Reply to: Overseas Expenses

[NotAllThere]

If I'm wrong, I will happily put my hands up and apologise.

You're wrong. We shall not wait for an apology. Thread locked.

[northernladuk]

All I was trying to figure out was that point, as it seemed to not make too much sense, but if it's a limit and not fixed then makes more sense.

Obviously I'm not going to claim more than I can, I wanted to understand, because who would go into contracting/open a business and risk it all for a few pounds like that?

Cool story bro. Who are you trying to kid? The thread starting out with you trying to commit tax fraud and then has focused on the details of which makes you the most money. You even stated it was obvious you'd pick the highest one in post

So based on the above, there seems to be an advantage to the contractor if the cost of their accommodation is LESS than HMRC's Room rate.

You are talking utter tripe now.

[eek]

I think the key point the OP is missing is that the scale rate is a limit, not a fixed charge. So if you spend less but still claim the full scale allowance, then it's fraud, pure and simple...

Umbrellas used to use scale rates for a long time to boost their client's earnings until HMRC stamped on them very hard for doing so. It's also why expenses got binned for IR35-caught workers.

The only exception I know of where you claim the scale rate regardless is trivial costs, such as newspapers, the odd coffee or calls home from a hotel or similar.

It's worth looking at how the few umbrellas that still do expenses are now doing it..

They will deduct £X a day from the umbrella / assignment fee for expenses - so say £200 a week.

But will only return the amount you can provide invoices for up to that £200 and will usually pocket the difference for themselves.

Again the important thing here - is that the umbrella will only pay expenses that you can provide receipts for (mileage claims are a complete no-no and need to be done via the end of year tax return).

[pennywisetrading]

I think the key point the OP is missing is that the scale rate is a limit, not a fixed charge. So if you spend less but still claim the full scale allowance, then it's fraud, pure and simple...

Umbrellas used to use scale rates for a long time to boost their client's earnings until HMRC stamped on them very hard for doing so. It's also why expenses got binned for IR35-caught workers.

The only exception I know of where you claim the scale rate regardless is trivial costs, such as newspapers, the odd coffee or calls home from a hotel or similar.

OHHHH Right!!! Now it makes sense!

See, this is what I was asking, and if the scale rate is not fixed then obviously I won't claim more than the amount spent.

All I was trying to figure out was that point, as it seemed to not make too much sense, but if it's a limit and not fixed then makes more sense.

Obviously I'm not going to claim more than I can, I wanted to understand, because who would go into contracting/open a business and risk it all for a few pounds like that?

[northernladuk]

I think the key point the OP is missing is that the scale rate is a limit, not a fixed charge. So if you spend less but still claim the full scale allowance, then it's fraud, pure and simple...

And that point alone answers the OP's question and shuts this whole topic down. You claim what you spent, either via the receipt of the scale rate and away you go. No profit to be made from the taxman here.

[northernladuk]

If the accommodation cost if higher than HMRC's room rate, then it's obviously better to stick to claiming back the actual accommodation cost that was paid, hence ignoring HMRC's rate.

I think we were all waiting for this sentence. There was going to be a wangle or a gain somewhere in all this, which would be why you are so insistent. The scale rates are there to simplify things, not rip HMRC off.

I did a few stints out in the Middle East for a client and I'm not sure why but the scale rate for Egypt were particularly askew from the cost I was claiming. My accountant advised, quite sensibly, just to claim what I spent and not to look at the rates for financial gain. It just wasn't worth the hassle and potential risk.
Like Eeks says, it takes a couple of minutes to put all the receipts in to FreeAgent and job was done. No dicking about, no making money from HMRC and arguable taking the piss.

If the crux of your question is can I pick the method that makes me the most money then just go for it, fill your boots and sleep with one eye open. You won't get a straight answer from us on that one. If you have to ask which method of doing my expenses makes me the most money then you know you are doing something wrong.

Not sure what else there is to add to this one....

And yet again... WHY HAVE YOU NOT ASKED YOUR ACCOUNTANT?

[malvolio]

I think the key point the OP is missing is that the scale rate is a limit, not a fixed charge. So if you spend less but still claim the full scale allowance, then it's fraud, pure and simple...

Umbrellas used to use scale rates for a long time to boost their client's earnings until HMRC stamped on them very hard for doing so. It's also why expenses got binned for IR35-caught workers.

The only exception I know of where you claim the scale rate regardless is trivial costs, such as newspapers, the odd coffee or calls home from a hotel or similar.

[eek]

I'm not trying to claim anything, I'm trying to understand the process.

I'm trying to make people understand that from the client's perspective, whether they pay a higher fee (which doesn't include accommodation) or they pay a lower fee + cover accommodation, these can equal to the same value for the client. Which then means that if the contractor pays for his accommodation expenses and gets receipts, they can choose to either claim the cost of the accommodation on the receipt OR claim HMRC's overseas expenses Room rate.

I seem to be disliked for pointing out the above fact, I don't know why?

It seems quite clear that if the contractor pays pays for the accommodation themselves, they can either claim that back or the HMRC's overseas Room rate - or am I wrong here?

If I'm wrong, I will happily put my hands up and apologise.

So based on the above, there seems to be an advantage to the contractor if the cost of their accommodation is LESS than HMRC's Room rate.

If the accommodation cost if higher than HMRC's room rate, then it's obviously better to stick to claiming back the actual accommodation cost that was paid, hence ignoring HMRC's rate.

Because it's not an either OR question.


See the link I posted above where it states

As long as your employee has actually spent the scale rate payment on business expenses, you will not need to check every single receipt - it’s fine to just check a sample.

I.e. HMRC are stating that you can't make a profit via expenses.

And as I've also commented - given that you need to record expenses just get an app that does that and claim the actual amounts.

Finally The subsistance rates are there for convenience and given that its now possible to automate things and collect all receipts in a hassle free low admin way I don't believe those rates will be allowed for much longer.

Edit to add - I spent from 2017 to 2019 travelling continually round europe. Expenses via an app took me about 20 minutes a month to process and that was because I needed to generate 2 sets of receipts, one for expenses MS couldn't send to the end client and 1 for those they could send.

[pennywisetrading]

And the answer was yes, you can, but arguably you will be acting fraudulently by claiming more tax relief that you are entitled to.

But it seems there is no point in telling you things that you don't want to hear.

I'm not trying to claim anything, I'm trying to understand the process.

I'm trying to make people understand that from the client's perspective, whether they pay a higher fee (which doesn't include accommodation) or they pay a lower fee + cover accommodation, these can equal to the same value for the client. Which then means that if the contractor pays for his accommodation expenses and gets receipts, they can choose to either claim the cost of the accommodation on the receipt OR claim HMRC's overseas expenses Room rate.

I seem to be disliked for pointing out the above fact, I don't know why?

It seems quite clear that if the contractor pays pays for the accommodation themselves, they can either claim that back or the HMRC's overseas Room rate - or am I wrong here?

If I'm wrong, I will happily put my hands up and apologise.

So based on the above, there seems to be an advantage to the contractor if the cost of their accommodation is LESS than HMRC's Room rate.

If the accommodation cost if higher than HMRC's room rate, then it's obviously better to stick to claiming back the actual accommodation cost that was paid, hence ignoring HMRC's rate.

[northernladuk]

Original post added.

How about either deleting the thread because they've already got one running or locking it because they've had their answer? This is borderline trolling now.

[northernladuk]

Did you ask your accountant as was suggested a number of times? If not why not? This is exactly the type of post I mentioned, where a poster will ignore all the advice except the answer they want to hear. They won't ask their accountant if told to do so, won't read and understand the link but will continue to argue until they get the answer they want.

This this case, as already stated numerous times. We can't give you a yes no answer because we know there is a back story and we would just be aiding in tax fraud if we said yes you can knowing exactly why you are asking.

[eek]

And let's go to the actual documentation from

https://www.gov.uk/expenses-and-bene...-rate-payments

As long as your employee has actually spent the scale rate payment on business expenses, you will not need to check every single receipt - it’s fine to just check a sample.

So you can't claim for things you haven't spent (that is tax fraud as I've already stated) so if you are collecting receipts you really should get into the habit of collecting all of them - as it's really not difficult nowadays. I used to be able to do it in seconds (use an expenses app, take photo double check the Ai generated description and run a monthly report)

[NotAllThere]

It's not because now you are hiding the fact that in your previous question the end client was paying your travel costs either directly or via expenses.

Original post added.

[eek]

Slightly different question, more straightforward yes/no this time to keep it simple for understanding, also was told to post in Accounting instead so did so

It's not because now you are hiding the fact that in your previous question the end client was paying your travel costs either directly or via expenses.

[malvolio]

And the answer was yes, you can, but arguably you will be acting fraudulently by claiming more tax relief that you are entitled to.

But it seems there is no point in telling you things that you don't want to hear.