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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4932
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have a UK HMRC subsistence question. If an employee goes

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HiI have a UK HMRC subsistence question.If an employee goes to New York on a two day business trip and spends $1,000 on 2 nights accommodation, spends $400 on food and drinks during the 2 days and the company then reimburse him the cost of $1,400 on his return is there any tax implications for this?Thanks
James
Submitted: 7 months ago.
Category: Tax
Expert:  taxadvisor.uk replied 7 months ago.

Hello and welcome to JustAnswer. I am here to help you. I am reviewing your question and will respond to you shortly.

Expert:  taxadvisor.uk replied 7 months ago.

Thank you for your question.

If the employer reports this reimbursement to you as a benefit in kind on P11d the you can claim the cost as a business expense when completing your tax return. If you don't complete a tax return then you can claim these as employment expenses by completing P87 form.

More information on this can be found here

https://www.gov.uk/government/publications/income-tax-tax-relief-for-expenses-of-employment-p87

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 7 months ago.
HiI have reported these two expenses as allowable expenses on the LLP tax return. I have reimbursed the employee for the cost and as such was not included on the P11D form.
Is this the correct process?Thanks
James
Customer: replied 7 months ago.
I am looking at this from the LLP perspective)
Expert:  taxadvisor.uk replied 7 months ago.

Thaank you for your reply.

Ideally, you should apply for dispensation from reporting payments that are no more than reimbusement of legitimate business expenses.

Otherwise they should be reported on P11d and then the employee would claim it against earnings as a business expense.

You would still account for it as allowable expenses on the LLP tax return.

If this is one off payment, I suggest you write to your Tax Office and apply for dispensation.

More information on P11d reporting can be found here

https://www.p11dorganiser.co.uk/p11d-guide/section-n-expenses-payments-made-to-or-on-behalf-of-the-employee

I hope this is helpful and answers your question.

Customer: replied 7 months ago.
Thanks, ***** am dealing with the 2015/16 tax year I can't get any dispensation retrospectively so are you able to confirm that the current process of employee goes on business trip, LLP refunds him the cost and that cost is tax allowable expense on the LLP tax return is acceptable for HMRC?Thanks
James
Expert:  taxadvisor.uk replied 7 months ago.

Thanks for your reply.

A practical advice is you write to HMRC and explain the situation in detail. The fact this payment was purely reimbursement of business expenses and that there was no benefit to the employee, HMRC would likely accept your explanation as there is no loss to Inland Revenue.

At the same time apply for dispensation for current year and future years.

The cost in LLP books is a tax allowable expense for HMRC tax return purposes.

I hope this is helpful and answers your question.

If you are happy and there are no more issues I will appreciate if you would kindly rate/acceptthe service I provided to ensure I get credited for it by Just Answer.

Expert:  taxadvisor.uk replied 7 months ago.

Hi James

Just checking if you need further clarification on supplementary question raised by you.

If you are happy and there are no more issues I will appreciate if you would kindly rate/accept the service I provided to ensure I get credited for it by Just Answer.

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4932
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
taxadvisor.uk and 2 other Tax Specialists are ready to help you
Customer: replied 7 months ago.
HiI liked to use the call option. I'll send my number and let me know when you are available.Thanks
James
Expert:  taxadvisor.uk replied 7 months ago.

Thank you for accepting my answer.

Best wishes

Customer: replied 7 months ago.
sorry one last point i forgot.
if as you say the worldwide subsitance rates are for all firms to use and means your dont need reciepts for that amount.
i.e $100 for food and drink. without dispensation agreed with HMRC that $100 should be included on the employees P11D?Thanks
james
Expert:  taxadvisor.uk replied 7 months ago.

Thank you for your reply.

As it is a wholly business expense and no benefit to the employee then it should not be included on employees P11d

Many thanks

Customer: replied 7 months ago.
whats the point of getting the dispensation on meals while travelling...... i thought the point of it was that you didnt need to then report it on the P11D?

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