The business world is getting smaller and even the most modest of organisations can benefit from seeking new opportunities away from British shores. Advances in communications allow much of the negotiations to take place remotely online but sometimes there’s no substitute for a face-to-face meeting to seal a deal or resolve an issue. But can you claim back all those travel costs incurred in the same way as your UK expenses?
You’ll be pleased to hear that the short answer is ‘yes’, you claim for overseas travel expenses in the same way as you claim for them in the UK.
‘Wholly and exclusively’
This is the key phrase to remember when claiming travel expenses – they must be ‘wholly and exclusively’ for business purposes – wherever in the world you visited. So keep your receipts for your purchases just as you would in the UK and if an invoice or receipt has personal spending on it, you can’t claim it back.
Be mindful of the exchange rate when you claim back expenses. The easiest amount to claim is the one that shows in your bank account, even if that’s not quite what you actually paid, it will make your records easier to manage.
Mixing business with pleasure
Many people like to add a few days of leisure or holiday time onto their business trip and sometimes invite their spouse to join them. It’s still OK to claim for all the business elements but you can’t claim for the extra holiday part of the trip. For instance, you could claim for the outbound and inbound flights but not extra leisure travel or hotel costs for the extended period, and obviously, you can’t claim for your spouse’s travel costs, unless they are an active director or employee of your company involved in the business being transacted overseas. It’s good practice to keep records of meetings to prove the business nature of the trip.
Unfortunately, you can’t turn a holiday into a business trip and claim the expenses because the primary purpose of the trip is personal. Even if you spot an opportunity to do some business while on holiday, you can’t change the purpose of your trip and can’t claim any costs incurred while doing business on your holiday, other than any marginal costs directly attributed to the business meeting such as additional travel costs.
Certain office electronic equipment is sold at advantageous prices abroad so you might want to buy a new laptop or camera for your business. As long as you pay the correct local taxes when you leave, such as sales tax, you can often reclaim this via HMRC (not via your VAT return for non-UK VAT, but through the VAT online services portal – and pay any applicable UK VAT when you get back or on your VAT return at a later date.
If you are unsure of what can be claimed from your trips abroad, contact CRM on 01865 379272 for expert advice.