Travel Expenses for Business Development

This has got me thinking. Let me give you a specific example, I’ll ask my accountant as well, but I’d be interested in your thoughts.

I work in the LMS and e-learning field and the leading e-learning conference is held annually in Las Vegas. It covers what’s coming up in the world of L&D, e-learning, etc, it’s sponsored by Adobe, Citrix, Articulate, etc and there’s talks by leading industry specialists. Whaddaya reckon? An allowable business expense? I reckon so, it’s 100% related to my business. What about flights, can I fly business class? Is that an allowable expense? If the conference is on one day, how many nights would it be reasonable to stay? Staying for just one night might be a bit unreasonable as it’s a long way away, but then staying for a week is taking the piss I’m sure.

FYI, I clearly want to go there to gamble; the conference is merely an excuse to pay via my business account. But it would be a useful conference in all seriousness.

Strictly speaking if part of the flight and hotel are for personal use, you will claim proportional of that as business expenses.
Thanks

Harry Lee

Mod note: please read the T&Cs for CUK forums. Giving advice is allowed, blatant advertising is not. You may want to change your login to Harry@MyCo, that way you can promote your company whilst giving advice.

[Taxless]

OK, so my accountant got back to me:


I think the key consideration here is whether attendence at a conference could be argued to be necessary. It's a hard call. I think it probably isn't. I do think it would a great opportunity, both for networking, information, knowledge, experience, etc. But I think it might be difficult to argue that it is necessary.

Hmmmm, one to consider I think. But I'm kind of erring towards being on the safe side and not going.

Not quite sure where your accountant is coming from on this one.

If the company decides to send you to the main conference in your field, then for it to be able to claim a deduction for CT purposes, the expense must be wholly and exclusively for business purposes.

If you as an employee of the company had decided to incur this, or any other expenses, and wished to claim the expense against your PAYE income, then to qualify for a deduction for PAYE, you would have to show that the expense had been incurred wholly, exclusively and neccessarily in the performance of your employment duties.

Here I think we are dealing with the former case as it is the company that will incur the expense, or reimburse you and they are making the decision, hence the need for paperwork to back this up.

Why else would the company send you to the Conference except to keep up to date, keep abreast of what's coming along etc.?

It would be the same for the proposed meeting with a potential contact for future business. You can call it what you think is most approriate, the question is whether the company is incurring the expense "wholly & exclusively" and if so it is claimable.

The amounts obviously have to be reasonable in proportion to the trip. Within your accounts it will probably be split between travel and subsistence or such like anyway.

[northernladuk]

The scenario I'm talking about is a weekend trip within Western Europe to meet with a potential business contact to discuss a new contracting opportunity.

In a similar manner to the conference I guess a brief itinerary for the trip (e.g. business contacts met, potential future roles discussed etc).

As an aside, would there be any issue with the trip being booked on my personal credit card (as opposed to being paid directly from the business account)?

Would a meet with a potential contact for future business be classed as sales not business development? You are after new business not developing extra business? Is the terminology important?

Book it on your card and just expense it back to yourself from your business. Fill expense form in and keep receitps. No worries there if it is claimable.

[Joxer]

Depends on where you are going, and how you justify it.

A return flight to Barbados, 7 nights hotel accomodation and a few cocktails at the beach bar cannot be termed as a business development expense.

The scenario I'm talking about is a weekend trip within Western Europe to meet with a potential business contact to discuss a new contracting opportunity.

In a similar manner to the conference I guess a brief itinerary for the trip (e.g. business contacts met, potential future roles discussed etc).

As an aside, would there be any issue with the trip being booked on my personal credit card (as opposed to being paid directly from the business account)?

[GillsMan]

OK, so my accountant got back to me:

The expenses will be allowable if you are satisfied that attendance at the overseas conference is necessary in order to carry out your duties on behalf of the company’s trade.

An itinerary should be kept for the trip showing precisely what activities were involved and the business potentially obtained from the trip.

There is no restriction on whether you travel economy or business.

The hotel stay (& food costs) will be an allowable expense but you should not stay in the country longer than the conference requires albeit an extra night for the day the conference ends.

If the cost is too lavish, HMRC could argue that the trip is a reward for you rather than work related but a business hotel and a business class flight cannot normally be argued to be lavish.

I think the key consideration here is whether attendence at a conference could be argued to be necessary. It's a hard call. I think it probably isn't. I do think it would a great opportunity, both for networking, information, knowledge, experience, etc. But I think it might be difficult to argue that it is necessary.

Hmmmm, one to consider I think. But I'm kind of erring towards being on the safe side and not going.

[GillsMan]

Cool!!

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National Association for Surface Finishing - Sur/Fin 2012 South Point Casino Hotel & Spa 03/10/2012 03/16/2012 600

Annual International Pizza Expo - 2012 Las Vegas Convention Center 03/13/2012 03/15/2012 10,000
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Come on GillsMan pick one and lets get it booked!!!

Haha, Well Brewery Collectibles Club of America sounds like a winner!

Plus, in Las Vegas you're near Area 51, and the only reason I mentioned that is so that i had an excuse to use this smiley.

Good idea from Taxless to create minutes. I've asked my accountant and I'll report back to let you know what he says.

[northernladuk]

Cool!!

CME Science - Stoller: A Comprehensive Tutorial in Musculoskeletal Imaging Using the Stoller Checklist Technique Encore at Wynn Las Vegas 03/08/2012 03/10/2012 300

National Association for Surface Finishing - Sur/Fin 2012 South Point Casino Hotel & Spa 03/10/2012 03/16/2012 600

Annual International Pizza Expo - 2012 Las Vegas Convention Center 03/13/2012 03/15/2012 10,000
Brewery Collectibles Club of America - Western States Beer Show 2012 Palace Station Hotel Casino 03/28/2012 04/01/2012 75

Come on GillsMan pick one and lets get it booked!!!

[Taxless]

The Las Vegas trip sounds like you are keeping up to date so allowable. The travel and reasonable subsistence costs would also be OK. The number of days spent there has to be reasonable in relation to the event and the travel involved, so a day or so either side should be OK, recovering from jet lag etc. If you push it too far and maybe take a spouse (why would you?) then the expense takes on a duality of purpose and you risk HMRC challenging it all.

I have ignored the suggestion that the main reason for going is to gamble as I am sure that this was not a serious comment!

For the proposed Middle East trip this sounds very much like a purely business related expense i.e. trying to drum up more business. In a sense you are advertising yourself and your skills, face to face.

In both cases I would recomemnd some paperwork being kept by the company to detail why it has decided to send the director on the trip.

It may seem a little strange for the company that you control to keep a Board minute of its decision (the Board probably being you) to send you on this trip, but it shows good commercial practice, proper business planning and believe me, if HMRC do ask any questions they do love a piece of paper, properly dated which shows the thought process behind business decisions. This is much more convincing than starting a conversation from scratch with HMRC with no back up.

[northernladuk]

This has got me thinking. Let me give you a specific example, I’ll ask my accountant as well, but I’d be interested in your thoughts.

I work in the LMS and e-learning field and the leading e-learning conference is held annually in Las Vegas. It covers what’s coming up in the world of L&D, e-learning, etc, it’s sponsored by Adobe, Citrix, Articulate, etc and there’s talks by leading industry specialists. Whaddaya reckon? An allowable business expense? I reckon so, it’s 100% related to my business. What about flights, can I fly business class? Is that an allowable expense? If the conference is on one day, how many nights would it be reasonable to stay? Staying for just one night might be a bit unreasonable as it’s a long way away, but then staying for a week is taking the piss I’m sure.

FYI, I clearly want to go there to gamble; the conference is merely an excuse to pay via my business account. But it would be a useful conference in all seriousness.

I did wonder when a poster here says 'business development' what did that really mean. We get some very pie in the sky suggestions here.

The post GillsMan is a perfect example though. A possibly valid question about attending and industry even but also the element of personal gain so an interesting one. I did look in to this last time I went to Vegas but the only conferences on that week were a couple of biology, car parts and old age home care so bummed out

An example I have is I do work with the Middle East. The client has had a change in structure so opportunity to expand current scope and dig for some more work, meet new people, be a face not a number yadda yadda. This is more around sales generation and not directly covered by existing work being paid for so I would say 'Business Development'. Am I right in assuming this is acceptable? My only concern is it isn't actually covered by the existing piece of work. If the existing piece of work finishes it could be argued it is a sales call?

[rd409]

This has got me thinking. Let me give you a specific example, I’ll ask my accountant as well, but I’d be interested in your thoughts.

I work in the LMS and e-learning field and the leading e-learning conference is held annually in Las Vegas. It covers what’s coming up in the world of L&D, e-learning, etc, it’s sponsored by Adobe, Citrix, Articulate, etc and there’s talks by leading industry specialists. Whaddaya reckon? An allowable business expense? I reckon so, it’s 100% related to my business. What about flights, can I fly business class? Is that an allowable expense? If the conference is on one day, how many nights would it be reasonable to stay? Staying for just one night might be a bit unreasonable as it’s a long way away, but then staying for a week is taking the piss I’m sure.

FYI, I clearly want to go there to gamble; the conference is merely an excuse to pay via my business account. But it would be a useful conference in all seriousness.

IANAA. In this case, you would be able to pay for the flight cost, and even the hotel expenses. You may want to find a hotel which gives some play money to their guests? As long as the conference is for 1 day, and you spend not more than few more days, my guess is it should be okay.

When I was a permie, the company used to pay the flight cost plus accomodation and some spending money when an executive went abroad on business tip. This can be termed as something similar.

HTH.

[GillsMan]

This has got me thinking. Let me give you a specific example, I’ll ask my accountant as well, but I’d be interested in your thoughts.

I work in the LMS and e-learning field and the leading e-learning conference is held annually in Las Vegas. It covers what’s coming up in the world of L&D, e-learning, etc, it’s sponsored by Adobe, Citrix, Articulate, etc and there’s talks by leading industry specialists. Whaddaya reckon? An allowable business expense? I reckon so, it’s 100% related to my business. What about flights, can I fly business class? Is that an allowable expense? If the conference is on one day, how many nights would it be reasonable to stay? Staying for just one night might be a bit unreasonable as it’s a long way away, but then staying for a week is taking the piss I’m sure.

FYI, I clearly want to go there to gamble; the conference is merely an excuse to pay via my business account. But it would be a useful conference in all seriousness.

[Taxless]

It is much the same as any other business expense. What exactly do you mean by "business development? If that expense qualifies as being for business purposes then so should the trip.

If it is training then generally anything that keeps you up to date in your field should be OK but if it is to acquire a new skill/knowledge then HMRC usually argue it is creating something new of an enduring benefit to the company and so no CT relief.

[rd409]

Would the cost of an international flight for the purpose of business development be an allowable expense against corporation tax?

Does anyone have any insight on situations where you are aware of Ltd companies claiming for such an expense.

Depends on where you are going, and how you justify it.

A return flight to Barbados, 7 nights hotel accomodation and a few cocktails at the beach bar cannot be termed as a business development expense.

[Joxer]

Would the cost of an international flight for the purpose of business development be an allowable expense against corporation tax?

Does anyone have any insight on situations where you are aware of Ltd companies claiming for such an expense.