Overseas travel

Overseas travel

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Hi

We are a UK company who also has a company set up in Mauritius.  Both company's transactions are entered in the UK through Sage, but are mainly coded to either specific UK nominals or specific Mauritius nominals.

Where some of the Directors of the UK company have travelled to Mauritius, these costs have been allocated to the UK company, in Travel overseas.  Is this correct?

I am preparing the Mauritius accounts and need to know whether any of these costs should be taken up the Mauritius company or whether they are ok to be reported in the UK accounts.

Some of the travel was to set up the company in Mauritius, so I assume these should be allocated to Mauritius.  Other costs would be flights to Mauritius to carry out interviews for new employees.

Any help would be great!

Thanks

Replies (2)

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By johngroganjga
26th Feb 2015 13:21

If the costs have been incurred by the UK company and not re-charged to the Mauritian company then there is nothing to account for in the Mauritian company.

If you have to ask this question it may be that you are not maintaining a proper distinction between the two companies in Sage.

If you are asking whether the UK company should re-charge travel costs to the Mauritian company that is a commercial / management question not an accounting question.  The management decision on whether to do so might usefully be informed by advice from the company's tax advisers - the cost might be allowable for tax if incurred by one company but not if incurred by the other for example.  Or the effective rate at which tax relief is given might be different between the two companies.

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Replying to headscratcher:
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By jul2614
27th Feb 2015 09:53

Thanks for your reply.

Unfortunately, I only started here a few months ago and have been tasked with preparing the Mauritius year end accounts.  But there seems to have been no consistent treatment of costs between the UK and Mauritius.

It will be mainly flights to and from Mauritius.  The cost was borne by the UK company on Directors credit cards, and was for either directors of the UK company or Mauritian employees.

Personally it would be better and easier to have a separate entity set up on Sage so that the costs remain seperate.

Also, the Mauritian company is only costs, no revenue, so to me it sounds like a tax saving by allocating as many costs as possible to Mauritius - perhaps I'm being cynical!

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