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30 March 2021

This is a comprehensive guide to what can be claimed as a legitimate business expense when working through SmartWork. The following expenses policy follows guidelines set out by Her Majesty’s Revenue and Customs (HMRC) and is fully compliant with current legislation.

The fundamental rule for claiming a business expense is that the expense is actually incurred by you ‘wholly, exclusively and necessarily’ in the performance of your duties of employment.


As of 6th April 2016, umbrella employees cannot offset their full range of expenses if they are deemed to be under supervision, direction or control (SDC). If there is genuinely no SDC, you will be able to claim back to expenses at the end of the financial year.

If you are working via an umbrella company such as SmartWork, you are provided with a questionnaire to assess your (SDC) status before you start your assignment. The purpose if it is to determine whether your travel expenses will have tax relief applied to them or not.

For the purposes of the agency legislation, HMRC considers supervision, direction and control are best defined as follows:

Supervision (S) is someone overseeing a person doing work, to ensure that the person is doing the work they are required to do, and it is being done correctly to the required standard. Supervision can also involve helping the person where appropriate to develop their skills and knowledge.

Direction (D) is someone making a person do his/her work in a certain way by providing them with instructions, guidance or advice as to how the work must be done. Someone providing direction will often coordinate how the work is done, as it is being undertaken.

Control (C) is someone dictating what work a person does and how they go about doing that work. It also includes someone having the power to move the person from one job to another.

How we can help

SmartWork will provide assistance at the end of the tax year to claim the tax relief due on expenses you would have previously claimed on a monthly or weekly basis. Mileage can be offset on a weekly or monthly basis where there is no SDC or where a worker is travelling from site to site.

Expenses can be submitted by visiting our SmartPortal where we track and log your submissions to assist you with the claim at the end of the financial year.


Where there is no SDC, mileage can be offset on a weekly or monthly basis on an ongoing basis as it is not subject to the salary sacrifice rules. The only exclusion is for site based worker who will be able to claim the mileage travelling from site to site only. For more information on this, please speak to one of our Business Managers.


Public Transport

If travelling by public transport to and from your role, you can claim these at the end of the financial year. This includes:

  • trains/tube
  • taxis
  • buses


You can claim subsistence purchased during your working day based on the following guidelines:

It is vital that you are honest about the monetary value of your subsistence claims and the amounts given are accurate. Only pre-packaged food purchased on a working day (after the qualifying journey has commenced) is claimable.

You are unable to claim subsistence for days not worked or subsistence purchased in volume for a period of time, food must be purchased on the day it is being claimed for.

Travel Insurance

When undertaking work abroad, it is important that you maintain the correct level of insurance cover, which will protect you during your working role. Once obtained, this is a valid business expense providing supporting receipts are kept.

Our Business Managers can help if you would like further details of compliant travel insurance providers accepted by SmartWork.

Rented Accommodation

If you rent a property during and only for any assignment, as it is more cost-effective than a hotel, you can claim the associated costs relating to:

  • Rent
  • Council tax
  • Utility bills (gas / electricity)

To claim for the rental costs of temporary accommodation, we recommend that you keep a copy of your full rental agreement which must contain the following documentation:

  • Start date and expiry date
  • Full address
  • Contact details of Landlord/Supplier
  • Full name and signature of Landlord/Supplier

If the rental costs are being distributed between several people, or you have other names on your rental agreement, you are only able to claim for the costs you personally incur and not the full amount. If you are claiming rent as a tax-reducing expense, you are unable to claim for any other accommodation expenses, unless it is in direct relation to your working role.


You are able to claim up to £100 in Greater London and £85 elsewhere when staying in a hotel or bed and breakfast. A copy of the receipt should be kept for your records (ideally a VAT receipt).

Overnight Allowance

You can claim Personal incidental expenses for overnight stays (receipts are not required) away from your usual place of residence for work purposes:

  • £5 overnight expense when in the UK per night
  • £10 overnight expense when staying outside the UK per night


Eye Test and Glasses

The full cost of an eye test can be claimed (no more than 1 test per annum). If you are required to wear glasses in the performance of your duties, you can claim up to £100 towards the cost of one pair (per annum). If you are required to wear glasses for a percentage of your duties, you can claim up to £50 towards a pair of glasses or contact lenses.

Professional Subscriptions

Annual subscriptions paid to certain approved professional bodies are allowable; however, we must receive details. For a full list of HMRC’s approved subscription, please visit www.hmrc.gov.uk/list3/index.htm

Training and Tuition

Before commencing any training or tuition, please contact your Business Manager to confirm if it will be an allowable expense. While on the training course you can claim associated cost such as overnight stay, travel and subsistence.

Protective Clothing, Tools and Specialist Equipment

The cost to provide tools, protective clothing or specialist equipment essential for your business duties can be claimed as a business expense. Daily work attire and office clothing will not be considered allowable.

Office Stationery

The cost of stationery or postage incurred is allowable where they were purchased in order to conduct company (providing they were not supplied by the end client). Again we recommend you keep the receipts for your records to support the claim.

Business Entertainment

In exceptional circumstance, you can claim business entertainment expenses. Please contact your Business Manager for further guidance.


Those deemed not to be working under SDC will be assisted with claiming expenses at the end of the tax year via the completion of a P87 form or if the expenses exceed £2,500, reclaiming the tax relief via a Self-Assessment tax return.

It is important that you submit expenses on a regular basis via the SmartPortal as this ensures that you receive the maximum tax relief available to you.

It is key that you keep a record of all of your receipts to support your claim.

All receipts must have the following details clearly legible:

  • Date of purchase
  • Amount of purchase
  • Company name
  • VAT number if applicable
  • Description of goods/service provided

If the above items are not found on the receipt, please document the details. Receipts should be retained for a period of six years, copies of the receipt can be submitted via the SmartPortal.


If you expect your contract to exceed 24 months, or if your contract does exceed 24 months you must cease claiming your travel expenses to and from your temporary workplace.

The 24-month rule applies to subsistence as it does with mileage if you know you will be working at the same workplace for more than two years.


We have a downloadable pdf version of this guide on the website here if you wish to keep a copy.


If you have any questions, please feel free to contact us via any of the following methods:

Freephone: 0800 434 6446

Tel: 0117 311 9800

enquiries@smartwork.com – For more service information

invoicing@smartwork.com – To submit timesheets/expenses

contracts@smartwork.com – To submit contracts, schedules, and other legal documentation

holidays@smartwork.com – To make a holiday request

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