HMRC - What Do They Know - Visa fee as a tax deductible expense

[myco]

Are VISA fees a tax-deductible expense? - a Freedom of Information request to HM Revenue and Customs - WhatDoTheyKnow

Looks like they are saying it is an allowable expense?

BTW, what if I go ahead and claim it and then they do a review and find it isn't. Will I have to pay tax as if the £1600 is additional income in that year? Interest? Slap on a fine?

[pmeswani]

Are VISA fees a tax-deductible expense? - a Freedom of Information request to HM Revenue and Customs - WhatDoTheyKnow

Looks like they are saying it is an allowable expense?

BTW, what if I go ahead and claim it and then they do a review and find it isn't. Will I have to pay tax as if the £1600 is additional income in that year? Interest? Slap on a fine?

An employer can claim for a visa fee paid on behalf of a prospective employee as a business expense in the accounts, provided the sole purpose in paying the fee is to secure the services of the prospective employee.

1. You really need to ask your Accountant your question.

2. Ask yourself, are you planning on doing anything other than provide services to a client during the 5 year period? If not, why not charge the client the cost of the Visa?

However, I don't believe this is a taxable allowable expense, but I could be wrong.

[myco]

I did ask my accountant. They have kind of a neutral to negative view on it.

It's a Tier 1 UK visa. If it were some other place I would have certainly have claimed it. Since I am in UK on this UK visa, after having read that reponse from HMRC on the topic, I think I should claim it.

I know the usual board view on it is towards the negative (since one would be living in UK anyway or something like that). Or to claim it an see what happens (usually nothing). But in light of that reponse in the link, maybe it is more positive.

[pmeswani]

I did ask my accountant. They have kind of a neutral to negative view on it.

It's a Tier 1 UK visa. If it were some other place I would have certainly have claimed it. Since I am in UK on this UK visa, after having read that reponse from HMRC on the topic, I think I should claim it.

I know the usual board view on it is towards the negative (since one would be living in UK anyway or something like that). Or to claim it an see what happens (usually nothing). But in light of that reponse in the link, maybe it is more positive.

So, if I told you that you shouldn't claim it as it is a debatable claim, would you not claim it, irrespective of what evidence I bring?

Your Accountant isn't able to give you an answer you are looking for, and yet you want to claim it anyway. So go ahead and claim it, if HMRC question it, show them the evidence and let them decide. Or even better, contact the HMRC and explain your situation. If they say yes, go for it. If they don't, well.... I let you decide.

If you know the boards view is negative, what makes you think that is going to change based on your post?

Sorry to be negative, but this isn't something we should be advising, and as your Accountant has already provided you with a response and you chose to ignore it. So, what makes you think that you will accept our comment? If we say yes and you are asked to pay it back by the HMRC, are you going to blame us for it or take responsibility for yourself?

Also, your Accountant has to prepare your accounts. If he says no, and declare it, they may equally turn around and refuse to do your year end accounts.

[northernladuk]

I would say the accountant is neutral to negative because there are so many twists and turns what could be alloweable to start could quite easily drop out of scope in a few months time. It appears to me that a huge dose of honesty from the OP is required and the accoutnats are not going to give a positive response on something they have no control over. Reading between the line it appears it is 'possible' to claim it but for the sole purpose of securing that employee. A whole host of things would break that 'sole purpose' line so making it unclaimable.

The grey area for me is that I don't believe your company is getting a visa for the sole purpose of securing your services. Your LTD is employing you whatever you do, so the sole purpose could fail. You are too connected to your own LTD for this sole purpose issue. Any other employer I would say yes, they want you over for the sole purpose to work for them. Bottom line is your attitude to risk on this one. Worst they can do is charge you the tax you didn't pay plus interest plus a fine.

It's really up to you.

[myco]

So, if I told you that you shouldn't claim it as it is a debatable claim, would you not claim it, irrespective of what evidence I bring?:

If you show me evidence where HMRC disallows the claim for my exact case (which is quite common - a recent Tier 1 contractor), I won't claim it. We all have our contracts say that if I don't have a visa, I can't fulfill the contract.

If you know the boards view is negative, what makes you think that is going to change based on your post?

That would be the HMRC reponse on the link I posted. Looks like they are saying it is ok to do so to me. And it is in response to specifically the Tier 1 / HSMP visa. This link wasn't posted or discussed here already AFAIK. Did you even have a look before responding? The board view has been that 'you would live here anyway'. I would have thought HMRC would respond in the same fashion - but they did not.

The link also says "I would also point out that relief under section 373/374 is subject to a 5 year limit from the date a non-domiciled employee arrives in the UK, so a visa renewal more than 5 years after arrival would not qualify for relief." That works out for my case - not that I see just that as a 'yes, claim it'.

Sorry to be negative, but this isn't something we should be advising, and as your Accountant has already provided you with a response and you chose to ignore it. So, what makes you think that you will accept our comment?

The accountants would err on the side of caution. And I wouldn't blame them for it. And I did say the accountant is not really saying it isn't claimable - just the usual if it is wholly and exclusively....thing.

If we say yes and you are asked to pay it back by the HMRC, are you going to blame us for it or take responsibility for yourself?:

Now, don't be silly please.

[cojak]

You asked for advice, we gave it - you can take it or leave. Just because it wasn't the advice you were looking for is no reason to tell people off and insist that they try again.

Please review the behaviour expected in these professional forums.
http://forums.contractoruk.com/busin...al-forums.html

[myco]

You asked for advice, we gave it - you can take it or leave. Just because it wasn't the advice you were looking for is no reason to tell people off and insist that they try again.

Please review the behaviour expected in these professional forums.
http://forums.contractoruk.com/busin...al-forums.html

I re-read my last. I don't see the part where I tell anyone off. Rather I see condescending responses and a 'you asked a stupid question' flavour in most responses. And I accept those gracefully because that's how it works around here.

[LisaContractorUmbrella]

If you came to the UK specifically to work on this contract, say as a secondment for a company you were already working for, then the cost of your travel to the contract location would be allowable as would the cost of the Visa as it is specifically an associated cost of the travel. However, if you came to the UK on a tier one visa to look for work and then found this contract the cost would not be allowable and neither would the cost of travel from homeland to the UK under the wholly and exclusively rule.

[Clare@InTouch]

If you came to the UK specifically to work on this contract, say as a secondment for a company you were already working for, then the cost of your travel to the contract location would be allowable as would the cost of the Visa as it is specifically an associated cost of the travel. However, if you came to the UK on a tier one visa to look for work and then found this contract the cost would not be allowable and neither would the cost of travel from homeland to the UK under the wholly and exclusively rule.

I'd agree with that.

It's the same logic with relocation costs, you need to consider the driving factor behind the cost - was the cost because of the job, or as a consequence of a personal choice to move (from which getting a job was the next step).