Business Trips...
Discussion
We want to go on a "business trip" next year to New York. Will probably be getting airfares and hotel accomodation(sp?) through the business.
Will the tax man be able to tear a chunk out of us as individuals? Do we need proof that it is a "business trip"?
Can we get VAT back on the airfares?
Will the tax man be able to tear a chunk out of us as individuals? Do we need proof that it is a "business trip"?
Can we get VAT back on the airfares?
Is your business a sole trader, partnership or limited company?
Who is "we" - proprietor, partner, partners, director or directors? Are the other people travelling employees of the business or do they have any connection with the business at all?
You cannot claim back VAT on air fares as air fares do not contain any VAT - they are exempt.
Who is "we" - proprietor, partner, partners, director or directors? Are the other people travelling employees of the business or do they have any connection with the business at all?
You cannot claim back VAT on air fares as air fares do not contain any VAT - they are exempt.
OK
Thgings you need to consider
Is the trip 100% business related. Then, all the costs can be put through the company Profit and Loss account as Business Travel - end of story.
If it is not 100% business related, then some personal tax will need to be paid in respect of the non-business element. The way to go about accounting for this is -
i) post all the business costs through the business P & L account as business travel (as mentioned above).
ii) when you are completing the end of tax year Benefit in Kind P11d forms for each director sometime after 5 April 2004, enter the private element of the New York trip as a Benefit in Kind. Your PAYE Notices of Coding for 2004/05 will be automatically adjusted to pick up the personal tax due on the trip.
That's it.
Thgings you need to consider
Is the trip 100% business related. Then, all the costs can be put through the company Profit and Loss account as Business Travel - end of story.
If it is not 100% business related, then some personal tax will need to be paid in respect of the non-business element. The way to go about accounting for this is -
i) post all the business costs through the business P & L account as business travel (as mentioned above).
ii) when you are completing the end of tax year Benefit in Kind P11d forms for each director sometime after 5 April 2004, enter the private element of the New York trip as a Benefit in Kind. Your PAYE Notices of Coding for 2004/05 will be automatically adjusted to pick up the personal tax due on the trip.
That's it.
Do we need proof that the trip is business related? Who if anybody would check this kind of thing?
There is a conference next year that would be beneficial for us to go to. It only lasts for 3-4 days but we'd like to spend about a week there, might as well incorporate a short break while we are there... ;-)
There is a conference next year that would be beneficial for us to go to. It only lasts for 3-4 days but we'd like to spend about a week there, might as well incorporate a short break while we are there... ;-)
The responsibility of reporting the "private" element of such trips would lie with the Directors of the company i.e you and your wife. The administration of the tax payable is through the PAYE system and as such is the resonsibility of the employer i.e. the company and, by inferrence, the directors. The likely route through which the Inland Revenue might find out about such an expense could be through a routine PAYE or NI inspection or through a general set of queries on the company's annual accounts and Corporation Tax return.
It is an offence to falsify PAYE records and deliberate omissions on the P11d can result in a £3,000 fine - FOR EACH INCORRECT P11d RETURNED! The PAYE system is largely a Self Assessed system. You can put what you like on the PAYE records and Benefit in KInd returns - but if the details shown are incorrect or false, you will end up in big trouble.
It is an offence to falsify PAYE records and deliberate omissions on the P11d can result in a £3,000 fine - FOR EACH INCORRECT P11d RETURNED! The PAYE system is largely a Self Assessed system. You can put what you like on the PAYE records and Benefit in KInd returns - but if the details shown are incorrect or false, you will end up in big trouble.
eric mc said:
The responsibility of reporting the "private" element of such trips would lie with the Directors of the company i.e you and your wife.
WIFE???
We're not that close AND he's a bloke I get what you mean though. We'd probably end up paying some tax ourselves. As to how much is unknown at this point...
Thanks...
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