Employment Tax

Overseas business expenses

Produced by Tolley in association with Philip Rutherford
  • 18 May 2022 14:31

The following Employment Tax guidance note Produced by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:

  • Overseas business expenses
  • Introduction
  • Travelling overseas
  • Overseas scale rates
  • Key tests for overseas travel
  • Travel to work outside the UK ― first and final journeys
  • Interim journeys
  • Overseas accommodation and subsistence
  • Travel by spouse and / or children
  • Other costs of overseas travel

Overseas business expenses

Introduction

There are special rules for employees who perform their duties overseas and also for employees who come from overseas to work in the UK. The rules relating to overseas business expenses have a number of specific tests.

This guidance note relates to the expenses of those individuals, not their residency status for tax purposes which may also need to be considered. For more about these aspects of the employee’s tax status, please refer to the Residence and domicile ― effect on tax liability guidance note.

This guidance note addresses the tax and NIC treatment available when UK-based employees travel overseas on business. For the additional reliefs that may apply when a non-UK domiciled individual has the costs of visits to their home country (for themselves or their family) provided by their employer, please refer to the separate Home leave and employee travel guidance note.

The NIC legislation on deductible travel expenses is generally aligned with the tax treatment. Therefore, unless indicated otherwise, NIC treatment of overseas travel expenses will match the tax treatment.

Prior to considering the special rules for overseas business expenses, first consider the travel and subsistence rules explained in the Travel expenses and Subsistence expenses guidance notes. If an expense is already allowable under these rules then there is no requirement to consider the tests for overseas business expenses, eg there is no requirement to look at the residence or domicile of an employee under those rules.

HMRC

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