Claiming expenses incurred abroad finding client

[northernladuk]

OK I will be employing an accountant but I wanted to get an idea beforehand. It sounds like there is a chance it could be allowed.I will follow the accountant's advice. Out of interest what is the "risk" here. I am assuming it is not simply having the expenses disallowed and having to pay the tax+interest? Is there a risk of being prosecuted for fraud on something like this(to be clear I have not lied about anything in this thread). If I am confident I can prove this trip is what I claim, then is the worst case scenario is they deny the expenses and I have to repay them with interest?

To answer the visa question, I was in the US under the Visa Waiver Program which allows visa free access for 90 days for both business and/or tourism. I did not break any US laws interviewing for jobs.

Ahhh. All becomes clear. One of those selective readers that is only actually here looking for one answer.

[northernladuk]

Risk is tax + interest + 100% penalty of the tax. If you proffer a false document then you're into the areas of fraud.

Sounds to me that to have any hope of claiming this, some falsification is going to be required. E.g. you didn't set up your company and then go in an entrepreneurial sales trip for contracts. You went over for some permie interviews and are now trying to rewrite history. Good luck with that.

Plus a fairly good likelihood of coming under fairly intense scrutiny again at some point in the future.

[buddy99]

Sounds to me that to have any hope of claiming this, some falsification is going to be required. E.g. you didn't set up your company and then go in an entrepreneurial sales trip for contracts. You went over for some permie interviews and are now trying to rewrite history. Good luck with that.

Well I am not willing to re-write history or lie. You are allowed to claim for expenses incurred prior to setting up a company. That said I did go to the US with the aim of finding either a permanent or contractor job and I got a contractor job and set up a company. It sounds like, as my intent was not to find work solely for my (as yet) unformed company, that I would be disallowed on these grounds? i.e. I was also open to non contractor roles

Anyway, this seems to be a somewhat complicated case. Sounds like it is worth at least raising with accountant even if he shuts it down straight away.

[TheCoconutDog]

Claiming expenses incurred abroad finding client

Read notice 490 carefully (and maybe 480 too). Carefully put together your case. Talk to an accountant - or better still a specialist tax advisor. IME accountants are good at telling you how much tax you owe, but some are not that hot at correctly determining whether you owe it at all according to the letter of the tax law.

[buddy99]

Read notice 490 carefully (and maybe 480 too). Carefully put together your case. Talk to an accountant - or better still a specialist tax advisor. IME accountants are good at telling you how much tax you owe, but some are not that hot at correctly determining whether you owe it at all according to the letter of the tax law.

Thanks, in the end it sounds like it might be more hassle than it is worth.

Since people keep raising the length of time I was over there, I should clarify that the interviews were both pre-planned and pretty spread out. Because of company availability, they were more or less spread evenly throughout the first 3-4 weeks. Its not like I had 4 interviews in a one week period and I decided to go for 6 weeks anyway. It would have been financially and logistically impractical/impossible to fly back and forth. I appreciate though the point that it does not look ideal. I did not go to "stake the area out". I have been to the area numerous times. I went simply to interview for jobs.

In terms of my expenses, I actually spent most of the time in a very boring hotel in a very boring suburb using hotel points to pay for my stay. I only had 7 nights in hotels where I paid using money, and they only add up to about £350 in total. My flights were £350 and my car hire was £400 for the 4 weeks(we hired a different car after I stopped looking for work). I was very limited on funds and had to keep my expenses low. I do not have petrol or food receipts, only credit card statements(I probably couldn't claim for food anyway). Therefore, the best I could save is 20% of £1100, which is £220. Hardly seems worth the hassle this seems to be. If it was an open and shut case of "yes you can claim these no problem, they won't bat an eye", then I would... but it sounds like a lot of pain for little gain.

[northernladuk]

Thanks, in the end it sounds like it might be more hassle than it is worth.

Since people keep raising the length of time I was over there, I should clarify that the interviews were both pre-planned and pretty spread out. Because of company availability, they were more or less spread evenly throughout the first 3-4 weeks. Its not like I had 4 interviews in a one week period and I decided to go for 6 weeks anyway. It would have been financially and logistically impractical/impossible to fly back and forth. I appreciate though the point that it does not look ideal. I did not go to "stake the area out". I have been to the area numerous times. I went simply to interview for jobs.

In terms of my expenses, I actually spent most of the time in a very boring hotel in a very boring suburb using hotel points to pay for my stay. I only had 7 nights in hotels where I paid using money, and they only add up to about £350 in total. My flights were £350 and my car hire was £400 for the 4 weeks(we hired a different car after I stopped looking for work). I was very limited on funds and had to keep my expenses low. I do not have petrol or food receipts, only credit card statements(I probably couldn't claim for food anyway). Therefore, the best I could save is 20% of £1100, which is £220. Hardly seems worth the hassle this seems to be. If it was an open and shut case of "yes you can claim these no problem, they won't bat an eye", then I would... but it sounds like a lot of pain for little gain.

Hallelujah! At last it's dawning on him. You are also selectively ignoring the wholly and exclusively for the purpose of business bit and the holiday and so on and so on.

[TheCoconutDog]

Claiming expenses incurred abroad finding client

Hallelujah! At last it's dawning on him. You are also selectively ignoring the wholly and exclusively for the purpose of business bit and the holiday and so on and so on.

Mmmm. I'm not so sure that the wholly, exclusively and necessarily test is shot down here. It's maybe worth the punt. As always with HMRC, it's never black and white (much as though they'd like it to be.).

The bit I think is most dubious is that the expenditure pre-dates the company formation. This may or may not be material. I have no idea of the answer.

[TheFaQQer]

Plus a fairly good likelihood of coming under fairly intense scrutiny again at some point in the future.

It opens the door to someone asking "if they claim this, what is there in the accounts that's dodgy?". If the OP is claiming that this job (and I choose that word deliberately) is outside IR35, I wouldn't want anything else that might be suspicious raising any flags.

[buddy99]

Mmmm. I'm not so sure that the wholly, exclusively and necessarily test is shot down here. It's maybe worth the punt. As always with HMRC, it's never black and white (much as though they'd like it to be.).

The bit I think is most dubious is that the expenditure pre-dates the company formation. This may or may not be material. I have no idea of the answer.

Thanks Coconut. I'll check with accountant anyway, see what he says.

Out of interest, assuming I am under IR35, which I almost certainly am, and will be subject to the higher 40% tax bracket on my income, then I would effectively be saving 40% on this amount if it was allowed, is that correct? I apologise for being very naive about all this..

Also again out of interest, my company was formed this April, which means I would not need to put these expenses through until next year? If I am permanently living in the US at that stage, as I hope to be, and the company is wrapped up, would that have any effect on how aggressively HMRC challenges my expenses, especially if smallish amounts. I am assuming it makes not the slightest difference....but just wondering.

[buddy99]

Out of interest, assuming I am under IR35, which I almost certainly am

Nevermind, I do not believe I am inside IR35 having researched the subject and re-read my contract.