Mixing business and pleasure
Discussion
I often travel to attend conferences, to do training and to meet prospective clients.
I wondered where the line is between business and pleasure for tax purposes. For example, if I go to a conference which requires me to sat 2 nights in a city, but then I stay on for the weekend with my wife joining me, does that mean the whole trip is disqualified or just the nights qwhen it isn't clearly business? Would it still be OK to claim the travel there and back which was required anyway for business? I obviously pay the extra hotel nights myself.
We recently did this and treated the extra nights as our annual staff 'party' which I was fairly comfortable with but would HMRC aportion costs or say any trip with a pleasure element had no business purpose? I am eyeing up a conference in NZ for 2007!
Eric Mc said:
Any costs that were not incurred "wholly, exclusively and necessarily" for the purpose of undertaking your employment duties" CANNOT be claimed.
At the very least, those expenses which have a dual nature should be apportioned in a fair and reasonable manner.
At the very least, those expenses which have a dual nature should be apportioned in a fair and reasonable manner.
I guess therefore that if I spend 4 nights away, 2 of which were at a conference and 2 were for pleasure I should apportion the travel costs 50/50%.
Eric Mc said:
Yes, AND omit any element of the costs NOT relating to you, such as partners, wives, girlfriends etc etc etc.
I am assuming you are looking at this from the point of view of an "employee"?
I am assuming you are looking at this from the point of view of an "employee"?
Both employee and employer, except my wife is a co-director and does come to occasional meetings and conferences for networking purposes.
There are two issues at work them.
1. What can an employee legitimately claim from the employer without incurring a personal Benefit in Kind charge?
2. What can an employer (as a business) claim against his trading profits as legitimate business related costs.
The test for 1 is - were the expemses incurred "wholly, exclusively and necessarily in the course of the employment?".
The test for 2 is - were the expenses incurred "wholly and exclusively for the purpose of the trade?"
1. What can an employee legitimately claim from the employer without incurring a personal Benefit in Kind charge?
2. What can an employer (as a business) claim against his trading profits as legitimate business related costs.
The test for 1 is - were the expemses incurred "wholly, exclusively and necessarily in the course of the employment?".
The test for 2 is - were the expenses incurred "wholly and exclusively for the purpose of the trade?"
Leftie said:
Eric Mc said:
Any costs that were not incurred "wholly, exclusively and necessarily" for the purpose of undertaking your employment duties" CANNOT be claimed.
At the very least, those expenses which have a dual nature should be apportioned in a fair and reasonable manner.
At the very least, those expenses which have a dual nature should be apportioned in a fair and reasonable manner.
I guess therefore that if I spend 4 nights away, 2 of which were at a conference and 2 were for pleasure I should apportion the travel costs 50/50%.
That's overly reasonable of you! Whilst I am sure this is the correct thing to do I would claim the whole travel cost. After all - you would NOT be going there unless it was business. Therefore you need to go there and come back. Its reasonable that the firm pay for that.
The extra hotel nights OF COURSE you must pay for yourself. I suggest paying seperately for the hotel room for the business nights. That way you don't need to submit the further receipt for the nights you pay for yourself...and that information therefore doesn't form any part of the Company accounts. Which, logically, it should not - as it is your personal expense.
Meals and so on: you need to check whether or not the receipt details the number eating (it should for tax purposes). If it says two you are going to have to submit only half of it...again - reasonable. Of course - if you can claim your Mrs was *working for the firm* on the "business nights" her expenses would be payable, no Eric?
Rule of thumb: do not take the piss and the Revenue seem fine about it.
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