Claiming accomodation

[ASB]

I've just spoken to my accountants and they inform me these are not allowed unless special dispensation is agreed with HMRC

ASB - do you have any further advice on this one? are the accountants missing something and it is indeed permissible? Any ideas how / who I'd go about asking at HMRC. Would I really need to tell them the true nature of my accommodation arrangements here?

The 73 Euro a day + breakfast (although I don't eat breakfast!) is still better than the measly £10 I'm claiming now.

Thanks

I wouldn't like to disagree with your accountant, he knows your situation better than I (I hope). However I think he might be confused. Certainly within the UK you cannot choose to use scale rates. You need to agree them and it only generally applies to large companies with a number of employees travelling (sampling is required). However with overseas claims I would point you back to the links I posted. In particular:-

http://www.hmrc.gov.uk/manuals/eimanual/EIM05250.htm

Subsistence expenses are a common example of expenses which employers choose to reimburse by means of a scale rate payment (see EIM05200). EIM05210 contains guidance about the evidence HMRC may require in support of a dispensation request for scale rate subsistence payments to employees travelling within the UK. The sampling technique described in that guidance is not usually appropriate for employees who travel outside the UK, because most employers will not have enough internationally mobile employees to enable them to undertake a meaningful sampling exercise.

HMRC has therefore agreed that employers may use the benchmark rates published by the Foreign and Commonwealth Office 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. The rates can be found in the HMRC internet library, Employment Income scale rates. Accommodation and subsistence payments at or below the published rates will not be liable for income tax or National Insurance Contributions for employees who travel abroad
------------------

The first bold bit relates to the position within the UK - i.e. it is as Lisa said. The second bit relates to overseas. Note it does not mention a dispensation being required. [Their opinion is related to the sampling required being impractical, thus representative sampling of all employers is adequeate, hence the FCO rates benchmark]. In any event a dispensation makes not difference to the eventual treatment, but that's a different issue.

Somewhere within the HMRC guidance - but I cannot find it - there was some guidance that said ANY employer could use the scale rates without a dispensation to do so.

In your position I would be inclined to ask HMIT for an opinion, quoting the guidance as published to see if you can use the scale rates and which parts are claimable.

Decksters point is also valid. HMIT can be more generous than expected when it coumes to overseas expenses - provided your are still tax resident in the UK. Of course it is also entirely possible to be tax resident in more than one place at any given point.

[Olly]

thanks for reply.

bugger - could have been a nice little earner that one....
what are your thoughts on the 73 euro a day instead of £10?

[deckster]

Don't forget 'wholly, necessarily and exclusively'. Are you maintaining a residence in the UK? Are you staying over at weekends? Do you have friends over for a jolly? Do you let other people stay there when you're not around?

Any of the above could be used to HMRC to claim that it wasn't a wholly business expense. You'd almost certainly be OK anyway (I did all of the above when working long-term in Amsterdam 10 years back ) but it pays to be aware of the minutae.

[LisaContractorUmbrella]

Scale rates can be applied for from HMR&C but in order to obtain them you would need to be able to prove the the sums applied for are realistic and reflective of the costs that are being incurred. You would need to be able to supply receipts which cover a fixed period (determined by HMR&C) for the expenditure in question before the scale rate would be granted. Although you would not need to provide receipts from then on (subject to HMR&C review) you would still need to incur a cost - the rules regarding legitimate expenses still apply.

[Olly]

You don't need a receipt to claim it. But you will need to satisfy the HMRC that the expenditure was incurred A receipt is simply an easy way to do that, but any sort of paper trail can keep them happy.

In any event this may not be the best way of dealing with it. Consider the IR allowed scale rates (this is differen from a dispensation).

Some links:-
http://www.hmrc.gov.uk/manuals/eimanual/EIM05260.htm
http://www.hmrc.gov.uk/manuals/eimanual/EIM05280.htm
http://www.hmrc.gov.uk/employers/wwsr-oct08.pdf

These do NOT need receipts but differing rates are payable depending upon where you are and how you stay.

I've just spoken to my accountants and they inform me these are not allowed unless special dispensation is agreed with HMRC

ASB - do you have any further advice on this one? are the accountants missing something and it is indeed permissible? Any ideas how / who I'd go about asking at HMRC. Would I really need to tell them the true nature of my accommodation arrangements here?

The 73 Euro a day + breakfast (although I don't eat breakfast!) is still better than the measly £10 I'm claiming now.

Thanks

[ASB]

So right now I work in Munich and rent a room here for €600 a month.
I was intending to claim that back, my lunchtime meals and £10 a night allowance for 5 nights Sunday to Thursday.

From what I've just read on HMRC site, that £10 a night remains unaffected but instead of €700ish a month in receipted expenses I could instead claim €209 http://www.hmrc.gov.uk/employers/wwsr-oct08.pdf for each 24 hour period = €4180 a month!

Er...21% of the difference is extra €730 company profit each month and allows me to withdraw €3480 a month as expenses (that I didn't incur at that rate) and not pay income tax on it?

This is surely too amazingly good to be true isn't it?

Read all the guidance. See how you apply your situation to it. Speak to your accountant and ask HMRC for thier opinion.

I don't know whether you can claim the full 209 euro - because you have chosen to rent a room. However I think you can probably claim the residual rate of 73 per day + breakfast and the 600 per month you spend on rent. You might be able to charge the full 209 though.

As I say it depends on your exact circumstances and I would get the opinion of HMRC before you do so.

fwiw myco always paid scale rather that were lower than the IR rates and the inspector didn't bat an eyelid (or at least not about that ).

[Olly]

Woww!!!

So right now I work in Munich and rent a room here for €600 a month.
I was intending to claim that back, my lunchtime meals and £10 a night allowance for 5 nights Sunday to Thursday.

From what I've just read on HMRC site, that £10 a night remains unaffected but instead of €700ish a month in receipted expenses I could instead claim €209 http://www.hmrc.gov.uk/employers/wwsr-oct08.pdf for each 24 hour period = €4180 a month!

Er...21% of the difference is extra €730 company profit each month and allows me to withdraw €3480 a month as expenses (that I didn't incur at that rate) and not pay income tax on it?

This is surely too amazingly good to be true isn't it?

[ASB]

You don't need a receipt to claim it. But you will need to satisfy the HMRC that the expenditure was incurred A receipt is simply an easy way to do that, but any sort of paper trail can keep them happy.

In any event this may not be the best way of dealing with it. Consider the IR allowed scale rates (this is differen from a dispensation).

Some links:-
http://www.hmrc.gov.uk/manuals/eimanual/EIM05260.htm
http://www.hmrc.gov.uk/manuals/eimanual/EIM05280.htm
http://www.hmrc.gov.uk/employers/wwsr-oct08.pdf

These do NOT need receipts but differing rates are payable depending upon where you are and how you stay.

[tim123]

But still not as good as paying 50% of the rent AND getting a further 30% off the tacman though is it !!

Obvioulsy not, but getting a receipt for a flat share is outside of his control, isn't it

tim

[Billy Pilgrim]

This is for you to decide, but ISTM (in financial terms) paying 50% of the rent and not claiming it, is better for your pocket than paying 100% of the rent and getting 30% off from the Tax man.

Don't let the tax tail wag the dog (as my accountant once said).

tim

But still not as good as paying 50% of the rent AND getting a further 30% off the tacman though is it !!

When I stayed in rented accomodation (no contract, was a friends place) I set up a monthly direct debit from my business account to pay for it

Hope this helps

[tim123]

Hi boys and girls,

I'm working in Italy for the next 3 months, and looking at accomodation.

I don't want to live in a hotel for that long, so am considering flatshares.

How do I go about claiming this back? Alot of the flatshares I find are just people with spare rooms, so no contracts etc... Do I need the contract to be in my LTDs name, and therefore need a contract???

In that case I'm better off with a "proper" flat with a contract or a hotel yea?

Ta!

This is for you to decide, but ISTM (in financial terms) paying 50% of the rent and not claiming it, is better for your pocket than paying 100% of the rent and getting 30% off from the Tax man.

Don't let the tax tail wag the dog (as my accountant once said).

tim

[Svalbaard]

Italy eh? Not sure about the financials but if you find the name "Amanda Knox" anywhere on the lease I'd suggest getting the hell outta' Dodge.

[Mehmeh]

Hi boys and girls,

I'm working in Italy for the next 3 months, and looking at accomodation.

I don't want to live in a hotel for that long, so am considering flatshares.

How do I go about claiming this back? Alot of the flatshares I find are just people with spare rooms, so no contracts etc... Do I need the contract to be in my LTDs name, and therefore need a contract???

In that case I'm better off with a "proper" flat with a contract or a hotel yea?

Ta!