Are travel costs, hotel expenses and rent allowable?

Are travel costs, hotel expenses and rent...

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A UK client works on a self-employed basis as a business analyst.

During 2010/2011 he worked on a couple of consecutive contracts for an international company in Italy. These contracts lasted for about 6 months in total.

Initially he stayed in hotels during the week, returning to the UK virtually every weekend. Subsequently, he rented a flat, since this was cheaper than staying in hotels, but again regularly returned to the UK at weekends.

Can the costs of travel to Italy and back each week and the hotel costs / rent be claimed as a deduction against his taxable income or are these costs disallowed on the grounds that they are commuting / personal?

Any advice and guidance would be greatly appreciated. 

Replies (3)

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Teignmouth
By Paul Scholes
15th Jan 2012 13:16

Should be OK

Hi - in general if a person's base of operations is also their home then any travel to undertake work at client premises or sites is allowable.  Home being a base of ops if he does his admin, arranges work & contacts clients from there.

The only time foreign travel might break this rule is if the prime purpose of the trip is not work.  In other words if he decided to holiday in Italy and whilst there was able to have a meeting or even do work at the client's then the travel to/from Italy is not allowable, nor hotel costs whilst there, however if he extended the holiday by a day to do some work then one night would be allowable.

From what you say however, the prime purpose for the trips is business and so all of the travel & accommodation is allowable. Also doesn't really matter whether he pays for a hotel, flat or even tent, it will be allowed as the expenditure doesn't have to be "necessary" as it would be if he was employed.

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Replying to cheekychappy:
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By jonkaye
15th Jan 2012 13:34

Paul

Thank you very much for your assistance.

My only reservation about claiming the expenses in question is a nagging doubt arising from the fact that I do not believe that they would be allowable if the client were employed rather than self-employed, since the workplace in Italy would be regarded as a permanent workplace, given that he is required to attend there throughout the period of his contract(s).

Do you believe that this makes any difference?

Thanks again.

Kind regards.

Jon

 

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Teignmouth
By Paul Scholes
15th Jan 2012 14:40

Off top of my head

Hi Jon - I think you are talking about the 24 month rule in which a workplace is not temporary if he attends continuously for >24 months OR attends for the entire period of the employment.

It's the last word that people get confused over, ie it's not the period of the contract it's the period of employment.that determines whether it's perm or temp. 

So in this case, if he's was employed before & after the contract term (which is itself below 24 months) he'd be OK because his attendance was not for the period of his employment.

As I say above is off the top of my head but think that's the drift as it's a topic that comes up here from time to time.

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