RACS Group Helpline... EXPENSES CLAIM PROCEDURE GUIDE. Introduction

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1 Introduction What are business expenses? Genuine BUSINESS EXPENSES are those that are incurred wholly, exclusively and necessarily in order to perform the duties of an assignment. The benefits of claiming business expenses are that income tax is not applied to the amount claimed as a proportion of your income. Please note: money spent for the expense is not physically reimbursed; it is only the taxable element that can be off-set against salary. How do expenses work? An example: If you earn 1, gross (before tax and NI are applied) and submit of expenses you would only be liable for tax on of that gross amount not the full 1, You have to pay tax on at least up to National Minimum Wage based on the hours that you are working. This means that we may not be able to offset all the expenses you have submitted in one pay period. In these cases you will not lose the full benefit of what you have claimed as the remaining balance will sit on our system until you earn enough money to cover the deduction. RACS Group Helpline... If you require any further information regarding Expenses Claim Procedure after reading this guide, please contact a member of the RACS Group team on or info@racsgroup.com.

2 Travel to and from assignments (temporary Work Place) In reference to the HMRC booklet on employee travel: using your own vehicle to travel between your home and client Site (temporary work place) allows you to claim mileage allowance in accordance with the HMRC Approved Mileage Rates. This can apply to bicycles and motorcycles as well as a car or van. The current HMRC rates for mileage are as follows: Mode of travel First 10,000 Miles within the tax year Over 10,000 Miles within the tax year Cars and Vans 45p per mile 25p per mile Motorbikes and Scooters 24p per mile 24p per mile Bicycles 20p per mile 20p per mile Other typical expenses that can be claimed are car parking costs, tolls and congestion charges but only if proven to be included as part of your genuine business travel. Make sure to retain a VAT receipt, otherwise the claim can t be verified. Additionally, public transport costs to and from your temporary workplace can be claimed. For proof, make sure to keep your receipt or keep all of your tickets if a receipt is unavailable. Car hire can also be claimed, providing proof is given that it is for business use. Receipts are required for the claims to be accepted.

3 Meals You may claim for any meals (normally lunch) whilst working. However, it must be proved that these claims were incurred during working hours at your temporary workplace and they must be supported with receipts unless covered under our dispensation. It is a good idea to keep evidence of all meals even if you do not submit receipts to us. HMRC guidelines state eligibility times for meals are Breakfast prior to 6:00am (including travel time) and Evening Meal - after 8:00pm (including travel time). Non-receipted - you may claim up to a certain level for lunch every day - provided you have incurred the cost in the first place. For larger lunch claims, please remember to submit receipts. These should be of a reasonable value and in line with your business activities. 5 for breakfast (before 6:00am - including travel) 5 for lunch (one meal - after 5 hours at work) 10 for two meals (after 10 hours at work) 15 for dinner (after 8:00pm - including travel) No receipts are required by us to claim these expenses but you must be able to account for the cost incurred if investigated by HMRC. Breakfast rate - The rate may be paid where an employee leaves home earlier than usual and before 6.00 am and incurs a cost on breakfast taken away from his home after the qualifying journey has started. If an employee usually leaves before 6.00am the breakfast rate does not apply. Late evening meal rate - The rate may be paid where the employee has to work later than usual, finishes work after 8.00pm having worked his normal day and has to buy a meal before the qualifying journey ends which he would usually have at home. The breakfast and late evening meal rates are for use in exceptional circumstances only and are not intended for employees with regular early or late work patterns (see examples at HMRC BMSR - EIM05232). One meal (5 hour) rate - The rate may be paid where the employee has been undertaking qualifying travel for a period of at least 5 hours and has incurred the cost of a meal. Two meal (10 hour) rates - The rate may be paid where the employee has been undertaking qualifying travel for a period of at least 10 hours and has incurred the cost of a meal or meals. Benchmark scale rate payments must be limited to three meal rates on one day or 24 hour period. A meal is defined as a combination of food and drink and would take a normal dictionary meaning. Where employees are required to start early or finish late on a regular basis, the over 5 hour and 10 hour rate, whichever is applicable, can be paid provided that all the other qualifying rules are satisfied.

4 Secondary accommodation If you are staying away from home on business then your accommodation and evening meal can be claimed. You can claim up to 25 a day for meals when away for longer than 12 hours, but only if the cost of meals is not included in the cost of the hotel bill. Receipts must be provided when claiming. Costs incurred by staying away from home in Hotels and B&B s can be claimed if it is more convenient to be closer to a temporary work place than it is to travel there and back again each day i.e. large amounts of travelling time. Receipts must be provided at the time of the claim and be for the specified period and can only cover your own costs, not costs incurred by anyone else sharing the accommodation with you. In some circumstances you may be able to claim for the cost of rented accommodation and related utility costs. However, you must also be able to show that you maintained and continued to pay for another residence elsewhere in the U.K. If not, then none of the expenses can be claimed. The first time this expense is claimed it must be backed up by a rental agreement. For example: if you are renting a second property so you are closer to work because travelling there and back again each day would be too time consuming, but a hotel would cost far too much as you are there for a few months, you can claim the rental costs as an expense. If you are renting out your main home, whilst on site, the rented property is not a secondary cost and therefore cannot be claimed as an expense. You can also claim utility bills for the rented property. The council tax bill for example is classed as a secondary expense because you would have to pay this on both properties. Your electricity/gas/water bills would only be classed as a secondary cost if your family retains your main home whilst you are staying in the rented property. Subtotal VAT Total If you are staying in rented accommodation, you cannot claim meal costs. It is HMRC s belief that you can shop, prepare and cook your meals as though you were at home - these therefore are not additional costs and can t be claimed. You can claim small amounts for staying with Family and Friends instead of paying out for full hotel bills, although you would need to provide receipts for this to prove you have spent out the money. If you do find this is an easier option please be aware that if HMRC investigate your claims your friends and family may be liable to pay tax on the contributions you have given.

5 Use of Home as office Provided you utilise your house for some element of home working, you will be eligible for up to 4.00 per week as an allowance for Home as office. Receipts are not required here. Specialist Clothing If you purchase any work uniform or protective clothing then that can also be claimed on your expenses. Receipts and explanation as to why the clothing is required is needed in order to it be reimbursed. Equipment & Stationery Any equipment that is wholly and specifically used for work can be claimed. This could be stationery or postage costs for any work related letters. Professional books that are needed can also be claimed but only if they are relevant to the job role you are currently employed to do. Receipts are required which are highlighted and totalled if necessary. Telephones You can also claim back any business calls made from your mobile or home. To do this, you will need to submit an itemised bill with the relevant calls highlighted and totalled. Without an itemised bill, you cannot claim these calls as expenses. HMRC also does not recognise Pay-as-you-go mobile phone charges and mobile Top-ups aren t accepted. You can also claim any internet charges that occur whilst working. Again, an itemised bill is required. But, you cannot claim the cost of line/internet rental. Eye tests If you are required to use a computer as part of your everyday working activities you are eligible to claim for your eye tests. However, unless proof can be provided that any glasses needed are direct results of working in front of a computer in your current role you cannot claim for them as well. Professional Subscriptions and Affiliations You can claim for professional subscriptions, courses and affiliations. To do this, you will need to submit a standard VAT invoice and proof of payment. If you are unsure about the types of professional items that can be reclaimed, please do not hesitate to ask. The courses and subscriptions need to be relevant to the job you are currently contracted to do.

6 Foreign Expenses People living outside of the UK but working within the UK can claim the cost of travel between UK and home. You can also claim the cost of your accommodation and travel whilst in the UK. However, certain criteria needs to be met which include being a non-uk domicile and retaining a residence in the home country. To be eligible to claim expenses as a non-uk national you must have secured your position through your agency before you leave your home country and meet one of the following criteria; 1) You were not/have not been a resident in the UK for 2 tax years prior to your arrival. The UK tax year falls 6th April to 5th April in the following year. or 2) You have not been in the UK at all for any reason for the 2 years prior to your date of arrival. If you meet the requirements stated above and can prove it, you will be eligible to claim for travel expenses back home for up to 5 years after you have arrived in the UK. You will also be able to treat your accommodation and subsistence expenses as tax deductible for a maximum period of up to 2 years from the date of your arrival. You are able to claim for the cost of meals incurred during your normal working day and evening meals that are brought out e.g.takeaway, restaurants etc though only for yourself, not if you have included the cost of someone else s meal. Shopping bills and packed lunches are not claimable. Going Home for a Visit The full cost of journeys from the country where you usually live to the place where you are working and back again are fully tax deductible and there is no limit on the amount of journeys you can claim for. Receipts must be provided at the time of claim for it to be allowed, if you do not have the receipt the actual ticket will be accepted as long it has the price clearly stated on it. Family members Coming to Visit If your work keeps you in the UK for more than 3 months, the costs incurred by your husband/wife and/or children coming to visit you can be claimed as an expense against your tax. Please be aware that HMRC will only permit 2 such claims in each tax year for your family and receipts or travel tickets must be supplied at the time of the claim clearly stating the price. Accommodation and Utility Expenses The costs of Hotels, B&B s (Bed and Breakfast) and rent can be claimed as an expense. Hotel and B&B costs must have supporting receipts that cover the period being claimed at the time of the claim. If claiming rent you will need to provide a rental agreement in support of this claim for your records. We will not need receipts each time this is claimed unless the date on the rental agreement has expired. If you come to the UK with your family and incur additional costs to accommodate them it will only be the costs that apply to housing you that will be allowable. The utility bills incurred on your rented accommodation can be classed as tax deductible these include council tax, gas and electric only. PLEASE BE AWARE THAT THE ABOVE MENTIONED CLAIMS CAN ONLY BE ACCEPTED IF YOU QUALIFY THE INITIAL STIPULATIONS SET OUT AT THE BEGINNING OF THE FOREIGN EXPENSES SECTION OF THIS GUIDE!

7 Frequently asked questions Why has my claim for petrol been denied? Petrol is covered in the price calculated by HMRC for mileage as are all running costs of your car (road tax, insurance and any repairs) and therefore cannot be claimed separately. Why do I have to submit a form every week? Can I not just fill in one and it gets used every week? The reason you are asked to fill in a separate form each week is due to the fact we would not know at the time of processing the claim if you had worked more or less in a particular week than usual. There may also be additional things you would be eligible for and want to claim for in any given week. There are also times when you may be ill and not make it to work for a day or two if you over claimed you would be liable to pay back the excess tax relief. If I have forgotten to submit a claim for a previous week have I lost the benefit of those Expenses? No. You are able to back date expense claims providing you were being paid through RACS for the period you want to claim for and have continuing payments through us. The only time you would not be able to back date a claim is if it falls in a previous tax year. When do I get paid my expenses? Typically you will get paid your expenses whenever your are regularly paid (weekly, fortnightly or monthly etc...). Please remember that all claims submitted MUST BE supported by an Expense claim Form (every time) and receipts where possible. Some expenses may not be paid to you, if your earnings level fall near to or below National Minimum Wage or where proof has not been seen by us.

8 Claims information How to make a Claim Enclosed is a blank combined Expenses Claim Form and Mileage Log Sheet. When completing the Expense Claim Form, please attach original receipts for each entry in order for your claim to be accepted. Claims should be sent in every week but if there are a limited number of claims then monthly submission is acceptable. Note: When making a return journey, your residential address is usually the start and finish of your journey. Mileage Log Sheet & Expenses Claim Form Additional Expense Claim Forms can now be downloaded from our website Remember to transfer the total mileage claimed to the Expense Claim Form in the space provided and using the table enclosed, fill in the relevant mileage rate. Use the form to determine allowable expenses. Each entry must be accompanied by a valid receipt or covered by our dispensation. If you are claiming business miles, please ensure you have completed the log and that it is accompanied by a number of VAT petrol receipts relating to business travel. Only use the form for business mileage. Complete all relevant sections, remembering to sign and date the form. Send copies of all receipts if not covered under our dispensation! - ALWAYS KEEP receipts - HMRC may require these! * WE WILL SPOT CHECK RANDOM CLAIMS MADE * If You Don t Have Receipts Your claim for that particular item will not be allowed. If we did allow it through and you were investigated by HMRC you could be in a serious amount of trouble. You would be liable to pay back the underpaid tax, receive a fine of a similar value and interest for the time you have had the additional benefit for. Please bear in mind HMRC can investigate up to 6 years after the claim has been made. Registering Your Expenses Claim Ensure that the form is signed dated and sent to us by no later than 9am on Tuesday Morning to; ONLINE: log on to and complete the Online Claim Form BY POST: FREEPOST, RECRUITMENT & CONTRACTOR SERVICES Scan and attach all forms and send to expenses@racsgroup.com If you have any questions about claiming an allowable expense or cannot obtain additional forms then contact us on: RACS Group Helpline... If you require any further information regarding Expenses Claim Procedure after reading this guide, please contact a member of the RACS Group team on or info@racsgroup.com. COLL ECPG V