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TonyTax
TonyTax, Tax Consultant
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Is there a tax allowance when working on a secondment

Customer Question

Is there a tax allowance when working on a secondment overseas for a British employer?
I worked for four months (March - July 2015 & March - July 2016) during the last two years in China. During this time I was paid by my UK employer.
Two colleagues told me separately from each other that there is a daily rate when working abroad on secondment.
Submitted: 9 months ago.
Category: Tax
Expert:  TonyTax replied 9 months ago.

Hi.

Take a look here and here for information on expenses that can be reimbursed to an employee tax free whilst working abroad for a UK employer.

I hope this helps but let me know if you have any further questions.

Customer: replied 9 months ago.
Hi,Thank you for the links. However, when I look at the links it seems that these are suggested subsistence and accommodation rates for employers. How does this link to me as employee?
Whilst accommodation was paid, subsistence was not paid by my employer.Best wishes,
Chris
Expert:  TonyTax replied 9 months ago.

If you didn't receive a subsistence allowance, then you can make a claim using a maximum of the lunch, dinner (not if dinner was part of the accommodation costs paid by your employer), drinks and hotel to office rates. You should limit your claim to the lower of what you actually spent and the maximum rates and you may be asked by HMRC to provide receipts.

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15882
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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Customer: replied 9 months ago.
Hello,
I called HMRC to put your advice into action and they told me that it is not possible.
They referred to the documents which you sent earlier and told me that these state that it is only possible to claim, if the employer has covered the expenses.
Could you please let me know how I can reply to back up the advice that you gave me?
Expert:  TonyTax replied 9 months ago.

Did the accommodation costs cover the provision of any meals?

Expert:  TonyTax replied 9 months ago.

Can you tell me where you stayed when you were in China, in a hotel or an apartment or house rented by your employer? How far from your accommodation was the place you worked?

Customer: replied 9 months ago.
The accommodation was covered by the employer. It was a flat without any meals included, i.e. all meals were covered by myself. Unfortunately, I do not have receipts for the meals, as it is not very common in Chinese restaurants.
The flat was directly next to the place of work so no commute was required.
Expert:  TonyTax replied 9 months ago.

Without receipts you won't get a deduction at all I'm afraid.

Customer: replied 9 months ago.
Ok let's assume I have the receipts: Could you please tell me on what you are basing your initial advice?
The HMRC claims that it is not true and I am left wondering what the situation is.
Expert:  TonyTax replied 9 months ago.

It's highly unusual for an employer not to pay an allowance for subsistence to an employee or to reimburse an employee for subsistence costs whilst working abroad. Therefore, the HMRC rules when strictly applied don't allow for a claim to relief subsistence to be made by an employee who is not reimbursed for such costs by their employer. The HMRC view is that if no reimbursement is made, subsistence expenditure is not necessary. Subsistence does not cover buying food which is consumed in a company provided flat, though that would probably be covered if the costs were reimbursed by the employer. It normally covers travel subsisitence costs. If an employee was sent abroad for a longer period, say a year or two or longer, they would be unlikely to be reimbursed for subsistence by their employer as they would effectively be living abroad and probably close to their work. The subsistence allowance is really aimed at those working a considerable distance from home.

Having said all that, I have seen HMRC allow subsistence claims using receipts where they have not been reimbursed but I have no case law to back that up. It may be that the claims got through because the box on the Sa102 employment pages (17) of the tax return for such claims covers travel and subsistence.

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