Overseas Expenses

[pennywisetrading]

Original question:

Hello everyone,

First post

While working abroad, my client has agreed to pay my hotel/accommodation expenses so I add them on my invoice.

I've just read up about HMRC's scale rate expenses for employees working overseas, this includes a "Room rate" allowance too.

If I'm invoicing my client for the hotel costs, can I still claim HMRC's scale rate expenses including the Room rate allowance as expenses from my own Ltd company?

Link to HMRC's Expenses rates for employees travelling outside the UK
https://www.gov.uk/guidance/expenses...outside-the-uk

I've read that whatever my client contributes towards daily costs has no bearing on what we claim from our own Ltd company, is this correct?

Thanks

Hi all,

If working abroad, on a set rate for your end client and paying for accommodation costs yourself - is it okay to claim HMRC's Expenses rates for employees travelling outside the UK?

https://www.gov.uk/guidance/expenses...outside-the-uk

Is this okay to do even if the accommodation cost you pay yourself is slightly less than HMRC's room rate?

Thanks

[malvolio]

We have answered that question ,- several times...

[malvolio]

And the answer was yes, you can, but arguably you will be acting fraudulently by claiming more tax relief that you are entitled to.

But it seems there is no point in telling you things that you don't want to hear.

[eek]

Slightly different question, more straightforward yes/no this time to keep it simple for understanding, also was told to post in Accounting instead so did so

It's not because now you are hiding the fact that in your previous question the end client was paying your travel costs either directly or via expenses.

[NotAllThere]

It's not because now you are hiding the fact that in your previous question the end client was paying your travel costs either directly or via expenses.

Original post added.

[eek]

And let's go to the actual documentation from

https://www.gov.uk/expenses-and-bene...-rate-payments

As long as your employee has actually spent the scale rate payment on business expenses, you will not need to check every single receipt - it’s fine to just check a sample.

So you can't claim for things you haven't spent (that is tax fraud as I've already stated) so if you are collecting receipts you really should get into the habit of collecting all of them - as it's really not difficult nowadays. I used to be able to do it in seconds (use an expenses app, take photo double check the Ai generated description and run a monthly report)

[northernladuk]

Did you ask your accountant as was suggested a number of times? If not why not? This is exactly the type of post I mentioned, where a poster will ignore all the advice except the answer they want to hear. They won't ask their accountant if told to do so, won't read and understand the link but will continue to argue until they get the answer they want.

This this case, as already stated numerous times. We can't give you a yes no answer because we know there is a back story and we would just be aiding in tax fraud if we said yes you can knowing exactly why you are asking.

[northernladuk]

Original post added.

How about either deleting the thread because they've already got one running or locking it because they've had their answer? This is borderline trolling now.

[pennywisetrading]

And the answer was yes, you can, but arguably you will be acting fraudulently by claiming more tax relief that you are entitled to.

But it seems there is no point in telling you things that you don't want to hear.

I'm not trying to claim anything, I'm trying to understand the process.

I'm trying to make people understand that from the client's perspective, whether they pay a higher fee (which doesn't include accommodation) or they pay a lower fee + cover accommodation, these can equal to the same value for the client. Which then means that if the contractor pays for his accommodation expenses and gets receipts, they can choose to either claim the cost of the accommodation on the receipt OR claim HMRC's overseas expenses Room rate.

I seem to be disliked for pointing out the above fact, I don't know why?

It seems quite clear that if the contractor pays pays for the accommodation themselves, they can either claim that back or the HMRC's overseas Room rate - or am I wrong here?

If I'm wrong, I will happily put my hands up and apologise.

So based on the above, there seems to be an advantage to the contractor if the cost of their accommodation is LESS than HMRC's Room rate.

If the accommodation cost if higher than HMRC's room rate, then it's obviously better to stick to claiming back the actual accommodation cost that was paid, hence ignoring HMRC's rate.

[eek]

I'm not trying to claim anything, I'm trying to understand the process.

I'm trying to make people understand that from the client's perspective, whether they pay a higher fee (which doesn't include accommodation) or they pay a lower fee + cover accommodation, these can equal to the same value for the client. Which then means that if the contractor pays for his accommodation expenses and gets receipts, they can choose to either claim the cost of the accommodation on the receipt OR claim HMRC's overseas expenses Room rate.

I seem to be disliked for pointing out the above fact, I don't know why?

It seems quite clear that if the contractor pays pays for the accommodation themselves, they can either claim that back or the HMRC's overseas Room rate - or am I wrong here?

If I'm wrong, I will happily put my hands up and apologise.

So based on the above, there seems to be an advantage to the contractor if the cost of their accommodation is LESS than HMRC's Room rate.

If the accommodation cost if higher than HMRC's room rate, then it's obviously better to stick to claiming back the actual accommodation cost that was paid, hence ignoring HMRC's rate.

Because it's not an either OR question.


See the link I posted above where it states

As long as your employee has actually spent the scale rate payment on business expenses, you will not need to check every single receipt - it’s fine to just check a sample.

I.e. HMRC are stating that you can't make a profit via expenses.

And as I've also commented - given that you need to record expenses just get an app that does that and claim the actual amounts.

Finally The subsistance rates are there for convenience and given that its now possible to automate things and collect all receipts in a hassle free low admin way I don't believe those rates will be allowed for much longer.

Edit to add - I spent from 2017 to 2019 travelling continually round europe. Expenses via an app took me about 20 minutes a month to process and that was because I needed to generate 2 sets of receipts, one for expenses MS couldn't send to the end client and 1 for those they could send.