Really desperate - accommodation relief abroad so confusing

[IslandMan]

Hi all
I am new here and would kindly appreciate some help. I am currently a sole trader. I have been offered a job abroad by a foreign employer for 3 months(probation), it is a short contract and could potentially be made longer. I will be considered an employee of the foreign company.

There are no dual taxation rules for this country.

They are paying me an accommodation allowance but I need to rent the property my self and will be reimbursed. If I return to the UK after the 3 month probation (for example if /kids do not like the role), I will ofcourse be considered UK resident. Can I claim tax relief on accommodation costs when abroad ? My 2 children will be with me. DO i need to declare this?/ If i do not bring them is is better for tax purposes?

As it is a probation, I plan on continue to pay rent on my UK flat and it is for this reason I would like to know if I can get the tax relief ? Renting two homes is not cheap.

I will also be given travel allowance by the foreign employer , is this tax deductable in the UK if I were to return.
My main concern is the accomodation as ofcourse this is the biggest cost.

Thank you for your help. I have foundHMRC literature stating that it is possible to get tax relief but does this apply not my situation - going to sole trad - foreign employmen t for short period.

Regards.

[GlobalTaxAdviser]

Hi

No you cannot claim tax relief on your family home. I don't see the issue when you get accommodation allowance too.

You cannot have the whole cake and would suggest seeing your other post that you perhaps should consult an accountant.

Kind Regards

GTA

[IslandMan]

I read the following in HMRC guidance ( in document 490 - employee travel page 43/44) and was wondering i can apply them to me.


There are special tax rules which give extra tax relief for travel by some employees who work abroad, or come from abroad to work in the UK. The full cost of foreign travel may qualify (in the same way as the full cost of domestic travel) for tax relief under the general travel expenses rules. Employees may instead be entitled to tax relief under the special rules which apply only to foreign travel but generally it will be sensible to consider first whether tax relief is available under the general travel expenses rules.

An employee who is resident in the UK and who carries out all their duties abroad is entitled to tax relief: • when they start the job abroad – for the full cost of travelling from anywhere in the UK to the place abroad where they will be working • when they finish the job abroad – for the full cost of travelling back to anywhere in the UK • while they are working abroad – for the cost of accommodation and subsistence but only to the extent that this cost is included in the employee’s earnings, for example, where the cost is borne or reimbursed by, or on behalf of, their employer If the employee has 2 jobs – for the full cost of travelling from where they do one job to where they do the other. But an employee is entitled to tax relief for these expenses only if: • they are living in the UK • their employer is resident in the UK

An employee who is resident in the UK and carries out all their duties abroad is also entitled to tax relief if the duties: • can only be carried out abroad – for the full cost of journeys to and from anywhere in the UK made during the time he or she works abroad • keep the employee abroad for 60 days or more – for the full cost of a spouse or civil partner and children travelling from anywhere in the UK to visit or accompany the employee to the place where he or she is working and their return journey back to the UK
But the employee can get tax relief for these expenses only if the cost is included in the employee’s earnings, for example, where the cost is borne or reimbursed by, or on behalf of, their employer.

In my case my employer is based abroad but in the bold bit I highlighted it does not state the employer need to be UK based. As mentioned before there will be reimbursement.

[AnthonyR]

Not an expert on these, but my understanding is that these rules tend to apply where your employer sends you away to work abroad (say you are working on a large construction project abroad that you clearly can't do from the UK) the reliefs take into account the fact that you have no choice in the matter. Similar rules would apply if you work in London and you have a project in Glasgow that you need to work on temporarily - cost of transport/hotel accommodation are allowable.

However, if you chose to work for an employer outside of the UK that is your choice and as such the additional costs are not employment related. The same would apply if you live in London and chose a job/employer based in Glasgow, the accommodation and travel costs would not be allowable.

It's all about whether your employer requires you to travel abroad (generally allowed) or if you chose work for an employer based abroad (not allowed).