How much of business trip can be claimed as tax deductible for self-employed?

webdev123456

I'm a self-employed sole trader, and run a sporting website as my sole source of income. Business is great in the UK, and I'd like to make it great in the USA as well.

By far the best/easiest way of achieving this would be for me to take a trip to the US where I could meet event organisers and competitors face-to-face.

I've no idea if this is something I could even begin to put as a tax-deductible expense though. The intended purpose of the trip is very definitely work, but of course it's going to feel like a holiday as well.

What's HMRC's viewpoint on such things?

00ec25

the overseas trip has to be demonstrably wholly and exclusively work related (as a self employed person rather than as a company employee the 3rd condition - necessarily - does not apply)

if you can do that then 100% of the cost is claimable. If you can't, 0% is claimable.

So you go for the period of time exclusively needed to do your stated itinerary and (the important bit if you are ever inspected by HMRC) you support your claim with retained evidence of:
- convention dates, attendance at, and relevance thereof
- documented meetings dates and notes thereof
- list of people expecting to meet you and how you pre arranged that ( emails, phone calls etc)
- taxi receipts or hire car mileage log showing where you went when in the USA

You don't add a week on at the start or end and go on holiday whilst over there. You have a business trip whose start and end are as short as possible because then it shows you behaved like someone sent on a business trip who would rather be at home instead, not gallivanting around the USA at company expense.

Obviously an incidental personal element would be allowed, but that must remain incidental, so if your stay covers a weekend where you have no business meetings then the hotel cost could be claimed since it would be reasonable to remain in t eh USA if you have a Monday meeting, but no daytime costs can be claimed as they would be personal expenditure which you would have incurred anyway were you back in the UK - your weekend eating is not a business expense even if you are forced to do so at restaurant prices because you are away from home

webdev123456

These sporting events happen only at weekends, and it'd be churlish to go out for just one. So if I was to travel for 16 days encompassing 3 events, one each weekend at a different geographic location, and holed up working in a hotel room on the days inbetween, would that be ok?

Pennywise

webdev123456 wrote: »

These sporting events happen only at weekends, and it'd be churlish to go out for just one. So if I was to travel for 16 days encompassing 3 events, one each weekend at a different geographic location, and holed up working in a hotel room on the days inbetween, would that be ok?

Yes, as long as you could prove to HMRC (if challenged) that you were indeed working in between events and could prove that you weren't sight-seeing and attending non work related events etc.

Your credit/debit card statements could be useful as they'd show where you were each day by virtue of your fuel/meal spending (If you're wanting to prove you didn't leave the hotel area, then make sure you buy your lunch at the local MaccyD and pay by card to leave your footprint! as opposed to paying by cash which provides no proof!). Your email system would presumably show that you were sending emails each day and hopefully you'd have email conversations with people you met or are hoping to meet at each event. Using the hotel's business facilities, i.e. printers etc would also leave a "footprint", i.e. the bills they charged you for using their services.

It's all a matter of having proof that you were working AND proof that you weren't having a jolly - i.e. no "gaps" where there is no footprint of what you were doing and where.

And the best proof of all - sales made to new customers/markets after the events to demonstrate the usefulness of the trip to HMRC!

It's all about drawing the picture, before, during and after! Before, you need to be buying the entry tickets to the events, arranging appointments with prospects, etc. During, you need to have proof you're working and not sight-seeing. After you need follow up emails, sales etc. The more "proof" you have, the easier it would be to shoot down any HMRC challenge.

webdev123456

OK, one last question, and one I feel I sadly know the answer to. I'm very happy to do all of the above, I've no interest in sight-seeing or anything like that...

...but I would like to partake in the sporting events, if possible. I will admit that this is something I'd enjoy greatly, but I feel I can definitely argue that it's easier to build up a camaraderie with the competitors if they're my fellow competitors. Likewise any photographers I chat to while I'm out there are more likely to be interested in what I have to offer if I'm a participant than just someone spending all day on the sidelines.

But make no mistake, in my eyes this does make it a bit of a jolly, even though the main purpose of the visit is to drum up business and I think this would help in that aim.

How would HMRC view it, do you think?

webdev123456

I should note that the nature of the sport is such that my participation would only take up a small portion of the day, and then I'd be chatting to everyone else while other participants were having their turn to compete.