As business in the UK is becoming more international and business trips more common, it’s important to consider whether you can claim a tax deduction for the costs of travelling abroad.
Expenses incurred by an employee for an overseas conference, seminar or study tour will typically include travel, accommodation and subsistence costs. These costs are not deductible unless:
- they are necessarily incurred in the performance of the duties of the employment or;
- the employee is travelling to a temporary workplace.
For both of these conditions, a common factor is that a deduction is not due unless the employee can demonstrate that attendance at the overseas event is necessary in order to carry out the duties of their employment. This is a very difficult test to pass.
Let me give you the following HMRC example:
A consultant neurologist attends the annual conference of the World Council of Neurology. The 4 day event takes place in Geneva, and consists of a series of meetings, lectures and seminars on medical matters. The neurologist’s employer encourages her to attend and the conference is directly relevant to her work.
At first glance you may think, yes, that was a necessary trip and that the employee should get tax relief. However, the critical part in the example is ‘encourages’. This trip was not necessary for the neurologist to attend in order to perform the duties of her employment, so the expenditure is not deductible. If the employer required the neurologist to attend the conference as part of her duties, then we would have a much stronger case.
If you’d like more information on anything you’ve read, please do get in touch on 01782 279615.