Paying for Business Trip on Company Account

Tadman2

Hey Everyone,

I started my company at the end of last year, all going well (yay)

I run a management consultancy, offering advice and help mainly around training and development for medium sized companies. I am the sole employee of my company. I work from home and visit clients etc all around the UK.

I have recently taken on a client in Dubai and have realised that the marketplace is bouyant for my type of work, therefore I would like to go on a 'fact finding' trip to meet with potential clients. The trip would be for a max of 10-14 days.

I plan to work as normal during my time there and can do it all from my laptop virtually for my clients here in the UK.

I'm trying to understand the rules around paying for this trip from the company account... I'd like to pay for the flights, my visa and my transfers on the company account.

I'm staying with some friends so there will be no accommodation costs, and all food costs etc, I will pay for on my personal account.

Would the flights, visa and transfer etc all be ok to be paid through as an expense on my business account ?

Sorry if it's a stupid question!

Pennywise

Tadman2 wrote: »

I'm staying with some friends

The moment there is any "duality of purpose", i.e. motivation for the "business" trip not being wholly for business, you risk losing the ability to reclaim the costs through your company. To be allowable, you need to be able to provide evidence, if HMRC challenges it, of all the business meetings you had whilst there, email exchanges to arrange meetings, emails/reports following meetings, etc. Basically, if you're going for a holiday and hope to do a bit of networking whilst there, you'd have pretty small chance of HMRC accepting it as a business trip. You need to have evidence that the "holiday" element is trivial and that most of the time was business meetings, as opposed to trying to claim a holiday through the business by meeting a couple of people whilst spending the rest of the time enjoying yourself.

00ec25

for the director of the company to undertake a business development trip to explore a new market would be an allowable expense provided the costs were reasonable
- flight: yes 100% claimable
- visa: yes your purpose in visiting the country that requires a visa is 100% business related (note you cannot claim the cost of a passport itself as that has duality of purpose)
- accommodation in country: yes, but for how long? The answer to that question will be what evidence can you produce showing what you did each day in country. You say you can do normal work, can you evidence attendance at "events" that are relevant to developing the business?
- you are in country for business purposes so all subsistence would be a normal (and expected) business expense

do remember that any hospitality you provide to anyone will be classed as business entertainment and so will be disallowed against corporation tax. The company can pay the bill, no problem, but it can't get CT relief

the company could pay your friends for staying with them provided your friends are willing to provide an adequate paper trail of the actual payment taking place and them billing you for an agreed cost

the key issue with all of the above is can you show that the costs meet the wholly and exclusively business related test? If you can't then there is duality of purpose (ie non business private element) and the cost is disallowed in full.

EDIT beaten to it by Pennywise

Tadman2

Thanks for your replies, lots of info for me to look into.