UK Citizen resident abroad contracting in the UK - Expense reimbursement questions

[Raygo]

Well, thanks for all your responses I'll continue researching this further and if I find any more useful info I'll post it here.

Cheers

[WTFH]

Strange that if I'm already in another part of the UK my rent would be reimbursable. I guess it's because you're paying double rent or something.

No, it's because you'd already be tax resident in the UK.

[Raygo]

Thanks Kenny

The residence you rent in the UK would become your primary residence for UK tax purposes and as such the rent would not be an allowable expense for the company as it would if your family home was in a different part of the UK.

Strange that if I'm already in another part of the UK my rent would be reimbursable. I guess it's because you're paying double rent or something.

If you had setup a company in your home country and then worked in the UK the costs may have been allowable depending on that countries tax rules, but you would likely still be liable to UK corporation tax on any income generated in the UK.

Fair enough, happy to pay all taxes that need to be paid obviously, would have just been nice to be able to have these reimbursed.

[Kenny@MyAccountantFriend]

[LIST=1]

1. Can I get my monthly rent expenses reimbursed by MyCo Ltd
2. Can I get my monthly travel expenses reimbursed by MyCo Ltd
3. Not so important - Can I get my daily food costs reimbursed by MyCo Ltd or do the normal rules apply of 5 - 10 hours £5 subsistence and 10 hours £10 and if working evening as well £x (I don't know how much it is)

For question 3. I know that if the answer is yes to 1 and 2 then 3 would be a given. Of course all of these are valid up to 24 months as far as I understand it and from then on it becomes your normal place of work and you can no longer get all of the above fully reimbursed.

I haven't found anything on the web so far on a situation similar to this. I've asked my accountant and he's asked around the office and he's getting conflicting answers. SOme say yes, some say no.

The residence you rent in the UK would become your primary residence for UK tax purposes and as such the rent would not be an allowable expense for the company as it would if your family home was in a different part of the UK.

As a result of the property becoming your primary residence the travel to and from your family abroad would also not be allowable for the company as an expense.

If you had setup a company in your home country and then worked in the UK the costs may have been allowable depending on that countries tax rules, but you would likely still be liable to UK corporation tax on any income generated in the UK.

Travel from the UK property to your client site would be allowable per the temporary workplace rules though and the same for subsistence claims.

[northernladuk]

Were you working in Dominica? Does Dominica have the same laws as the UK? Were you taking cash out of Dominica for work done there? Did you have a permanent place to stay in Dominica rather than a hotel/holiday home?

Your holiday is rather different. I'm not an expert but your comparison isn't really valid.

Here's a 100 page document on the subject that I've not read. https://assets.publishing.service.go...nal_078500.pdf

That's all about tax residency.. It states the following at the top of the document.

The SRT applies for the purposes of establishing your residence status, or the residence status of another person where that is relevant, for:
 Income Tax
 Capital Gains Tax, and
 where relevant
 Corporation Tax

The question here is about residency from a commuting point of view. So the only thing that should affect this would be the 24 month rule and temporary workplace rules as it would anyone else travelling from home to a hotel?

[WTFH]

So I think the issue is not really being non-resident, it's probably that my normal place of abode/home is overseas. As mentioned, that's where my family is etc.

If you are tax resident in the UK, then no, you can't write off holidays to abroad as a company expense.
It doesn't matter that you might call somewhere abroad your "normal place of abode", it's not where you live from the taxman's viewpoint. Doesn't matter if it's where your wife, ex-wife, mistress, mother, sister, or any combination of the above live (if you're from Norfolk, that might be the same person), but it's not where you're tax resident.

[WTFH]

What if I went back every weekend or every fortnight for the weekend, could I expense my flights?

Possibly. Whether it's legal to do it is one question. Whether it's an efficient use of company funds is a totally different one. If it costs you £20 return on a Ryanair ticket, then your company is only out £80 a month. If by "abroad" you mean a long haul flight, costing you >£300 each way, then your company is out by £2,400 a month.
And even then, you would still be spending the majority of your time in the UK.

What if I was staying in a hotel and going back overseas every weekend? Why should the fact that I'm renting an apartment be different to staying in a hotel?

You were the one who mentioned hotel v rented apartment. There are other options - AirBnB, etc. Also, is it better value to stay slightly further from the client and commute in, rather than choosing a studio apartment next door?

Your accountant might want to read this:
https://assets.publishing.service.go...nal_078500.pdf

[Raygo]

Thanks for your reply Lance.

This ^^^^^^^

To remain non-resident OP will need to travel back every weekend.
My suggestion would be to negotiate some flexibility with the client... Fly in Monday AM, stay in a hotel 4 nights a week (or less), work hard and fly back on a Friday (or Thursday if possible).
That way all travel and subsistence expenses are claimable.

This is from https://assets.publishing.service.go...nal_078500.pdf

It says: "First automatic UK test 1.23 You spend 183 days or more in the UK in the tax year."

This will most likely be the case because the contract will probably be extended.

So I think the issue is not really being non-resident, it's probably that my normal place of abode/home is overseas. As mentioned, that's where my family is etc.

Mix that up with some home working once you're settled. To be honest I'd not do that for much more than 6 months as it's soul destroying. The client co know this as well and if OP is any good they'll allow quite a lot of flexibility.

Some really good points here though, you're definitely right by that time I'd probably be half zombified. I'm hoping I can be valuable to them so that they provide me with more flexibility.

Cheers.

[Lance]

How can that be true? I went to the Dominican for 16 days a number of years ago. I didn't become a resident of the Dominican.

I'm not sure his residency is affected by him staying away for 3 weeks and a few days is it? It's still a temporary address and he has a main one, albeit out of the country.

Were you working in Dominica? Does Dominica have the same laws as the UK? Were you taking cash out of Dominica for work done there? Did you have a permanent place to stay in Dominica rather than a hotel/holiday home?

Your holiday is rather different. I'm not an expert but your comparison isn't really valid.

Here's a 100 page document on the subject that I've not read. https://assets.publishing.service.go...nal_078500.pdf

[northernladuk]

To remain non-resident OP will need to travel back every weekend..

How can that be true? I went to the Dominican for 16 days a number of years ago. I didn't become a resident of the Dominican.

I'm not sure his residency is affected by him staying away for 3 weeks and a few days is it? It's still a temporary address and he has a main one, albeit out of the country. Id imagine number of days spent in the country will be an issue but just not going home at weekends isn't an issue is it?

[Raygo]

Thanks for the response WTFH.

1. How long is the contract for?

6 months

2. You say you "must" rent a studio flat. No, it's not a "must", that's your choice.

Well I could live in a flat share or in the hilton so yeah it's a choice but either way it's a fair miiddleground, just wondering if I can get it reimbursed.

If you are living in the UK 7 days a week and only going to visit your family abroad once a month for a weekend, then you will no longer be non-resident. You will be a UK resident.

Yes indeed, I understand this and that's why I mentioned non-resident 2012 - 2018 as this will definitely make me UK resident again.

Then the only expenses will be to and from your UK place of abode to the client site, up until he point that you are aware the contract may run for more than 24 months.

What if I went back every weekend or every fortnight for the weekend, could I expense my flights?

It would have probably been a good idea to have thought about this before signing the contract.

It's not an issue or anything and there are no regrets with taking up this assignment, I just want to be clear on what I have the right to get reimbursed, I'm just trying to be as tax efficient as possible as are we all.

What if I was staying in a hotel and going back overseas every weekend? Why should the fact that I'm renting an apartment be different to staying in a hotel?

[Lance]

Questions:
1. How long is the contract for?
2. You say you "must" rent a studio flat. No, it's not a "must", that's your choice.

If you are living in the UK 7 days a week and only going to visit your family abroad once a month for a weekend, then you will no longer be non-resident. You will be a UK resident. Then the only expenses will be to and from your UK place of abode to the client site, up until he point that you are aware the contract may run for more than 24 months.

It would have probably been a good idea to have thought about this before signing the contract.

This ^^^^^^^

To remain non-resident OP will need to travel back every weekend.
My suggestion would be to negotiate some flexibility with the client... Fly in Monday AM, stay in a hotel 4 nights a week (or less), work hard and fly back on a Friday (or Thursday if possible).
That way all travel and subsistence expenses are claimable.

Mix that up with some home working once you're settled. To be honest I'd not do that for much more than 6 months as it's soul destroying. The client co know this as well and if OP is any good they'll allow quite a lot of flexibility.

[WTFH]

Questions:
1. How long is the contract for?
2. You say you "must" rent a studio flat. No, it's not a "must", that's your choice.

If you are living in the UK 7 days a week and only going to visit your family abroad once a month for a weekend, then you will no longer be non-resident. You will be a UK resident. Then the only expenses will be to and from your UK place of abode to the client site, up until he point that you are aware the contract may run for more than 24 months.

It would have probably been a good idea to have thought about this before signing the contract.

[Raygo]

1. I'm a UK Citizen.
2. I moved with my whole family overseas and became UK non-resident from 2012 to 2018.
3. My normal place of abode is overseas, it has been so for approx 7 years.
4. I identified an opportunity in London with a company called ClientCo Ltd.
5. I travelled to the UK from overseas to discuss the opportunity with ClientCo Ltd and returned overseas.
6. I set up a Ltd company MyCo Ltd in the UK for this opportunity to provide services to ClientCo Ltd.
7. A contract between MyCo Ltd and ClientCo Ltd was drawn up, agreed upon and signed.
8. I returned to the UK a week later to start providing services to ClientCo Ltd as an employee/director of my MyCo Ltd .

Bearing in mind the following:

• My normal address/place of abode is overseas and my whole family is out there with children in schools etc
• I am an employee/Director of MyCo Ltd which is a UK based Ltd company
• I need to be in the UK (near the client, in London) for the purpose of this assignment (away from home)
• I must rent a small studio flat in London to be able to easily get to the client ClientCo Ltd offices daily to provide services as this is much more cost effective than staying in a hotel 5 days a week with return flights to and from home overseas
• MyCo Ltd wants to minimise the travel costs of its employee (me) to keep the project/assignment profitable by agreeing to allow travel back home to my family once per month

1. Can I get my monthly rent expenses reimbursed by MyCo Ltd
2. Can I get my monthly travel expenses reimbursed by MyCo Ltd
3. Not so important - Can I get my daily food costs reimbursed by MyCo Ltd or do the normal rules apply of 5 - 10 hours £5 subsistence and 10 hours £10 and if working evening as well £x (I don't know how much it is)

For question 3. I know that if the answer is yes to 1 and 2 then 3 would be a given. Of course all of these are valid up to 24 months as far as I understand it and from then on it becomes your normal place of work and you can no longer get all of the above fully reimbursed.

I haven't found anything on the web so far on a situation similar to this. I've asked my accountant and he's asked around the office and he's getting conflicting answers. SOme say yes, some say no.