Clarification on subsistence

[Biker Boy]

Do the per diem rates (without need of receipt) apply also to those with their own Ltd Co?

Dunno, I'm just as green on this subject.

[ASB]

Cue the argument about whether you have to spend it.

Does it mean:-

a) If in the smoke you can claim 95 quid if you stay in a hotel and that is the end of the matter.

b) If in the smoke you can claim upto 95 quid without a receipt if you stay in a hotel, but there is always the risk that the IR might come knocking in a subsequent investigation and then miight ask some difficult questions.

I have discounted spending over 95 quid since you will always need a receipt for that.

[expat]

Cue the argument about whether you have to spend it.

Actually I was thinking especially of the £25 for "staying with friend or relative". That was going to be my next question.

[Biker Boy]

I'm guessing, but trying to use common sense. In the Hotel scenario, at the very least you will need to be able to name the establishment, and if they charge a max of say £69.99 per night for any room, then claiming any more might be foolish.

In the case of friends and family, I'd take that as £25, but make sure they get at least a bottle a week for putting up with you.

Just my humble thoughts.

[Bradley]

Receipts

What the dispensation says is that Prosperity 4 don't need to see the receipts before it pays out the per diem amounts.

It does not say that receipts are not required to be kept by the employee (which they do) but it does say that these are the maximum amounts it can pay without having to report it on the P11D.

[Biker Boy]

Thanks for that Bradley. Like I said before, I'm a bit green on this.

[Captain Jack]

Just to underline what Bradley said so succintly as we seem to be going through this virtually every week. You can only claim expenses you have incurred. You have to provide receipts or other proof of expenditure if challenged by HMRC. If you can't you will be presented with a bill for the tax due plus interest and possible penalties.

[Captain Jack]

Indeed you did, sexy. But it still seemed to be under debate on this page so worth underlining I thought.

[ASB]

What the dispensation says is that Prosperity 4 don't need to see the receipts before it pays out the per diem amounts.

It does not say that receipts are not required to be kept by the employee (which they do) but it does say that these are the maximum amounts it can pay without having to report it on the P11D.

Quite. To be fair the wording on the dispensation doesn't make that clear. But they are documents between IR and somebody who would understand this - i.e. payroll.

Passing those documents on to end users who may not understand the distinction is bound to lead to confusion.