. You should perhaps refer to the purchase order before contacting the client as they might have certain terms and conditions on it which could apply unless you disputed them at the time.

 

[Matt-LW]

I have assumed that the OP's quoted this client a certain amount plus expenses (ie the expenses part is variable depending on what those expenses amount to). It looks like the OP has agreed to a different arrangement with this one client where it is a lump sump contract whose price includes all expenses. If that is the case, it is quite simple, tell them that you cannot give them receipts and explain the reason why ie. it is a lump sum contract and your quotation price includes all expenses.

To avoid confusion in the future, if your lump sum quotation price includes expenses, then you should make it clear in the quotation that your price "includes all expenses and disbursements".

You were correct in the first assumption, base fee plus reasonable costs. I've tried to explain in the post just above (probably posted nearly at the same time), hopefully makes sense?!.

Expense (/costs of business for a particular job) are variable based on where the job is, how long it is etc. Clients don't really provide enough information to do a sensible quote and they don't want to be dealing with the admin of it all. Usually a phone call or email ' Are you available on XYZ, great can we book you? Yes, Great put it in the diary, will send over details soon' Meaningful details then usually don't arrive until just before the job , that if the booking wasn't made a only a day or two before the job.....

Anyway not at all related to the question asked.. The way it works isn't up for debate, one person trying to do it by the book is not going to change the way things are done.... until the tax man takes a look at this small area of business and points out the elephant in the room anyway....

If my clients ever asked for a quote it would be fine... but they don't... way it is...

m

 

[Newchodge]

To answer your original question: If HMRC ever carried out an investigation, this aspect may form a very small part of the evidence as to whether you are an employee or not. It would not be conclusive either way. If there were an investigation there are a number of other issues which may cause them concern, particularly the fact that the contractors seem to have no say in what they charge.

I would venture to suggest that the issue over providing receipts is symptomatic of the unusual working relationship, and there is no stand alone answer as to whether you should or should not provide them.

 

[Matt-LW]

To answer your original question: If HMRC ever carried out an investigation, this aspect may form a very small part of the evidence as to whether you are an employee or not. It would not be conclusive either way. If there were an investigation there are a number of other issues which may cause them concern, particularly the fact that the contractors seem to have no say in what they charge.

I would venture to suggest that the issue over providing receipts is symptomatic of the unusual working relationship, and there is no stand alone answer as to whether you should or should not provide them.

Thanks Cyndy, that's the sort of answer I am looking for.

On the last part, I would have though it very odd for a sub-contractor to be providing receipts as for one there can be no markup or profit margin added, as any business would surly want to do (and wouldn't HMRC expect??), where as an employee would simply pass on for reimbursement? So I find that comment interesting (ignoring the big elephant....).

Or am I way off the mark?

m

 

[Newchodge]

On the last part, I would have though it very odd for a sub-contractor to be providing receipts as for one there can be no markup or profit margin added, as any business would surly want to do (and wouldn't HMRC expect??), where as an employee would simply pass on for reimbursement? So I find that comment interesting (big elephant not withstanding..).

Or am I way off the mark?

I agree entirely. It is like asking a plumber to supply and fit a bathroom and then expecting the supply cost to match the cost paid by the plumber and proved by the receipts. However it is a circular (or large elephant-shaped) argument.

It can't harm to use the HMRC argument and point to all the recent court cases that have gone against the employers who didn't want to be.

 

[Gecko001]

I agree entirely. It is like asking a plumber to supply and fit a bathroom and then expecting the supply cost to match the cost paid by the plumber and proved by the receipts. However it is a circular (or large elephant-shaped) argument.

It can't harm to use the HMRC argument and point to all the recent court cases that have gone against the employers who didn't want to be.

I would just say no. I would not second guess the client's reason for requesting receipts by mentioning HMRC - you could be wrong that the reasons that they are requesting the receipts is anything to do with tax. It could be only you that is bring up tax, and if it was not in the clients mind and they did every thing by HMRC rules, then they might wonder what is going on.

If they do not pay in full, then take them to court.

 

[Newchodge]

I would just say no. I would not second guess the client's reason for requesting receipts by mentioning HMRC - you could be wrong that the reasons that they are requesting the receipts is anything to do with tax. It could be only you that is bring up tax, and if it was not in the clients mind and they did every thing by HMRC rules, then they might wonder what is going on.

If they do not pay in full, then take them to court.

I think you are missing the point.

A contractor tells their client what they are charging. The client has no right to check expenses by demanding receipts, for anything.

A client requiring receipts before they make payment is treating the contractor as an employee, giving credence to the idea that the contractor is not a contractor, but is an employee

 

[Gecko001]

I think you are missing the point.

A contractor tells their client what they are charging. The client has no right to check expenses by demanding receipts, for anything.

A client requiring receipts before they make payment is treating the contractor as an employee, giving credence to the idea that the contractor is not a contractor, but is an employee

The OP as far as I can see quotes a rate for labour (provided by self-employed people) plus expenses.

Of course normally if you get a job from a client and you sub-contract it out to others, it is no business what you pay the sub-contractors. However, if the client wants to come to an arrangement to pay the expenses based on the exact amount of the costs of the expenses then the only way to do it is by asking for receipts. I cannot see why that cannot be done if both parties are agreeable. It adds hassle as you have to chase your sub-contractors for receipts, take copies of them and pass them on to your client.

You seem to be implying that just because a sub-contractor issues an invoice for say 20 hours @ £10 per hour = £200 plus £20 for expenses and supplies receipts for those expenses or keeps receipts for those expenses in case he is asked for a breakdown of the expenses, that makes him an employee. If that were the case many solicitor would be considered employees of their clients.

 

[Matt-LW]

The OP as far as I can see quotes a rate for labour (provided by self-employed people) plus expenses.

Of course normally if you get a job from a client and you sub-contract it out to others, it is no business what you pay the sub-contractors. However, if the client wants to come to an arrangement to pay the expenses based on the exact amount of the costs of the expenses then the only way to do it is by asking for receipts. I cannot see why that cannot be done if both parties are agreeable. It adds hassle as you have to chase your sub-contractors for receipts, take copies of them and pass them on to your client.

You seem to be implying that just because a sub-contractor issues an invoice for say 20 hours @ £10 per hour = £200 plus £20 for expenses and supplies receipts for those expenses or keeps receipts for those expenses in case he is asked for a breakdown of the expenses, that makes him an employee. If that were the case many solicitor would be considered employees of their clients.

Would a solicitor not likely be an employee of a limite company or an LLP and not a self-employed person ?? So compleatly different situation??

m

 

[paulears]

I'm wondering if the client is just wanting to have the receipts so they can submit them as proper expenses of doing business, and using them formally - where most treat PDs as non-expenses, and just additional crew costs?

I claim all my incidental expenses using the receipts as evidence. Anything I add to an invoice is really just extra sundry costs for the client, usually limited by the PD top out - usually 25 quid, but I also a subsistence payment added onto my fee. For some jobs I will get the union rate for the job, plus another union agreed figure for the subsistence. The actual food/hotels/digs provide receipts which I claim as expenses. The production company have no receipts for these payments and aren't interested in them. In my particular case, the status of people like me has been agreed with HMRC - Those people with a URL and VAT registration, as sole-traders would invoice the production company. People without URLs were PAYE, and some particular job roles would automatically be PAYE. There have been some quite expensive mistakes with HMRC in the past, and it got settled with sensible results - in the end. Oddly, I do some occasional relief camerawork and I cannot invoice the BBC, I must be treated as PAYE, because something called a Lorimer Letter is required from HMRC. I attempted to get one, and proof of work in certain job roles is required - so Director of Photography, or Lighting cameraman on half a dozen contracts means a Lorimer letter can be provided and BBC will accept an invoice. Cameraman, or camera operator is not an acceptable job title for a sole-trader. Independent production companies seem to be quite happy with any term as long as they have an invoice.

 

[Gecko001]

Would a solicitor not likely be an employee of a limite company or an LLP and not a self-employed person ?? So compleatly different situation??

m

Many solicitors are sole practitioner sole traders, i.e. self employed.

 

[Matt-LW]

I'm wondering if the client is just wanting to have the receipts so they can submit them as proper expenses of doing business, and using them formally - where most treat PDs as non-expenses, and just additional crew costs?

My assumption is they are just been tight.. small company mentality and treating sub-contractors as employees where it suites them.. I may be wrong in that, but I don't think so.

What gain is there from collecting copies of receipts, my invoice is sufficient to account for the cost? And I would have though more work to collect and administer receipts for any other purpose?

My other bug bear (beyond the admin over head) is that I am effectively providing credit for 30+ days, which could well cost me money, and I can't cover that cost. I'm a business at the end of the day, not an employee, so why the hell shouldn't I be able to and god forbid, even add a small profit margin if I wish? Is a funny one and two sides to the fence.....

 

[JEREMY HAWKE]

I am baffled by this ! It should be so simple

You give them an invoice and that's it I don't even know how you fell into this ridiculous trap of giving them receipts Its none of their concern .

As @Newchodge has said you are in reality employed but you don't want to talk about that and that's the problem

 

[Matt-LW]

I am baffled by this ! It should be so simple

You give them an invoice and that's it I don't even know how you fell into this ridiculous trap of giving them receipts Its none of their concern .

As @Newchodge has said you are in reality employed but you don't want to talk about that and that's the problem

It should be and it is rather baffling... It's a case of a small company (and they are not the only one), wanting there cake and to eat it, imo...

That's kinda my argument, my invoice is there receipt and all they should be concerned with, I'd even say 'fair enough' if I tried to add on something out of the ordinary/large cost, but for things they have already estimated and know about... just a PITA...

Yes as I have said further up, it is really a question of disguised employment/employment status, not that I don't want to discus, more than happy to (and could go on for days about..), but not in the confines of this thread as that wasn't the question I asked, so not relevant to this discussion.

 

[Chris Ashdown]

Is it a case where the self employed person is putting the expenses down in his books as a business cost as if he paid the money , yet at the same time being reimbursed by his client thereby using the expense twice

Normally you would just fill in the customer form for expenses and get reimbursed by them and have no reason to put it through his books. therefore he does not require to keep proof to HMRC

 

[JEREMY HAWKE]

I would just tell them to do it my way or stick it !
Are you actually getting rich from this or no ?