Claiming generous Scale Rate 'Per Diem' subsistence expenses on Paris assignment?

[Boo]

I’m UK based and looking at taking a 6 month contract assignment based in Paris, France. I am considering doing this through either my own Ltd Company (as sole director/employee) or through a UK umbrella company. I wanted to know if I could pay myself a Per Diem rather than produce receipts for subsistence expenses.

My understanding is that you need to retain recipts to prove eligibility for scale rates but that the receipts are not used in the calculations as to what is claimed if you do use scale rates. I'd keep 'em anyway...

“Accommodation and subsistence payments at or below the published rates will not be liable for Income Tax or National Insurance contributions (NICs) for employees who travel abroad, and employers need not include them on forms P11D.”

I have looked at the 2013 subsistence rates for Paris (there is a link to the document on the page). It states the 24 hour rate is “116 EUR + room rate”. The room rate is shown as 198.5 EUR.

Does this mean that if I work a five day week, spending four nights in Paris per week and spending the rest of the time at home in the UK, I can claim a rather generous 4 x (116 + 198.5) = 1258 EUR per week as subsistence expenses, while not needing to produce any receipts, and not being liable for any tax or NICs on this?

It does mean exactly that and that is what I did when I worked in Belgium. You will also be able to claim the part-day rates for the remainder of the hours you spend abroad. You can additionally claim travelling (and subsistence bought during travelling) at cost, by producing receipts.

If possible, can this be done through both personal Ltd companies and through umbrella companies? If possible with the latter, can anyone recommend an umbrella company that can offer such an employment vehicle?

I assume that an umbrella co will permit this but it will depend upon the contract terms with them. There is nothing forcing a UC to pay your expenses. I'd go Ltd myself...

Boo

[ASB]

Yes, you can use the publidhed scaler rates. Hmrc will offer advice. Ring them.

if you are in a position where a uk agency is paying your company, fine. If you come to the attention of the french authorities they will br didpleade and you circumstances will dictate to what extent.

personally I billed clients direct from my company, they paid. I didnt spend thst much time physically in France. I got sensible advice from the french consulate in london.

by about 2010 clients simply refused to deal with my co - the lawyers were concerned as to risk falling back to them.. So I stopped dealing with them.

[malvolio]

Also, perhaps start by finding out what an employee is....?

[SueEllen]

If you go to work in France you pay tax like a French resident so you are taxed their from day one. As you are also resident in the UK that's when the dual tax agreement comes into play. You don't have to pay any more UK tax if the French tax rate on your income is higher.

I strongly suggest before you decide to go and work in other EU countries you bother to look into that individual country's tax laws.

While there are a few EU countries who will allow you to use your UK limited company or a UK based umbrella company if you are there for less than 183 days, the majority don't allow you to do so.

There are threads on here, which if you search you will find them, where people have been caught out by your thinking in Germany ,Belgium, the Netherlands and Norway. The German ones are worth reading.

[caustix]

I’m UK based and looking at taking a 6 month contract assignment based in Paris, France. I am considering doing this through either my own Ltd Company (as sole director/employee) or through a UK umbrella company. I wanted to know if I could pay myself a Per Diem rather than produce receipts for subsistence expenses.

I spoke to one umbrella company based in Switzerland who said that Per Diems were taxable like salary, but this didn’t sound right to me, so I have been reading the HMRC website with regards to Scale Rate Expenses Payments at the following link:

Employment income: scale rate expenses payments: accommodation and subsistence payments to employees travelling outside the UK

This site states that:
“HMRC therefore agreed in January 2008 that employers may use benchmark rates published on the HMRC website when paying accommodation and subsistence expenses to employees whose duties require them to travel abroad, without the need for the employees to produce expenses receipts.”

and also:
“Accommodation and subsistence payments at or below the published rates will not be liable for Income Tax or National Insurance contributions (NICs) for employees who travel abroad, and employers need not include them on forms P11D.”

I have looked at the 2013 subsistence rates for Paris (there is a link to the document on the page). It states the 24 hour rate is “116 EUR + room rate”. The room rate is shown as 198.5 EUR.

Does this mean that if I work a five day week, spending four nights in Paris per week and spending the rest of the time at home in the UK, I can claim a rather generous 4 x (116 + 198.5) = 1258 EUR per week as subsistence expenses, while not needing to produce any receipts, and not being liable for any tax or NICs on this?

If possible, can this be done through both personal Ltd companies and through umbrella companies? If possible with the latter, can anyone recommend an umbrella company that can offer such an employment vehicle?