I’m UK based and looking at taking a 6 month contract assignment based in Paris, France. I am considering doing this through either my own Ltd Company (as sole director/employee) or through a UK umbrella company. I wanted to know if I could pay myself a Per Diem rather than produce receipts for subsistence expenses.
I spoke to one umbrella company based in Switzerland who said that Per Diems were taxable like salary, but this didn’t sound right to me, so I have been reading the HMRC website with regards to Scale Rate Expenses Payments at the following link:
Employment income: scale rate expenses payments: accommodation and subsistence payments to employees travelling outside the UK
This site states that:
“HMRC therefore agreed in January 2008 that employers may use benchmark rates published on the HMRC website when paying accommodation and subsistence expenses to employees whose duties require them to travel abroad, without the need for the employees to produce expenses receipts.”
and also:
“Accommodation and subsistence payments at or below the published rates will not be liable for Income Tax or National Insurance contributions (NICs) for employees who travel abroad, and employers need not include them on forms P11D.”
I have looked at the 2013 subsistence rates for Paris (there is a link to the document on the page). It states the 24 hour rate is “116 EUR + room rate”. The room rate is shown as 198.5 EUR.
Does this mean that if I work a five day week, spending four nights in Paris per week and spending the rest of the time at home in the UK, I can claim a rather generous 4 x (116 + 198.5) = 1258 EUR per week as subsistence expenses, while not needing to produce any receipts, and not being liable for any tax or NICs on this?
If possible, can this be done through both personal Ltd companies and through umbrella companies? If possible with the latter, can anyone recommend an umbrella company that can offer such an employment vehicle?
I spoke to one umbrella company based in Switzerland who said that Per Diems were taxable like salary, but this didn’t sound right to me, so I have been reading the HMRC website with regards to Scale Rate Expenses Payments at the following link:
Employment income: scale rate expenses payments: accommodation and subsistence payments to employees travelling outside the UK
This site states that:
“HMRC therefore agreed in January 2008 that employers may use benchmark rates published on the HMRC website when paying accommodation and subsistence expenses to employees whose duties require them to travel abroad, without the need for the employees to produce expenses receipts.”
and also:
“Accommodation and subsistence payments at or below the published rates will not be liable for Income Tax or National Insurance contributions (NICs) for employees who travel abroad, and employers need not include them on forms P11D.”
I have looked at the 2013 subsistence rates for Paris (there is a link to the document on the page). It states the 24 hour rate is “116 EUR + room rate”. The room rate is shown as 198.5 EUR.
Does this mean that if I work a five day week, spending four nights in Paris per week and spending the rest of the time at home in the UK, I can claim a rather generous 4 x (116 + 198.5) = 1258 EUR per week as subsistence expenses, while not needing to produce any receipts, and not being liable for any tax or NICs on this?
If possible, can this be done through both personal Ltd companies and through umbrella companies? If possible with the latter, can anyone recommend an umbrella company that can offer such an employment vehicle?
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