Subsistence Allowance question Subsistence Allowance question
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  1. #1

    Default Subsistence Allowance question

    Hi Folks,

    Sorry if this has been asked before but new to the whole contracting business, I have a UK LLC that I use to invoice my client at the end of every month for the IT work I do.

    The client is a UK based and registered company but all the work I carry out for the client takes place in Europe, (currently working a 6 on 3 off rotation) the client pre-pays for our accommodation in Europe so we don't pay for that, we do pay for our own food when we are away though, however…..as per the contract, they pay X day rate and then £36 a day subsistence allowance on top.

    One the blokes I work with, his missus is his accountant, she said to me that we put the £36 a day (which is £1080 a month) through as an expense and that way it's not taxed, is this correct ?? as I spoke to another accountant who said no, if you spend £500 that month on food then £500 is an expense and the other £580 is taxable but he didn't really seem interested in talking to me tbh and just wanted to get off the phone.

    This blokes missus also said you don't need receipts for subsistence allowance and referred to something about different countries having different allowances, Is that also true? I apologise if this is obvious but I haven't a clue

    Thanks for the help.

  2. #2

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  3. #3

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    Default Subsistence Allowance question

    His missus does the books, is different to his missus is an accountant.
    She’s the former.


    You can’t claim tax back on something you’ve not actually incurred a cost for.
    There are simple rules. You should read the links to the right...
    See You Next Tuesday

  4. #4

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    Quote Originally Posted by Lance View Post
    His missus does the books, is different to his missus is an accountant.
    She’s the former.


    You can’t claim tax back on something you’ve not actually incurred a cost for.
    There are simple rules. You should read the links to the right...
    She is a chartered accountant apparently according to her email signature and linkdin profile hence why I was confused by what she said and what other accountants have told me, she did send me this quote when I asked her if what she told me was correct but still wanted to hear from anyone who may have been through this before.

    "In HMRC’s words:

    “From 6 April 2019, employers will no longer be required to operate a system for checking an employee’s expenditure in order to make payments free of tax in relation to expenses paid or reimbursed using benchmark scale rates. Instead, employers will only be required to ensure that employees are undertaking qualifying travel on occasions in respect of which a payment is made or reimbursed and that neither the employer nor any other person knows or suspects or could reasonably be expected to know or suspect, that travel was not undertaken.”

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    Default

    Quote Originally Posted by Lance View Post
    His missus does the books, is different to his missus is an accountant.
    She’s the former.


    You can’t claim tax back on something you’ve not actually incurred a cost for.
    There are simple rules. You should read the links to the right...
    I do find it funny how many people continue to post rubbish after the actual details from hmrc have been posted - which are now very clear.

    And the instructions are very clear you need some receipts to prove the person has been there but you don't need all of them so if some are lost or even "lost" provided it's just the scale allowance it doesn't matter.
    merely at clientco for the entertainment

  6. #6

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    Quote Originally Posted by eek View Post
    I do find it funny how many people continue to post rubbish after the actual details from hmrc have been posted - which are now very clear.

    And the instructions are very clear you need some receipts to prove the person has been there but you don't need all of them so if some are lost or even "lost" provided it's just the scale allowance it doesn't matter.
    Thanks

  7. #7

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    Quote Originally Posted by eek View Post
    I do find it funny how many people continue to post rubbish after the actual details from hmrc have been posted - which are now very clear.

    And the instructions are very clear you need some receipts to prove the person has been there but you don't need all of them so if some are lost or even "lost" provided it's just the scale allowance it doesn't matter.
    Surprised no one has mentioned he should in fact be paying the tax in the country he is working not UK tax


    Sent from my iPhone using Contractor UK Forum

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    Quote Originally Posted by GhostofTarbera View Post
    Surprised no one has mentioned he should in fact be paying the tax in the country he is working not UK tax


    Sent from my iPhone using Contractor UK Forum
    That was not the question that was asked and while that was also my immediate thought (and why I've never taken up any of the offers I've received) there isn't enough details to say if that is actually the case or that an overseas company is involved in the work.

    And I've seen enough oil people on the Schiphol - teesside flights to know it's not worth worrying about it.
    merely at clientco for the entertainment

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    Default

    Quote Originally Posted by eek View Post
    I do find it funny how many people continue to post rubbish after the actual details from hmrc have been posted - which are now very clear.

    And the instructions are very clear you need some receipts to prove the person has been there but you don't need all of them so if some are lost or even "lost" provided it's just the scale allowance it doesn't matter.
    OK. OK. I'll take that on the chin.

    I should have read your link.
    I should not have assumed that my outdated understanding was still correct.
    I should not post answers when drunk.
    See You Next Tuesday

  10. #10

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    Quote Originally Posted by eek View Post
    Handy! I've bookmarked that. Don't tend to travel for business overseas but, one day, Rodders...

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