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Key Portfolio LtdKey House18 Seaward PlaceCenturion Business ParkGlasgowG41 1HH

t 0845 371 0303w mykeypay.com

Expense Guide

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CONTENTS Page

Introduction 2-3

Site-based workers 4-5

Expenses for Non-UK Nationals 6-7 Any worker required to stay awayfrom home on business 8-9

Miscellaneous Expenses that apply to all workers 10-11

Disallowable Expenses 11

Key Questions 12

Copies of our Expense Form are available at: www.mykeypay.com/page/literature

or by calling our Client Care Team on 0845 371 0303

Post Forms with required receipts to Key Portfolio Ltd.Key House 18 Seaward Place Centurion Business Park Glasgow G41 1HH

See inside for details on how to submit non-receipted expenses.

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IntroductionTo get the most out of Key Portfolio it is important that you understand the rules and regulations surrounding your expenses. We have put this Guide together to ensure that you stay compliant with all current government guidelines and to ensure that you are aware of the full range of expenses that may be treated as allowable against tax.

Some of these expenses do not require the submission of supporting receipts. These expenses are referred to as Scale-rate payments and include:

4 Breakfast - when leaving home for work before 7am and purchasing breakfast

4 Lunch - when purchasing food and drink during the day

4 Evening Meal - when your working day including travelling time, exceeds 10 hours and you purchase an evening meal

4 Use of Home as Office - the additional cost of using your home as an office

Please note you must have spent money on these expenses in order to treat the Scale-rate expense as allowable against tax. Although we do not need to see your receipts for these expenses we recommend that you retain them for your own records.

Look out for the 4 in this guide which highlights these Scale-rate payments.

Some recruitment agencies have asked us to make the process as simple as possible for you to submit claims for these Scale-rate payments so we have added them to your Agency Timesheet. There’s more information on this on page 12 of this guide.

REMEMBERExpenses must be incurred, wholly, exclusively and necessarily in the performance of your duties. Expenses are not refunded to you; they are treated as tax and National Insurance free amounts, resulting in an increase in your take-home pay. This is referred to as ‘offsetting’ your expenses.

Expenses that require receipts will be denoted in this Guide with the symbol . If a receipt or ticket is required you will see the symbol R/T and where an itemised bill is required we have used the symbol .

R/TR

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When you joined Key Portfolio you were asked questions to ensure that you qualify as a ‘site-based temporary worker’. If you meet the criteria you are entitled to offset certain expenses against tax whilst working through Key Portfolio. Offsetting means that your expenses, whilst not directly reimbursed, are treated as tax and National Insurance free amounts. They are excluded from your income which is then subject to tax and NI. The expenses are then added to your net salary, which means that deductions are lower, resulting in an increase to your take-home pay.

This Guide details the expenses which are allowable against tax and are therefore not likely to incur any future tax and National Insurance liabilities. These expenses are limited in nature; therefore, in the event that you expect to incur expenditure on any items not included within this Guide which you consider should be tax deductible, you should firstly contact us and discuss your potential claim with our Client Care Team on 0845 371 0303.

HMRC require Key Portfolio to submit form “P11D” at the end of each tax year (5th April) that details all expenses offset during the previous tax year. However, Scale-rate payments do not fall into this category and are not required to be reported on the P11D. The P11D is open to review by HMRC who in some cases may reject expense claims that they do not feel were incurred wholly, exclusively and necessarily in the performance of your duties. If this does occur, you will receive an additional tax bill some time after 5th April.

Whilst the facility to offset certain expenses against tax and National Insurance is a welcome benefit, we advise caution against illegitimate claims. Key Portfolio are extremely experienced in policing expenses and therefore advise you to ensure that any claims you make are reasonable, “bona fide” and adhere to the rules detailed in this Guide.

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The expenses are divided into four categories. You may qualify to submit expenses under one or more of these categories:

1. Site-based workers

2. Expenses for Non-UK Nationals

3. Any worker required to stay away from home on business

4. Miscellaneous expenses that apply to all workers

Site-based workers

To be eligible to offset expenses you MUST meet BOTH of the following criteria:

1. You have not, nor expect to be at the same client site (e.g. school) for more than 24 months. (This includes sites at which you have been previously employed if your temporary assignment is at the same site).

2. You have worked or it is your intention to work at more than one client site (e.g. school) during your contracting career and you are willing to work outside a 10 mile radius of your home.

4 Mileage (no receipt required)

If you use your own vehicle to travel between your home and client site, you are entitled to claim a mileage allowance in accordance with HMRC Approved Mileage Rates. Please see the table below for the rates:

Vehicle First 10,000 Miles Over & Above 10,000 Miles in Tax Year in Tax Year

Cars & Vans 40p per mile 25p per mile

Motorbikes & Scooters 24p per mile 24p per mile

Bicycle 20p per mile 20p per mile

To advise Key Portfolio of the number of miles you are claiming; simply record your vehicle type and total miles on your Expense Form or on your Agency Timesheet where applicable.

However, please be aware that HMRC require you to keep a log of your business journeys. We suggest you record the following information:

l Date of Journey

l Start Location

l End Location

l Total Miles

Key Portfolio does not require sight of these records.

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Fares to Work (receipt or ticket required)You are entitled to claim the cost of public transport to and from your Client site if this is your preferred method of travel.

Parking (receipt or ticket required)If you park in an off-street car park you should submit original receipts with your Expense Form. If you use on-street parking a written record of parking location, date and cost should be submitted where original receipts are not available.

4 Breakfast Scale-rate Payment (no receipt required)You may claim a breakfast allowance of £5.00 for each day that your work requires you to leave home before 7am and buy breakfast on the way to work.

4 Lunch Scale-rate Payment (no receipt required)You may claim a lunch allowance of £7.50 for each day that you are attending your temporary work site and purchase food and drink during the day. You cannot claim a lunch allowance if you only work a half day.

4 Evening Meal Scale-rate Payment (no receipt required)You may claim an evening meal allowance of £15.00 if you are away from home for more than 10 hours (including travel) and you purchase an evening meal.

4 Use of Home as Office (no receipt required)You may claim an allowance of £3.00 per week to contribute to the additional costs associated with having to use your home as an office.

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REMEMBERl The above Scale-rate payments may be included on your Agency Timesheet

l When you become aware that your contract will be your last then no further site-based expenses can be claimed (from the time you become aware)

l If you will be based at only one site throughout your contracting career or expect to remain at a single site for more than 24 months, you may not claim any of the above expenses. However, travel costs whilst away from home on business can be claimed.

R/T

R/T

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Expenses for Non-UK Nationals

Non-UK Nationals coming to the UK to work are allowed to treat a range of expenses as allowable. In order to qualify, the Non-UK National must fulfil either of the two requirements below:

The Non-UK National was not resident in the UK in either of the two tax years preceding the tax year in which the date of arrival falls. The UK tax year spans 6th April to 5th April.ORThe Non-UK National was not in the UK for any reason, at any time in the two years ending on the day immediately preceding the date of arrival.

If the Non-UK National fulfils either of the two requirements above, they may treat the following range of expenses as allowable for a maximum period of five years from the date of their arrival.

A Non-UK National who satisfies the set criteria may treat the following as allowable expenses:

Travel (travel tickets required where receipts not available)Non-UK Nationals are entitled to treat as allowable, the full cost of journeys from the country where they usually live to the place where they are working in the UK and back home after carrying out their duties - there is no limit to the number of journeys to which the employee can get relief.

Travel for family members (travel tickets required where receipts not available)If the Non-UK National’s work in the UK keeps him or her in the UK for 60 days or more - the cost of a spouse and children travelling from their home to visit or accompany the Non-UK National to the place where he or she is working in the UK and their return journey is allowable. However, the Non-UK National can only get relief for up to two return journeys in each tax year for his or her spouse and/or children.

R/T

R/T

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Accommodation (receipts or a rental agreement must be provided with your claim)Accommodation costs incurred by Non-UK Nationals are allowable against tax. If you are claiming rent, your initial accommodation expense claim must be accompanied by your rental agreement. Once Key Portfolio is in receipt of your rental agreement you are not required to provide rental receipts with any further accommodation expenses for that address. However, you must insert the relevant amount on your Expense Form each time you want to offset this expense. If the Non-UK National comes to the UK with a spouse and or children and incurs additional costs to accommodate their family, only the equivalent costs to house themselves can be considered allowable.

For further guidance on this subject please contact our Client Care Team on 0845 371 0303.

4 Overnight Meal Subsistence (no receipt required)You may offset the reasonable costs of all meals whilst working away from home on business. Alternatively, you may offset a Scale-rate payment at the rate of £25.00 per night.

If you claim this Scale-rate payment when staying away from home it replaces the breakfast, lunch and evening meal Scale-rate payments.

If you want to submit expenses for any other amount, these expenses must be supported by receipts and must be reasonable. These costs will include all receipted meals but exclude the purchase of groceries.

R

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Any worker required to stay away from home on business (Non-UK Nationals please refer to Page 6)

Accommodation (original receipt required)The cost of hotels or B&Bs and rented accommodation can be offset provided that you maintain and continue to pay for a main residence elsewhere in the UK.

If you are claiming rent, your initial accommodation expense claim must be accompanied by your rental agreement. Once Key Portfolio is in receipt of your rental agreement you are not required to provide rental receipts with any further accommodation expenses for that address. However, you must insert the relevant amount on your Expense Form each time you want to offset this expense. If you return to your main residence at the weekend, the whole of the rental cost is allowable. Otherwise, you can only claim for days worked.

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4 Overnight Meal Subsistence (no receipt required)You may offset the reasonable costs of all meals whilst working away from home on business. Alternatively, you may offset a Scale-rate payment at the rate of £25.00 per night spent away from home on business.

If you claim this Scale-rate payment when staying away from home overnight, it replaces the breakfast, lunch and evening meal Scale-rate payments.

When staying in a hotel, if your bill includes the cost of an evening meal, please ensure you do not claim the £25.00 per night Scale-rate payment.

If you want to submit expenses for any other amount, these expenses must be supported by receipts and costs must be reasonable.

4 Incidental Overnight Expenses (no receipt required)This is meant to cover incidental expenses incurred while away from home overnight such as laundry, telephone calls, newspapers, etc.

The maximum that can be offset as allowable is £5.00 per night but you need to ensure that you do not claim more than £5.00 accidentally, e.g. if you claim £5.00 and then have a newspaper cost on your hotel bill which takes you over the limit, the whole amount will then become taxable.

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Miscellaneous Expenses that apply to all workers

The expense categories listed below are applicable to all types of temporary worker:

Telephone and Internet (requires itemised bill with relevant calls highlighted)You are entitled to treat the costs of any business calls and internet charges that are incurred wholly, exclusively and necessarily in the performance of your duties as allowable. An itemised bill must be provided to Key Portfolio with the relevant business call charges clearly highlighted. HMRC DO NOT recognise Pay As You Go mobile phones for business use and therefore no claims can be made for Pay As You Go calls.

Car Hire (receipt required)The receipted cost of car hire can be offset provided it is for business use and claims are made for working days only. No mileage allowances can be claimed whilst claiming the cost of a hire car. However, petrol costs for the business use of the hire car may be claimed on production of receipts.

Should a hire car be used for more than 30 days in a tax year, there is a risk that HMRC will treat this as a company car and you will suffer the very onerous benefit-in-kind charge levied on company cars.

Postage, Faxing and Photocopying (receipt required)Only the costs specifically related to your work may be treated as allowable against tax.

Stationery (receipt required)

Only stationery costs specifically related to your work may be treated as allowable against tax.

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Training Courses (receipt required)Training courses are allowable if the course provides an extension of existing knowledge and not a completely new skill. Any expenses connected with attending the training course are also allowable. Please check with us in the first instance as issues such as location may well change the status of the expense.

Books and Journals (receipt required)Books and journals that are wholly, exclusively and necessarily required in the performance of your duties can be treated as allowable.

Subscriptions (receipt required)Subscriptions to organisations are allowable if they satisfy two criteria:The organisation appears on the HMRC list of permitted subscriptions. (Details can be found on the HMRC website at www.hmrc.gov.uk/list3/list3.htm)AND Membership is a requirement of your job.

Disallowable Expenses

The following expenses CANNOT be treated as allowable:

l Computer equipment

l Furniture and fittings

l Clothing (except protective wear and uniforms)

l Any personal or partly personal expenses

l CRB Checks

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Key Questionsl How do I submit expenses?Sending your expenses to us is a straightforward process. By using the Expense Form which is available to download at http://www.mykeypay.com/page/literature/ you can send us a whole range of expense. You can also use the link to access our Expense Form Guide. There’s one exception to this process and that’s where your Agency includes a Key Portfolio Expenses Section on its Timesheet. See below for further details.

To submit expenses that DO NOT require receipts fax the Expense Form to 0845 371 0309. Expense Forms which DO require supporting receipts should be posted to the address on the form with original receipts securely attached.

The deadline for Expense Forms to arrive at Key is Tuesday by 3pm following the period worked to guarantee they are processed with your next pay.

l What do I do if my Agency Timesheet includes some expenses?If your Agency Timesheet includes an expenses section, simply complete this section and ignore Part A of the Expense Form. You must return your Timesheet to your Agency as normal. DO NOT send your Timesheet to Key.

Your Agency will advise Key directly about these expenses. But you still need to use our Expense Form for all additional expenses, not included on your Timesheet.

If your Agency does not include a section for these expenses then you should complete Part A of the Expense Form.

l What should I do if I work through more than one recruitment Agency?Follow the process as outlined above remembering to submit a separate Expense Form for each Agency. This ensures that the expenses are offset against the correct Agency assignment for which they were exclusively incurred.

l What happens if I incur a particular expense that relates to work done through more than one Agency?Using a separate Expense Form for each Agency, you should pro-rate the value of the single expense by the number of days worked through each Agency. Here’s an example:

You work through two agencies and incur travel expenses by purchasing a weekly travel card valued at £15. You work through Agency A for three days of the week and you work through Agency B for two days. Pro-rate the expense as follows:

Weekly Travel Card = £15.00 (divided by 5 days = £3.00 per day)Agency A = £9.00Agency B = £6.00 pPORT08OCT09

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Key Portfolio LtdKey House18 Seaward PlaceCenturion Business ParkGlasgowG41 1HH

t 0845 371 0303w mykeypay.com

Allowable Expenses Guidelines