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Claiming expenses while travelling abroad

Claiming expenses while travelling abroad

Modern communications and the internet have made it easier than ever for smaller firms to establish business connections and win clients based in other countries. Thankfully, the same technology has to some extent reduced the need for business trips.

Why travel for a face-to-face meeting when it can be done using video-conferencing software?

However, internet communication can be a little impersonal and there will still be times when your employees are required to travel to finalise contracts and meet with clients. For things like attending conferences, travel is unavoidable and being there in person is likely to be sustainably more beneficial.

For employers with important overseas connections it is essential for employers and employees alike to understand the rules governing expenses and foreign travel.

Expenses and foreign travel

HMRC’s rules for travel and subsistence expenses claimed overseas are not dissimilar to expenses claimed in the UK.

Costs must be ‘wholly and exclusively’ for business purposes in order for them to be claimed as allowable expenses.

Money spent on flights and public transport counts as an allowable expense as long as it is necessary to carry out your business purposes. Employees wanting to extend their stay by a few days to do some sightseeing will find that their return flight no longer counts as an allowable expense.

Taking a taxi to the Colosseum in between meetings will likewise not be reimbursed.

HMRC has published a list of average subsistence rates everywhere in the world, useful both for pre-trip preparations and if an employee loses their receipts.

Tax relief

Employees working abroad may claim tax relief on travel expenses reimbursed by their employer on the following conditions:

·         It is necessary for the employee to be abroad in order for them to carry out their business duties

·         The employee’s role requires them to be overseas for more than 60 days in a year.

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We’re specialists in payroll administration and can handle everything from employee benefits and expenses, to workplace pensions and IR35.

Fill out our contact form, send us an email to geoffk@knightandcompany.co.uk or give us a call on 01628 631 056 for assistance.