Offsite business meetings

[pacontracting]

Yes but are the client company a 1 man band with a wife and no-one else attending or a more complex company with employees and suppliers attending?

HMRC would argue the scenarios are drastically different as you're well aware. This isn't a mystery and acting like it's going to be OK with HMRC is either naive in the extreme or just trolling.

I'm getting the feeling that the 'wife's role in this is being confused? The 'wife' is a co-director, shareholder and fee earner (a professional marketing and PR consultant) and although I'm sure she'd appreciate her 'pumping' ability may or may not win her contracts, that 'skill' would probably have been more applicable in the 'Savile' era.

So let's take an example. I realise this excludes Umbrella workers and contractors whose contracts are more likely than not to be IR35 caught were they to be investigated (i.e. temps pretending to run a business).

So let's take a look at what HMRC have to say.

EIM32015 starts things off.

Section 338 ITEPA 2003 allows a deduction for the full cost of travel for necessary attendance. Where employees use their own vehicle or bicycle for business travel a deduction is given at statutory mileage allowance relief rates and not for actual costs, see EIM31626.

Travel for necessary attendance is journeys that employees make to or from a place they have to attend in the performance of their duties, but not journeys that are ordinary commuting or private travel.

We all know that HMRC have said that the 'home' cannot be a permanent place of work as discussed in EIM32380 and EIM32805

All directors of a Ltd Company have a duty to ensure the company is running according to the articles of association. This duty involves attendance at meetings. In essence, the director is the employer in these scenarios and as such, can decide what needs to happen, when it needs to happen and how it needs to happen.

EIM32153 explains this.

Finally - as to the choice of location: EIM31835 explains this fairly clearly.

This comes back to the original point:

Section 338 ITEPA 2003 allows a deduction for the full cost of travel for necessary attendance.

Travel for necessary attendance is journeys that employees make to or from a place they have to attend in the performance of their duties, but not journeys that are ordinary commuting or private travel.

[LisaContractorUmbrella]

I'm getting the feeling that the 'wife's role in this is being confused? The 'wife' is a co-director, shareholder and fee earner (a professional marketing and PR consultant) and although I'm sure she'd appreciate her 'pumping' ability may or may not win her contracts, that 'skill' would probably have been more applicable in the 'Savile' era.

So let's take an example. I realise this excludes Umbrella workers and contractors whose contracts are more likely than not to be IR35 caught were they to be investigated (i.e. temps pretending to run a business).

So let's take a look at what HMRC have to say.

EIM32015 starts things off.

Section 338 ITEPA 2003 allows a deduction for the full cost of travel for necessary attendance. Where employees use their own vehicle or bicycle for business travel a deduction is given at statutory mileage allowance relief rates and not for actual costs, see EIM31626.

Travel for necessary attendance is journeys that employees make to or from a place they have to attend in the performance of their duties, but not journeys that are ordinary commuting or private travel.

We all know that HMRC have said that the 'home' cannot be a permanent place of work as discussed in EIM32380 and EIM32805

All directors of a Ltd Company have a duty to ensure the company is running according to the articles of association. This duty involves attendance at meetings. In essence, the director is the employer in these scenarios and as such, can decide what needs to happen, when it needs to happen and how it needs to happen.

EIM32153 explains this.

Finally - as to the choice of location: EIM31835 explains this fairly clearly.

This comes back to the original point:

Section 338 ITEPA 2003 allows a deduction for the full cost of travel for necessary attendance.

Travel for necessary attendance is journeys that employees make to or from a place they have to attend in the performance of their duties, but not journeys that are ordinary commuting or private travel.

There's your problem - you don't NEED to go away for the weekend to have a discussion with your wife, business or otherwise, as she is your wife and you live in the same house

[pacontracting]

There's your problem - you don't NEED to go away for the weekend to have a discussion with your wife, business or otherwise, as she is your wife and you live in the same house

I choose to keep my company business (a separate legal entity) and personal life separate. I realise this won't apply to Umbrella employees as they are not company directors and so have significantly less responsibility. A weekend would be overkill though. I'm just talking about an overnight trip.

I'm sure you've read this, but if not, here is a summary of what directors are expected to do over and above that of a non-director employee.

Directors Responsibilities

[LisaContractorUmbrella]

I choose to keep my company business (a separate legal entity) and personal life separate. I realise this won't apply to Umbrella employees as they are not company directors and so have significantly less responsibility.

I'm sure you've read this, but if not, here is a summary of what directors are expected to do over and above that of a non-director employee.

Directors Responsibilities

Ok well go for it then if you think you can justify it to HMRC - as you say you're the Director and it's your responsibility

[GillsMan]

I choose to keep my company business (a separate legal entity) and personal life separate. I realise this won't apply to Umbrella employees as they are not company directors and so have significantly less responsibility. A weekend would be overkill though. I'm just talking about an overnight trip.

Exactly. You did not need to do this.

[philip@wellwoodhoyle]

No one disputes that directors have legal responsibilites and that meetings etc are required in order to properly run a company. I don't think you'd have any argument from HMRC if you held meetings away from your home as you rightly say to separate home from business life.

But the crux is why is it NECESSARY to hold the meetings miles away, why is it NECESSARY to have an overnight stay, why is it NECESSARY to have a decent meal?

You could just as easily rent a meeting room in a local hotel or serviced office for a couple of hours to the same effect.

Don't confuse tax allowability for corporation tax with avoiding a personal benefit in kind tax/nic charge. Your jolly will be allowable for corporation tax. BUT, you'd have a very hard job persuading HMRC that there was no taxable BIK on your personal enjoyment of the jolly - remember that to avoid a BIK, the personal benefit has to be trivial - that's where HMRC will concentrate the argument! There can be no denying that you both have got a reward from your jolly - that's the issue!

[Craig at Nixon Williams]

Every quarter, myself and my wife (the only two directors of the company) go away to a country hotel to discuss strategy. This is minuted and involves conversations like the state of the current contract, analysis of the business plan spreadsheet, discussion of financial documents e.g. profit/loss, balance sheet, future rate discussions, insurance options, website design, prospective clients, future plans etc.

We usually travel about 50 miles away, stay in a hotel, have the meeting, have dinner, stay overnight then come back the next day. We usually charge all of this to the company as a business expense.

Although you seem to have justified the expense to yourself, I do not think that HMRC would see it in the same way if this was ever looked at – especially due to the nature of your relationship with the co-director.

For example, if the co-director was a man, that you were not in any form of personal relationship with, would you still have the meal and the hotel stay?

[pacontracting]

No one disputes that directors have legal responsibilites and that meetings etc are required in order to properly run a company. I don't think you'd have any argument from HMRC if you held meetings away from your home as you rightly say to separate home from business life.

You should read some of the earlier posts! Pigs flying were mentioned

But the crux is why is it NECESSARY to hold the meetings miles away, why is it NECESSARY to have an overnight stay, why is it NECESSARY to have a decent meal?

You could just as easily rent a meeting room in a local hotel or serviced office for a couple of hours to the same effect.

Don't confuse tax allowability for corporation tax with avoiding a personal benefit in kind tax/nic charge. Your jolly will be allowable for corporation tax. BUT, you'd have a very hard job persuading HMRC that there was no taxable BIK on your personal enjoyment of the jolly - remember that to avoid a BIK, the personal benefit has to be trivial - that's where HMRC will concentrate the argument! There can be no denying that you both have got a reward from your jolly - that's the issue!

I think you've hit the nail on the head. At what point does the requirement to attend the meeting (allowable) turn into a reward (not-allowable).

[JRCT]

I choose to keep my company business (a separate legal entity) and personal life separate. I realise this won't apply to Umbrella employees as they are not company directors and so have significantly less responsibility. A weekend would be overkill though. I'm just talking about an overnight trip.

I'm sure you've read this, but if not, here is a summary of what directors are expected to do over and above that of a non-director employee.

Directors Responsibilities

A typical Saturday morning at Mr & Mrs Pacontracting's house.

pac "Good morning dear. Would you like a coffee?"
Mrs pac "Yes, dear. Thanks"
pac "It's a lovely day. We should go for a walk"
Mrs pac "You've got a letter from HMRC"
pac "DON'T OPEN IT IN THE HOUSE!"
Mrs pac "Why not?"
pac "I choose to keep my company business and private life separate. Cancel the walk. We'd better book a hotel in (town 50 miles away) so I can read it".

[Craig@Clarity]

Tarbera...tut tit..I mean tut tut...damn autocorrect!!!