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

[eek]

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

No if doesn't because you are passing the fees back to your client to pay as you started in your original post.

I will repeat my comment from earlier to me this is tax fraud.

[malvolio]

There's a very simple rule about legitimate expenses. If you make a net profit perosnally, you're doing something wrong.

[northernladuk]

You have an accountant right? Why not ask them if you don't believe us? They will explain it in detail so you will be able to understand it.

[ladymuck]

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

You claim the rate you paid or the room rate. Not both. It's a rate designed for scenarios where it's hard to get an invoice.

Your client is reimbursing your LtdCo for the expenses incurred so you are not actually incurring any expense that you need to claim from your LtdCo.

Even if the client wasn't reimbursing your LtdCo, your LtdCo could still deem the accommodation expense as wholly and necessary and claim tax relief but you as an individual couldn't claim the room rate because your LtdCo is covering the cost. You personally are not going to be out of pocket.

[Lance]

There's a very simple rule about legitimate expenses. If you make a net profit perosnally, you're doing something wrong.

your LTD making a profit is absolutely fine though.
I have many times made a profit of expenses into my company. My personal expense claims with the my company are always 100% above board.

[jamesbrown]

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

Nonsense, further details here.

Sounds like eek was right...

[gisp]

There's a very simple rule about legitimate expenses. If you make a net profit perosnally, you're doing something wrong.

Interesting this!
I will need to go for 10 day trip to visit a client abroad.

So far I have always reimbursed myself for 3 meals a day + transportation based on receipts from restaurants/tickets.

I stayed in a hotel for free, so no hotel expenses.

Looking at the rates though it will benefit me more if I take the above as scale rate expenses and dont bother collecting and collating invoices (real pain in the back at 7-8 per day). I will be like twice better off.

It seems the very simple rule above is not quite right.

[ladymuck]

Interesting this!
I will need to go for 10 day trip to visit a client abroad.

So far I have always reimbursed myself for 3 meals a day + transportation based on receipts from restaurants/tickets.

I stayed in a hotel for free, so no hotel expenses.

Looking at the rates though it will benefit me more if I take the above as scale rate expenses and dont bother collecting and collating invoices (real pain in the back at 7-8 per day). I will be like twice better off.

It seems the very simple rule above is not quite right.

Technically, claiming for meals is a grey area as the the requirement to eat is not wholly and exclusively for the purposes of trade or employment.

[pennywisetrading]

So in the future, if my end client payed me a set rate which did not include accommodation and I payed for accommodation costs myself, then it would be okay to claim the abroad room rate HMRC set?

Because isn't that a kind of loop hole? example:

SCENARIO 1:
Contractor Bob working abroad, charges his end client £200 per day + £50 per day for accommodation = £250 per day that end client has to pay.
In this case, Bob cannot claim HMRC's room rate too since accommodation is also covered by his end client.

SCENARIO 2:
Contractor Bob working abroad, charges his end client £250 per day (no accommodation included) = £250 per day that end client has to pay.
In this case, Bob can claim HMRC's room rate too since it's not covered by the client and he will pay it himself.

So for the end client, the bill/invoice is the same, so they won't mind either scenario, but for Bob, scenario 2 is better...? or am I missing something?

Because in Senario 2, Bob gets his rate of £250 from the client which covers his rate and accommodation but then he also gets HMRCs room rate too...

[malvolio]

So in the future, if my end client payed me a set rate which did not include accommodation and I payed for accommodation costs myself, then it would be okay to claim the abroad room rate HMRC set?

Because isn't that a kind of loop hole? example:

SCENARIO 1:
Contractor Bob working abroad, charges his end client £200 per day + £50 per day for accommodation = £250 per day that end client has to pay.
In this case, Bob cannot claim HMRC's room rate too since accommodation is also covered by his end client.

SCENARIO 2:
Contractor Bob working abroad, charges his end client £250 per day (no accommodation included) = £250 per day that end client has to pay.
In this case, Bob can claim HMRC's room rate too since it's not covered by the client and he will pay it himself.

So for the end client, the bill/invoice is the same, so they won't mind either scenario, but for Bob, scenario 2 is better...? or am I missing something?

Because in Senario 2, Bob gets his rate of £250 from the client which covers his rate and accommodation but then he also gets HMRCs room rate too...

The point of my earlier short and very simplistic post on how to look at expenses was meant to make you think about what it is they actually represent. Clearly that was a waste of effort. So perhaps you could try the empirical approach. Write out your proposed scenario and show it to your accountant for an informed opinion.

Or stop wasting our time with circular discussions on how to game the system.