Umbrella Company Expenses: What You Can Claim
The 2016 rules removed most travel expenses for umbrella workers. Here is what still qualifies — and how to claim it.
Last updated: April 2026
The 2016 Change That Affected Most Umbrella Workers
Before April 2016, umbrella company workers could claim travel and subsistence as employment expenses, reducing their taxable income. This was a meaningful benefit — contractors commuting to client sites could offset a significant portion of travel costs against income tax.
The 2016 Finance Act ended this for most umbrella workers. The legislation introduced the Supervision, Direction and Control (SDC) test: if you are subject to SDC from the engager, your workplace is treated as a permanent workplace for tax purposes. Travel to a permanent workplace is not allowable as an employment expense.
In practice, the vast majority of umbrella workers are subject to some form of SDC from their end client — making travel expenses unavailable.
Warning: Umbrella companies offering travel expenses
If an umbrella company offers to pay you travel and subsistence expenses and claims this is legitimate under current rules, be very cautious. In most cases this is a non-compliant arrangement that HMRC may challenge — leaving you with a back-tax liability.
What You Can and Cannot Claim (2026/27)
| Expense | Allowable? | Notes |
|---|---|---|
| Commuting to client site (regular) | No | Treated as travel to permanent workplace under SDC |
| Travel to temporary/different client sites | Conditional | Only if no SDC at that site — rare in practice |
| Professional subscriptions (e.g., BCS, CIPD) | Yes | Must be relevant to your role and on HMRC's approved list |
| Tools and equipment (not provided by client) | Yes | Must be wholly and exclusively for work use |
| Training and CPD | Conditional | Allowable if directly related to current employment |
| Meals and subsistence (regular workplace) | No | Not allowable — personal expenditure |
| Meals (at temporary workplace, no SDC) | Conditional | Rare — only where SDC test genuinely not met |
| Working from home (flat rate) | Yes | £6/week flat rate if required to work from home |
| Professional indemnity insurance (personal) | Yes | If not covered by umbrella and required for your role |
| Uniform / specialist protective clothing | Yes | Must be required for work and not suitable for everyday wear |
How to Claim Allowable Expenses
For expenses your umbrella company reimburses (e.g., equipment they agree to cover), these come out of your assignment rate pre-tax — reducing your taxable gross.
For expenses you pay personally and claim back from HMRC:
- Under £2,500: Use a P87 form (online via HMRC Personal Tax Account)
- Over £2,500 or self-employed income: Submit a Self Assessment tax return and include employment expenses on the SA102 supplementary pages
Keep receipts for all claimed expenses. HMRC can request evidence up to 6 years after the tax year in question.
HMRC: Tax relief on employee expenses