Since late 2020 my wife and I have lived in Australia. My wife and I own and run a web platform for predominantly UK based tutors. The business was set up in the UK, but now operates through an Australian company. My wife also works part time in the business as our HR / relationship manager.
In April/May 2022 we returned to the UK for 57 days. The primary purpose of the trip was to meet our UK tutors – most of whom had joined our platform since we arrived in Australia, and to meet potential additional tutors. The secondary purpose was to meet family and friends.
I continued to work at least 35 hours a week on the business during our stay when not visiting tutors, family or friends. My wife was closely involved in arranging and visiting the tutors, but otherwise did not work on our business.
We stayed primarily in the house we still own in the UK, but also in hotels when travelling to visit tutors.
Because our trip coincided with a covid wave in the UK we arranged most of our visits (to both tutors and family) to the second month of our trip. Even so, 10 days before returning I, and then my wife, caught covid. We therefore isolated for the 10 days before flying home.
We kept a travel diary with our activities each day. My question is, for each type of expense, what is a reasonable proportion to charge for work purposes?
1. Travel to and from the UK: can I assume a 35 hour working week (so a ‘normal’ 285 working hours over the 57 days), and allocate expenses based on hours worked (excluding work travel) divided by 285 as the work related element for each of us?
2. Car travel within the UK: we borrowed a car from my brother to travel around the UK to meet tutors. We paid for the servicing and repair of the car. We incurred petrol, servicing, parking, tolls and penalty charges for parking / road tolls not paid on time. Allocating these between work related and private use would be difficult. Can I use the UK HMRC per-mile expense rate to estimate the cost of work-related km? We do no work related travel in Australia, so will be well under annual limits.
3. Entertaining: we paid for meals with tutors. I assume this is allowed as 100% work related?
4. Hotel costs whilst travelling to see tutors / subsistence whilst away from our UK home visiting UK tutors: I assume this is allowed as 100% work related?
5. Our own subsistence in our UK house: I assume this is not allowable given the length of our trip / on the basis that such costs would otherwise be incurred in Australia?
Our company paid for the flight tickets, but other costs have been incurred privately.
1. I assume re-imbursing the company for the private element of the flight costs, and claiming the work element of the other costs as an expense from the company will avoid any fringe benefit consequence and avoid having to claim these costs on our personal tax returns?
2. Is this still OK as our expenses claim / reimbursement of the flight private element will be in the following tax year?
756 views
7 replies