Claiming HMRC's Abroad Room Rate if client paying accommodation expenses?

[pennywisetrading]

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

[eek]

Ever heard of the term fraud especially tax fraud.

[pennywisetrading]

Ever heard of the term fraud especially tax fraud.

Sorry, new to contracting so not familiar with it all just yet. So are you saying its not allowed?

If not, why does hmrc allow scale rate expenses for abroad then?

[malvolio]

Sorry, new to contracting so not familiar with it all just yet. So are you saying its not allowed?

If not, why does hmrc allow scale rate expenses for abroad then?

Put it this way - YourCo is not a magic money generating machine for your personal costs. If you were covering your own expenses for your overseas work then you can claim a small amount for living costs to cover minor stuff like newspapers and phone calls home that you won't have invoices for. Those are what is generally meant by scale rate expenses (there are several other variations on that theme, but they won't apply here) and are £10 a day. Meals, travel and the other big items will have invoices so you can claim them - or to be precise, you can claim back the personal taxes on them.

However if you are getting you bills paid by the client, you aren't making any taxable losses so you can't therefore claim the tax relief.

It's all perfectly logical. But you perhaps need to do some more reading and properly understand the relationship betwee you, YourCo, clients money and taxation.

[jamesbrown]

You probably intended to post this in Accounting...

No, you cannot claim the room rate when no room rate expense was incurred.

You can claim the subsistence or "residual" rate, though.

[jamesbrown]

and are £10 a day

That is not an international scale rate, that is the UK rate for between 5 and 10 hours, IIRC. International scale rates are way more generous.

[jamesbrown]

You probably intended to post this in Accounting...

No, you cannot claim the room rate when no room rate expense was incurred.

You can claim the subsistence or "residual" rate, though.

I should probably add that you should meet all the other conditions too, including that it's wholly and exclusively for business purposes, and you can only claim a fraction of the subsistence or residual rate under some circumstances (e.g., serviced flat, staying with a mate or some other sham).

[northernladuk]

You probably intended to post this in Accounting...

No, you cannot claim the room rate when no room rate expense was incurred.

You can claim the subsistence or "residual" rate, though.

There seems to be a ton of newbie posts landing in General over the last few weeks for some reason. Nearly all of them should have been in other parts of the forum. This one is a bit borderline

[pennywisetrading]

You probably intended to post this in Accounting...

No, you cannot claim the room rate when no room rate expense was incurred.

You can claim the subsistence or "residual" rate, though.

The room rate expense does occur as I have to pay for hotels/accommodation...

[pennywisetrading]

Put it this way - YourCo is not a magic money generating machine for your personal costs. If you were covering your own expenses for your overseas work then you can claim a small amount for living costs to cover minor stuff like newspapers and phone calls home that you won't have invoices for. Those are what is generally meant by scale rate expenses (there are several other variations on that theme, but they won't apply here) and are £10 a day. Meals, travel and the other big items will have invoices so you can claim them - or to be precise, you can claim back the personal taxes on them.

However if you are getting you bills paid by the client, you aren't making any taxable losses so you can't therefore claim the tax relief.

It's all perfectly logical. But you perhaps need to do some more reading and properly understand the relationship betwee you, YourCo, clients money and taxation.

So from what you're saying, I get it that since my client is paying, I can't also claim room rate, this makes sense but I read online that whatever my client pays vs what I claim from my own Ltd company is unconnected, so guess what was false then?

If my client was paying me a set rate which didn't include accommodation, and I payed for accommodation myself, so only then I'd be able to claim HMRC's abroad Room rate for the country?