Tax relief on overseas travel, subsistence & accommodation?

Simran

Can someone help on a question regarding foreign travel, subsistence and accommodation? I know someone who has a contract to work for a company in Switzerland for a year. This is not a secondment from the UK but a local contract.

The individual is paying for flights, subsistence and accommodation to and from Switzerland out of their own pocket and not getting the costs reimbursed by their client/employer.

I know that they will continue to be UK resident and taxable in the UK on the Swiss earnings and will have to claim unilateral relief for any Swiss taxes.

However, will they be able to claim tax UK relief for travel, subsistence and accommodation costs regarding their local Swiss contract? These costs are going to be quite huge but HMRC booklet IR 490 (para 7.4) indicates that they can claim tax relief but only if the cost is included in the employee’s earnings, e.g. where the cost is borne or reimbursed by, or on behalf of their employer, but in this case they are meeting the costs themselves?

fengirl_2

Your friend is trying to claim travel to and from work, which is not allowable for UK tax purposes, whoever pays it.

Pennywise

Is this employment, i.e. a new job in Switzerland or is the individual concerned either self employed or a director of his/her own limited company - if the latter, it is indeed possible that the costs can be claimed, but if the former, then almost certainly not.

Simran

Thanks - my comments:

Fengirl: the HMRC booklet IR 490 para 7.4 says that you can claim for ordinary commuting under special rules for foreign travel if you are still resident in the UK, but seems to say this is only possible if the cost is met by/reimbursed by your employer (but in this case they have met the cost themselves)

Pennywise: they say they will be working overseas as a contractor through a Swiss based contract organisation who will pay all required Swiss taxes and insurances?