Self-Employed Travel Expenses for trips from Thailand

[JB300]

I know a lot of people on here are based in Thailand but work part of the year overseas so was hoping somebody could offer some advice on the following set-up and whether it would be possible to claim the travel expenses as laid out below...

Idea is to...

1) Base myself in Thailand on an ED Visa (I'm 48 and want to do this so I can learn Thai anyway), otherwise it will be Philippines on an SRRV.

2) Set-Up a UK LTD company (I work in IT so this is pretty standard thing to do as a freelancer)

3) Travel back to the UK (or Africa/US) for 1-3 month contracts (making sure I spend no more than 3 months in any Tax Year in the UK)

4) Claim the Travel costs from my company (i.e me), saving corporation tax, income tax & VAT on anything spent in the UK.

It's likely the Client would cover some of the travel costs, but I'd be looking to travel Business class, especially for short trips (a 4 week piece of work might only require 3 days at the start & 3 days at the end in the UK) and looking to claim all (reasonable) costs from my Company (Plus the cost of Travel for the yearly AGM obviously )

Has anybody done this or am I dreaming if I think it's possible (I did spend my 1st 2 years as a non-resident a (the) Director of the UK limited company I set-up & had no problems sorting out returns etc... via my accountant)

Edited May 8, 2014 by JB300

[Mario2008]

Not visa related, moved to general.

[samran]

Set up the company in HK or Singapore. Then you don't have to worry about tax.

[wprime]

Not sure about the UK but you can't do this in Australia. You can claim the equivalent of traveling from your work address to the function address.

E.g. Business is in Sydney, you live in Bangkok and you need to attend a function in Melbourne. You fly BKK-MEL but you're only eligible to claim the costs of travel from SYD-MEL.

Why would you want to though? If you're not a taxable resident in the UK then keeping all the income in your own name (as opposed to a company) will save you from paying taxes in the UK anyway.

[JB300]

Not sure about the UK but you can't do this in Australia. You can claim the equivalent of traveling from your work address to the function address.

E.g. Business is in Sydney, you live in Bangkok and you need to attend a function in Melbourne. You fly BKK-MEL but you're only eligible to claim the costs of travel from SYD-MEL.

Why would you want to though? If you're not a taxable resident in the UK then keeping all the income in your own name (as opposed to a company) will save you from paying taxes in the UK anyway.

Thanks @Wprime, I think the only expenses I'd be able to claim from the Client would be from a nominal UK address (unless it was cheaper to get there from Thailand, e.g. A piece of work in Singapore) so was looking to minimize the cost of the travel that gets me to the UK.

You have to have a company to work from as a Freelancer in the UK & I'd rather do it via my own UK limited company than an "Umbrella" company as it gives me more freedom how to do things (Plus allows me to charge UK day rates when working in Africa etc) even if getting the UK-Thailand travel paid for is a pipe dream, I'd still probably go down this route.

@Samran: Reason I don't want to set-up a company outside of the UK is because the Clients I typically work for all have their HQs there so will be looking to contract with a UK registered company.

@Mario2008: apologies, still learning my way around the forum (and Tapatalk) thanks for moving this to the correct place

Edited May 8, 2014 by JB300

[Thaiberius]

If you are aiming for less than 3 months why the Corporation Tax? Just work tax-free.

[shepsel]

If you are planning to file your tax return in the UK, wouldn't it be more relevant to speak to at tax expert there, rather than getting opinions of people on a forum? Therefore if there is a problem in the future you will have someone to contact to help you.

[JB300]

If you are aiming for less than 3 months why the Corporation Tax? Just work tax-free.

Aiming to work 6-9 months of the year, but spend less that 3 months in the UK, though now I think about it that doesn't matter to much as I'd only pay myself a nominal wage anyway, rest will be left in the Company to pay dividends/continue to pay me a salary for a few years after I fully retire (idea is to gradually wind down, I don't think I could cope with dropping from full time to zero time in one step).

[JB300]

If you are planning to file your tax return in the UK, wouldn't it be more relevant to speak to at tax expert there, rather than getting opinions of people on a forum? Therefore if there is a problem in the future you will have someone to contact to help you.

You're absolutely right, it's just people on here seem very knowledgable & I'm sure we have some (ex)accountants who know more than my accountant so I just wanted to see if anybody else has been down this road so I can be better prepared before I speak to my accountant when I go back to UK next month.

I'm one of those lucky souls who's had to do a UK Tax return for the past 29 years, I'm sure it has something to do with me dating a Tax Inspectors daughter when I was 18

[samran]

Not sure about the UK but you can't do this in Australia. You can claim the equivalent of traveling from your work address to the function address.

E.g. Business is in Sydney, you live in Bangkok and you need to attend a function in Melbourne. You fly BKK-MEL but you're only eligible to claim the costs of travel from SYD-MEL.

Why would you want to though? If you're not a taxable resident in the UK then keeping all the income in your own name (as opposed to a company) will save you from paying taxes in the UK anyway.

Thanks @Wprime, I think the only expenses I'd be able to claim from the Client would be from a nominal UK address (unless it was cheaper to get there from Thailand, e.g. A piece of work in Singapore) so was looking to minimize the cost of the travel that gets me to the UK.

You have to have a company to work from as a Freelancer in the UK & I'd rather do it via my own UK limited company than an "Umbrella" company as it gives me more freedom how to do things (Plus allows me to charge UK day rates when working in Africa etc) even if getting the UK-Thailand travel paid for is a pipe dream, I'd still probably go down this route.

@Samran: Reason I don't want to set-up a company outside of the UK is because the Clients I typically work for all have their HQs there so will be looking to contract with a UK registered company.

@Mario2008: apologies, still learning my way around the forum (and Tapatalk) thanks for moving this to the correct place

I - well my firm - contracts to at least four uk clients on a regular basis. Never has an issue with them questioning the destination of payment.

Always worth asking the question.

[Soutpeel]

Travel back to the UK (or Africa/US) for 1-3 month contracts (making sure I spend no more than 3 months in any Tax Year in the UK

Er if your working in the UK, even for 1-3 months, you are no longer non-resident, you will pay income tax for the time you work there

Further having working as an employee through a UK based Ltd company as a British citizen even working out side the UK has its problems.

Your not going to get a proper answer on TV, talk to someone in the UK who knows UK tax law, the days of playing the games your trying to play are coming quickly to an end in the UK

[JB300]

Travel back to the UK (or Africa/US) for 1-3 month contracts (making sure I spend no more than 3 months in any Tax Year in the UK

Er if your working in the UK, even for 1-3 months, you are no longer non-resident, you will pay income tax for the time you work there

Further having working as an employee through a UK based Ltd company as a British citizen even working out side the UK has its problems.

Your not going to get a proper answer on TV, talk to someone in the UK who knows UK tax law, the days of playing the games your trying to play are coming quickly to an end in the UK

I can assure you that I'm not trying to evade paying any taxes, just trying to minimize the costs of me getting from my chosen place to live to the place I need to be to work, before I left the UK I had a one-man band limited company, when I needed to travel would pay for the travel myself, claim it back from my company who would invoice the company I was working for to claim some/most of it back so I was wondering if the same was possible from Thailand.

Thanks to all of the replies here (including/especially yours as it prompted me to check how many working days I could spend in the UK and it seems the answer is 10 (http://www.accountancyage.com/aa/news/2039224/-residents-days-uk)) I've got much more information/considerations to think through before I talk to my accountant next month.

Cheers

JB

[Edit: following on from the link above, it seems being a director of a UK company would indicate a significant tie to the UK so in the eyes of HMRC could make you a resident for tax purposes... http://www.sgllp.co.uk/client-memoranda/non-resident.htm]

Edited May 8, 2014 by JB300

[Gsxrnz]

People in genel tend to fear their Internal Revenue Department, regardless of their country of origin.

I'm still involved in businesses at home and run myself as a Limited Liability Company based there, but live full time in Thailand.

I claim all travel expenses, including diesel for my truck in thailand, as much entertaimment expenses as I can get on my credit card, etc, etc.

My company even paid for my golf clubs and other such incidentals in Thailand, tax deductible of course. I mean, I'm here on a fact finding mission for potential business opportunities, so my expenses are technically legit.......

The trick is to pay enough tax to fit the tax departments profile of what they "expect" you to pay, make sure your GST/VAT returns are not in conflict with your stated income/profit..............push the envelope as far as you can but make sure you stay beneath their radar.

Been doing it for 30 years and the tax man hasn't seen fit to darken my door yet. And if he does, my accountant and lawyer will have them ducking and diving so I may get done for a small percentage of what I've dodged. I'm still quids in.

"Tax" is the only three letter, four letter word in the dictionary.

[Soutpeel]

[Edit: following on from the link above, it seems being a director of a UK company would indicate a significant tie to the UK so in the eyes of HMRC could make you a resident for tax purposes... ]http://www.sgllp.co.uk/client-memoranda/non-resident.htm]

Bingo...HMRC are not fools, and have been trying to clamp down on a lot of things in the last few years...go and read the comments in the visa section where a guy working for a UK registered MNC in the middle East and living in Thailand cant get paid by his company unless he gets a tax number for Thailand because of HMRC policies

if you want to get "away" from HMRC, you need to "cut all ties" with the UK so there is no debate about being resident for tax purposes, problem is every little tie you have with the UK, e.g. bank accounts, properties, cars etc. strengthens HMRC case you are not really non-resident

Personally I cut all the ties with the UK, over 15 years ago, I have absolutely nothing in the UK, I want nothing from them and by the same token the Fkers are getting nothing off me...

[Phuketboy]

The only way you can claim your travel expenses from the UK to Thailand is if either you are travel to Thailand for work/business or you have an office set up here and you are travelling between offices. If you are looking at cutting costs and worried about expenses, why travel business class? There are a few options open, but as it seems UK tax related, you need to speak to an accountant who is familiar with the tax system and loop holes in the UK. The other option is to set up an office in a tax free haven and run your accounts through that office. You will need to make sure that you don't receive any payment in the UK, Thailand, USA etc. All invoicing and payments will need to go through the office in the tax free country where you set up office. It certainly seems like a lot of expense and running around to avoid tax, so the company will need to be making considerable profits in order for this to be worth while.

[JB300]

The only way you can claim your travel expenses from the UK to Thailand is if either you are travel to Thailand for work/business or you have an office set up here and you are travelling between offices. If you are looking at cutting costs and worried about expenses, why travel business class? There are a few options open, but as it seems UK tax related, you need to speak to an accountant who is familiar with the tax system and loop holes in the UK. The other option is to set up an office in a tax free haven and run your accounts through that office. You will need to make sure that you don't receive any payment in the UK, Thailand, USA etc. All invoicing and payments will need to go through the office in the tax free country where you set up office. It certainly seems like a lot of expense and running around to avoid tax, so the company will need to be making considerable profits in order for this to be worth while.

I know it might not make too much difference but I was looking at it the other way round (everything grounded in the UK, but me traveling from Thailand to there for work).

I'm not too worried about costs (I already pay to fly back to the UK 2-3 times a year from Singapore), but if I could claim it as expenses against my UK Company I would happily pay the difference (it would cost me, personally, more) to travel Business class so I could do the 3-5 day trips.

Thanks to everybody that's replied on this thread, you've given me lots of things to think about

Edited May 8, 2014 by JB300

[Thaiberius]

[Edit: following on from the link above, it seems being a director of a UK company would indicate a significant tie to the UK so in the eyes of HMRC could make you a resident for tax purposes... ]http://www.sgllp.co.uk/client-memoranda/non-resident.htm]

Bingo...HMRC are not fools, and have been trying to clamp down on a lot of things in the last few years...go and read the comments in the visa section where a guy working for a UK registered MNC in the middle East and living in Thailand cant get paid by his company unless he gets a tax number for Thailand because of HMRC policies

if you want to get "away" from HMRC, you need to "cut all ties" with the UK so there is no debate about being resident for tax purposes, problem is every little tie you have with the UK, e.g. bank accounts, properties, cars etc. strengthens HMRC case you are not really non-resident

Personally I cut all the ties with the UK, over 15 years ago, I have absolutely nothing in the UK, I want nothing from them and by the same token the Fkers are getting nothing off me...

I have insurance to cover me for legal and accountants expenses should HMRC get their teeth into me (Limited Company). Unlike the poster above I don't invite scrutiny by claiming for things such as golf clubs, I've seen too many work colleagues get caught out and enduring months of misery.

Below I have pasted a link giving advice concerning the 90 day rule should anybody be interested.

http://www.cambridgetax.co.uk/ctp/New_Residence_Rules.html

[susan d]

You may have more expense, such as accounting fee and company tax.

[JB300]

I have insurance to cover me for legal and accountants expenses should HMRC get their teeth into me (Limited Company). Unlike the poster above I don't invite scrutiny by claiming for things such as golf clubs, I've seen too many work colleagues get caught out and enduring months of misery.

Below I have pasted a link giving advice concerning the 90 day rule should anybody be interested.

http://www.cambridgetax.co.uk/ctp/New_Residence_Rules.html

I also have insurance from my accountant that (as long as I follow his advice) covers me for any HMRC audits etc... Thanks for the link, interesting reading.

Having read through all the advise/thoughts, I'm going to speak to my accountant to get his, but I think he's going to tell me it's a pipe dream (he's ultra cautious when it comes to HMRC, well it's him that needs to deal with them if they come looking for me), so will probably go down the Umbrella Company route (e.g http://www.parasolgroup.co.uk/) and judge each opportunity on whether it's worth the expense/hassle for me (e.g after funding the travel expense post-tax being paid on the money, it's not worth doing a 2-week piece of work unless I can jack the man-day rate up by £4-500 to cover the cost of the flight).

Again, I know I can fly economy (I do 2-3 times a year between Singapore & the UK & will be doing so in 4 weeks time) & may well do so if the piece of work is interesting, but even at £1500, spending £150 out of your post-tax pay (so probably more like £200-£250 of the man-day rate you're getting) per day in flight cost alone makes traveling all that way for 2 weeks a waste of time.

Thanks again for all of your contributions

[Thaiberius]

Balance it against your present wage, quality of life and long-term work. I move from contract to contract and mostly my mob and demob flights are to/from Thailand. Is it an option to get them to pay these expenses? I'm not sure but I think an umbrella company may not offer the same flexibility over travel expenses as your own limited company can. Good luck!

[JB300]

Balance it against your present wage, quality of life and long-term work. I move from contract to contract and mostly my mob and demob flights are to/from Thailand. Is it an option to get them to pay these expenses? I'm not sure but I think an umbrella company may not offer the same flexibility over travel expenses as your own limited company can. Good luck!

I'd normally agree, but my company wants to move me back to the UK so I have the choice of going back (Great Job, awesome salary) or taking the redundancy (no job, awesome lifestyle).

At 48, I'm just trying to hedge my bets