A grey area seems to have emerged with self-employed individuals not knowing what they can and cannot claim for when travelling abroad for business so I thought I’d write a quick blog just outlining the key information to remember.
The wholly and Exclusively Rule when Travelling Abroad
This of course is the key thing to remember when you’re going to claim travelling abroad for business – you can ONLY claim for expenses which are wholly and exclusively for the purpose of your business, and all of my other points follow on from this simple fact. I recently had a client who was investigated by the HMRC because they tried to claim too much of a percentage from their trips abroad, the HMRC understand you will go abroad for business however they also know that not 100% of every expense is for the purpose of your business so never try to claim 100%.
For example, let’s say you’re going to be a public speaker at a conference abroad. You go away for 5 days but you’re only speaking/presenting 3 of the days – the HMRC would accept all expenses associated with the 3 days you’re physically working (and the general expenses like flights, taxi fares etc) but not the expenses for the other 2 days. Why? Because they would argue those 2 days weren’t part of your business and therefore you would gain some personal benefit from being abroad during those days.
So in this instance my advice would be to claim 60% of the total expenses associated with this business trip (5 days ÷ 3 days x 100 = 60%). I know this seems slightly harsh since all the travel costs are technically associated with your business because you wouldn’t even be out there otherwise! But my advice still stands, it’s better to be safe than sorry. Claim a reasonable percentage amount from the total expenses and be safe in the knowledge there’s no repercussion from the HMRC coming back years down the line and making you repay these costs.
Keep all Documentation as Proof for Business Trip
If the HMRC was to ever investigate your business trip, then you’ll need proof that you were on this trip for the purpose of your business. The best method to prove this is to keep ALL documentation which is associated with the trip and clearly proves it was for the purpose of your business and not just a family holiday (for example).
So what documentation should you keep? Everything and anything that proves it was a business trip. This mainly relates to email correspondence with event organisers explaining dates, costs and purpose of the trip and the key evidence will be invoices/receipts for payment of the work abroad. If you’re going abroad without payment then it’s even MORE important that you keep every piece of corresponding evidence that it was a business trip for the purpose of meetings or free work for publicity etc. If it’s a conference etc and you’re a speaker then a great piece of evidence to keep is a printout of the event timetable with your name clearly printed on there, proving you were there for business purposes.
So there you go, they are the key points to bear in mind whenever you’re looking to claim expenses for a business trip abroad. Just to recap, be sure to ONLY claim for the percentage of costs directly associated with your business and keep EVERY piece of documentation as proof that you were abroad on business. If you do both of these points then you’ll be able to safely claim your expenses for business travel abroad.