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How to Claim Expenses as a Supply Teacher

| January 26, 2011 | 6 Comments

This article explores how umbrella companies promote the claiming of expenses—such as travel—for supply teachers. It will cover the basics of why umbrella companies say supply teachers can claim expenses and how you are to do it. The second part of the article discusses the debate going on about whether or not it is legal for teachers to claim these types of expenses. If you are new to all of this, you may also want to read RMTA’s post on “What is an Umbrella Company?”

Note: Rate My Teaching Agency is not a financial expert so please use this post as a basic introduction and seek specific details from your agency, umbrella company, or an accountant.

Part 1
Umbrella companies claim that supply teachers are able to offset the cost of travel to/from school and other such work-related expenses. Let’s start here and find out why they say this.

Why can supply teachers claim expenses?
In the eye of the umbrella company, supply teachers are considered contractors who hire out their work to different clients. Yes, they do work through agencies but not really for them. In fact, most supply teachers sign a contact with an umbrella company and become their employee, who is then hired out as a contractor to different schools. Additionally, it is argued that the supply teacher’s primary place of work is their home. Being a contractor and working from home means that you are able to claim work-related expenses. Whether or not these definitions are correct is what is being debated. That will be discussed more later in the article. For now, let’s assume this is the case and look at expenses through the eyes of an umbrella company.

What does it mean to “claim” an expense?
A very vital question that is often overlooked. If you don’t really care what claiming an expense means, just know that it will save you money and skip to the next section.

When a contractor (remember, as a supply teacher, you are like a contractor) “claims” an expense, they are saying to the government, “This item that I am buying is necessary for me to carry out my job. Therefore, you must give me a discount on it.” In return, the government says, “Ok, we will offset those costs by reducing the amount of tax you pay on your income.” Now that you have a basic understanding of what it means to claim an expense, let’s find out which expenses are able to be claimed.

What expenses can supply teachers claim?
Like any contractor, supply teachers can claim work-related expenses. So, what is considered work-related? In general, the following expenses can be claimed:

Travel:
If you take public transit, you are able to claim the cost of your travels to and from each school. This includes money you put on your Oyster card, spend on buses, rail, or taxis. Additionally, if you drive your own car to school, you can claim a cost per mile traveled—your umbrella company can tell you what this average cost is. You can even claim your parking expenses. Remember to keep your receipts—especially at those pesky Oyster machines that do not automatically give one to you. Travel expenses are one of the most lucrative, but are also the most contested on their legality to be claimed by supply teachers.

Work-related Materials:
This category is somewhat of a “catch-all.” Depending on the umbrella company you work through, they may break this category down into separate sub-categories. For the purpose of this article, lets look at them as a whole. Here, you can claim any stationary (paper, binders, pens, ink, staples, etc), books, training courses, subscriptions, photocopying, postage, or other goods that you require in order to carry out your job. Again, remember your receipts!

You can claim any work-related expense

Relocation:
If you are an overseas teacher coming to the UK to teach, you can claim relocation expenses. The main expenses here include your flight and accommodation. Not only can you claim the money spent on hostels/hotels when you first arrive, you can also claim your rent once you have found a place to live. Generally, you only need to submit a rental agreement stating your monthly rental amount (templates can be found online) along with a printed bank statement each month showing the actual payment. Speak to your umbrella company for more details.

Subsistence:
As a hard-working supply teacher you may be out the door early in the morning and home late at night. If this is the case for you, you can claim the money spent on breakfast, lunch, and possibly dinner. The umbrella companies have a set amount that you can claim for each meal, meaning you do not have to submit your receipts for each purchase. Do not be fooled though, this does not mean you can claim expenses you did not actually purchase—if you were ever audited, you would have to show your receipts. Ask your umbrella company for more details on this expense.

How can I claim expenses?
Although each umbrella company has you submit expenses differently, the steps are generally the same for each and are as follows:

  • You purchase work-related items and keep the receipts
  • At the end of each week you print out the umbrella company’s expense form (usually found on their website)
  • Add up all your expenses and start filling in the expense form
  • Attach all your original receipts to the form, stick it in an envelope and mail it to the umbrella company.
  • The umbrella company subtracts your expenses from your income and then calculates your payable taxes and NI (resulting in lower amounts than if you had no expenses)

Part 2
Now that you are eager to start claiming your expenses, it is important to look at the legality of it all. On one side, the umbrella companies say that they operate in full compliance with Her Majesty’s Revenue and Customs office and their policies. Policy says that contractors are able to claim expenses similar to the above.

However, where the issue gets complicated is over the definition of a contractor—do supply teachers fit into this category? Those who think so point to the fact that hundreds of umbrella companies are still operating under this notion without interference from the government. Thos who think not point to the legal case of Warner v Prior (SpC353), which found that a supply teacher’s primary place of work is “school” and, therefore, they cannot claim travel expenses as travel is part of their regular commuting.

There is obviously some confusion over the matter, which will hopefully be cleared up in the near future. Claiming expenses is possible through umbrella companies and can put a little extra money in your pocket each week. Many supply teachers are doing it and some agencies automatically sign their teachers up with an umbrella company. However, if the government ever were to crack down on this practice, it could be individual teachers that suffer. There is no clear answer as to what a supply teacher should do. However, if you want to take the safe and secure route, you cannot go wrong by requesting to be paid directly by your agency through PAYE and not claim expenses. You will lose the little extra at the end of the week, but could save a potential headache in the future.

What’s next?
For a good discussion on this topic, head over to the TES forums which have many threads focused on this issue. You can also contact your agency or umbrella company for more information (remember to take bias into account). You can also leave a comment below with any questions, feedback, or recommendations you may have.

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Comments (6)

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  1. Mike says:

    Interesting. On the issue of supply teachers and self employment, I sought advice from HMRC on this issue and explained clearly what I would be doing and it was confirmed to me I can go self employed. All self employed persons are under some direction based on what the client wants of you in the first place.

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  2. anonymous says:

    I never fill in the boxes at the bottom of the claim form for Key Portfolio but on reading the small print I see you have to opt out of claiming which I have started to do. I fill in a tax form every year where I claim my mileage etc so don’t want to claim twice.

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  3. las says:

    This really confused me when I started working for an agency. Before this job, I was self employed, and used to doing my accounts and working out expenses myself, so when it was suggested that I should join this umbrella company and pay them for the privilege of claiming my expenses, I didn’t see why I couldn’t just do it myself in a similar way to before. I’m keeping track of my mileages simply as a matter of course, but still don’t understand whether I will be able to do anything with them when we reach the end of the tax year.

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  4. Admin says:

    AS,

    Thank you for your input. Your comments have lead to an overhaul of the post and a change in its direction—showing supply teachers how umbrella companies allow you to claim expenses while also discussing whether or not this is a legal practice.

    The answer to this question is unclear, with some arguing that supply teachers can claim expenses and some saying they cannot. From our research, it appears that there are laws governing this issue but they do not have a clear practice. In addition, the fact that so many umbrella companies are continuing to allow this without question seems to signify that even the government is unsure of how to enforce the policy. The laws surrounding the IR35 are expected to be amended by the LibDems in the near future, so perhaps things will become more clear in the future.

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  5. AS says:

    I found this info on the inland revenue website
    Would I have been an employee of my client?
    The IR35 rules only apply if you would have been an employee of your client, had it not been for the existence of your Personal Service Company or partnership.

    If you can answer ‘yes’ to most of the following questions, you would probably have been an employee of your client for the contract in question and therefore within the new rules.

    •Do you work set hours, or a given number of hours a week or a month?
    •Do you have to do the work yourself rather than hire someone else to do the work for you?
    •Can someone tell you at any time what to do, when to work or how to do the work?
    •Are you paid by the hour, week or month?
    •Can you get overtime pay?
    •Do you work at the premises of the person you work for, or at a place or places he or she decides?
    •Do you generally work for one client at a time, rather than having a number of contracts?

    So I reckon most of these apply so the definition is that you are employed, not self employed for this purpose
    see http://www.hmrc.gov.uk/leaflets/guide_limitcomp.htm#2 for more details

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  6. AS says:

    The english government do NOT see supply teachers as self employed. IR35 (inland revenue) regulations state that a self employed person must not be under the direction and control of any other person. The education act puts the head teacher of the school firmly in control, and directing the school. This definition is incorrect. I would take independant financial advice on this. You could end up paying back all the unpaid tax.

    It is ok to claim for professional expenses such as GTC registration. please be careful.

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