Self employed v employed subsistence claims if working abroad

Self employed v employed subsistence claims if...

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Sorry to try again with this question but guidance would be appreciated.

Employees working abroad can use HMRC daily worldwide subsistence rates.

These daily rates are not meant for self employed which seems bizarre but thats how it is.

My self employed client worked abroad for about 40 days in 14/15 but thought he could use these daily rates so kept no receipts of actual costs.

If he puts the HMRC daily rates on his tax return as a reasonable estimate are HMRC likely to disallow them or might they take a more flexible view and accept this in practice?

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By Portia Nina Levin
26th Jan 2016 10:44

Try it. Tell us the outcome.

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By WhichTyler
26th Jan 2016 11:00

Risk

1. I agree with PNL

 

2. But think about this: Technically it is not employees that can use WWSRs but employers. Employers usually have some knowledge of who went where on business and for how long and why, and can set their own expenses/evidence policy. This gives a greater assurance that some expense has actually been incurred and that it was for business. If a sole trader says: I went to Paris for a week and don't have any receipts, who is to say that the trip actually happened and was for business purposes? So you might want to check that that evidence exists in case of challenge...

 

 

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By soundadvice
26th Jan 2016 13:22

Thanks for the feedback

Client definitely made the  trips I have seen the invoices to clients for the work he did in those countries specifying locations all of which he has declared as income.

His clients paid his hotel accommodation bills for him but not meals. For meals they paid him a nominal £15 per day as per diems which went nowhere near covering his meal costs. He has put the per diems received through as income and plans to claim HMRCs daily worldwide subsistence rates as expenses against this income.

I have warned him he is likely to lose if challenged by HMRC but he is prepared to take that risk. He is trying to dig up as many receipts as he can in case of a challenge  and he will keep all receipts going forward as evidence of his normal subsistence costs when away abroad.

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