Do these expenses qualify for pre-tax deduction?

[engineer123]

Hi,

I am a UK permanent resident (ILR). I took up full-time employment with the US branch of my UK employer in last tax year. I was on the payroll of the US employer. My offer letter did not specify any fixed term like one year or two year. I resigned and came back to the UK after 3 months to pursue another employment. During this time, I was maintaining an accommodation in the UK as well where my spouse was living.

During the 3 months in the US, I paid US taxes and expenses from my own pocket for the following :-

1. Travel to the USA and back to the UK ( receipts available)
2. Rented accommodation (receipts available)
3. Household expenses ( no receipts but about GBP 10 per day)

Please can anyone advise if I can claim the above expenses as pre-tax deduction on my foreign employment income for the purpose of self-assessment tax return.

Thanks

[eek]

Hi,

I am a UK permanent resident (ILR). I took up full-time employment with the US branch of my UK employer in last tax year. I was on the payroll of the US employer. My offer letter did not specify any fixed term like one year or two year. I resigned and came back to the UK after 3 months to pursue another employment. During this time, I was maintaining an accommodation in the UK as well where my spouse was living.

During the 3 months in the US, I paid US taxes and expenses from my own pocket for the following :-

1. Travel to the USA and back to the UK ( receipts available)
2. Rented accommodation (receipts available)
3. Household expenses ( no receipts but about GBP 10 per day)

Please can anyone advise if I can claim the above expenses as pre-tax deduction on my foreign employment income for the purpose of self-assessment tax return.

Thanks

Our usual advice is see an accountant. This is more complex than that but I think the answer is depends on what the US allows as expenses but in all likelihood no....

[engineer123]

Our usual advice is see an accountant. This is more complex than that but I think the answer is depends on what the US allows as expenses but in all likelihood no....

I meant expenses for UK tax return.

[northernladuk]

As the place you were working in the US is your permanent workplace I would say no you can't.

Employee travel expenses - FreeAgent

Good discussion on it at the link above but I think the key text is...

No relief for ordinary commuting

If an employer reimburses an employee for what HM Revenue call “ordinary commuting”, then both the employer and employee will have more money to pay over to HM Revenue in tax and/or NIC.

“Ordinary commuting”, according to HM Revenue, is:

“Any travel between a permanent workplace and home, or any other place which is not a workplace.”

Travel between two workplaces is business travel.

But any travel between the permanent workplace and an employee’s home, or somewhere else the employee visits for non-work reasons (and non-work includes the employee doing another job for another employer) is not business travel.

“Travel”, includes subsistence and accommodation as above.

And “any travel” really does mean any travel, even when you think it might be OK.

For example, if I stay over in Edinburgh on a weeknight because Ed asks me to attend a meeting which is due to start early the following morning, earlier than I could arrive on the first train from my home-town, Carlisle - I can’t claim the cost of my hotel stay, because it still counts as ordinary commuting. It doesn’t matter that my employer has asked me to stay.

Even a late-night journey to work to switch off a ringing burglar alarm would still be ordinary commuting.

and

Travel expenses: travel for necessary attendance: definitions: permanent workplace

Section 339(2) ITEPA 2003
A place at which an employee works is a permanent workplace if he or she attends it regularly for the performance of the duties of the employment. It is usually clear whether or not a place is an employee's permanent workplace (and, therefore, whether a journey to that place is ordinary commuting). It is possible for an employee to have more than one permanent workplace at the same time, see EIM32140. The cost of travel to a permanent workplace is not deductible under Section 338 ITEPA 2003, see EIM32055.

Haven't a clue how this relates to your personal SA though but would guess as no one else can claim it then you won't be able to either. Might be just food for thought but an accountant is your best stop I would say.

Big list of employee related travelling here if you fancy it. Again it's about employee travel so guess it won't be any use.

http://www.hmrc.gov.uk/manuals/eimanual/eim32000.htm

[northernladuk]

Some more here.....

HM Revenue & Customs: Tax relief for travel and subsistence

Again all keeps coming back to the difference between business travel and ordinary commuting. I would say travel and staying over there is ordinary commuting as it is your place of work. Maybe an accountant will say different....

[engineer123]

Can I apply the following to claim the air fare to the USA and back to the UK?

Foreign travel rules: duties performed wholly abroad: employee's initial and terminal journeys

[northernladuk]

Can I apply the following to claim the air fare to the USA and back to the UK?

Foreign travel rules: duties performed wholly abroad: employee's initial and terminal journeys

That is an interesting find. Didn't you say the employer was UK employer and this was just a US branch. Would that fail the last criteria?

where the employer is a foreign employer (see EIM40031), the employee is domiciled in the United Kingdom.

Were you paid in sterling in the UK?

[stek]

I might need a business visa for Russia, for an interesting nibble, Easyjet 150 quid or so to Moscow, visa is £600 (thats top one - i do nowt, agent does all - 12 mnth multi, £300 if I do the running around that'll cost more than the extra £300), legally looking for work is not allowed on a tourist visa, so has to be a bus. vis. - work permit is another issue if anything comes off, i'm claiming for that if I take it up...

So there.

[northernladuk]

I might need a business visa for Russia, for an interesting nibble, Easyjet 150 quid or so to Moscow, visa is £600 (thats top one - i do nowt, agent does all - 12 mnth multi, £300 if I do the running around that'll cost more than the extra £300), legally looking for work is not allowed on a tourist visa, so has to be a bus. vis. - work permit is another issue if anything comes off, i'm claiming for that if I take it up...

So there.

It's part of your sales activity so you LTD can foot the bill for that. OP is talking about personal taxation on a perm job which I would think is a little different.

Take bloody ages to get the business visa. You/the agent using a company over there to help secure the invite and stuff?

[stek]

It's part of your sales activity so you LTD can foot the bill for that. OP is talking about personal taxation on a perm job which I would think is a little different.

Take bloody ages to get the business visa. You/the agent using a company over there to help secure the invite and stuff?

I know! 45 days!

No matter, I know some people there and can probably get it 'po blatu' - i.e. using 'contacts' - if not i'll just forget it. Just it seemed easier working in London area for a quick hop....

Some good rates out there on paper, mostly SAP tho, which I know nowt about, just they assume you sort out the Work Permit which is gettable, but not easy..