Business travel expenses, wherever you are in the world, can be claimed as long as they meet the HMRC rule of being “wholly and exclusively” (and for employees/directors, also “necessarily”) for business purposes and there is no personal benefit in the cost. As always, remember to keep your receipts/invoices and if you are unsure of which exchange rate to use, take the amount from your bank/credit card statement to keep things simple.
If you purchase a business asset whilst on your travels abroad, you may be able to reclaim the sales tax. You’ll need to declare the asset when you return to the UK and pay any applicable VAT, but if you’re standard VAT registered you can reclaim that on your next VAT return. For overseas VAT on travel costs such as hotels, food etc. and other services, there is the possibility to claim this back, but not through your UK VAT return.
See //www.gov.uk/guidance/vat-refunds-for-uk-businesses-buying-from-other-eu-countries for more details.
Car hire in the UK or abroad, specifically for business purposes, is an allowable expense and the hire costs and fuel can be claimed.
Transport costs for business-related journeys are allowable including additional costs such as excess baggage claims as long as there is no personal element. Other expenses that can be claimed include toll roads, bus and taxi fares and car-parking tickets.
Claiming the cost of your hotel or longer-term accommodation whilst on a business related travel is allowable. Whilst staying overnight on a business trip or for work-related training, you are entitled to claim an incidental overnight expenses allowance set by HMRC to allow for additional costs which are classified as personal expenses and aren’t otherwise allowable.
HMRC Overnight Expenses Allowance rates are £5 per night in the UK and £10 per night overseas (including Eire) and no receipts need to be produced to claim this.
If you are staying overnight on a business trip, meals are an allowable expenses as long as they have been purchased after the journey commenced. The levels of costs that are generally acceptable to HMRC are as follows and claims need to be supported with a valid receipt:
If away from home for more than 5 hours, 1 meal can be claimed
If away from home for more than 10 hours, 2 meals can be claimed
If away from home overnight, no more than 3 meals can be claimed and includes any meals included in the cost of the overnight accommodation
HMRC accepts that reasonable costs of alcoholic beverages with a meal may be claimed. Where you have dined with work associates, only the proportion of the total cost that pertains to you as the director is allowable unless the purpose of the meal is business entertaining. Appropriate identification and explanation of the receipts must be provided in English when submitted in relation to meals overseas.
If you have any questions on any of the above, or are unsure whether you can claim a cost or not, please give us a call on 01865 379272 and we’ll be happy to assist you.