An expenses conundrum

VivS
VivS Registered Posts: 5 Regular contributor ⭐ ? ⭐
My MD (and 80% shareholder!) took a 2 week holiday (in the West country) in June and, due to an overload of client work back at the office, he cut the holiday short and returned after 1 week. The cost of the hotel accomodation was £640.00 per week. He has now returned to the same area for a further week and wants to claim the cost of this holiday on expenses. I have no difficulty in justifying the return mileage claim, however the hotel is £1464.00 for 6 nights....................some £824.00 more (and 1 night less) than the original hotel. He did try to return to the original hotel which was fully booked and investigated self-catering etc.

Is this a valid expense claim? If not how can I re-imburse him economically?

Comments

  • Psyche
    Psyche Registered Posts: 187 ? ? ?
    I would say if the return to the office was not avoidable, it would be appropriate to reimburse him the extra cost i.e. the £824 difference, as the necessary return to work was the reason his cost was higher. If he submits both bills to show the difference.

    Of course my spidey sense is saying "did he REALLY have to return to work, couldn't he have got someone else to deal with whatever it was?" But that's easy for me to say as he's not my boss ;)
  • deanshepherd
    deanshepherd Registered Posts: 1,809
    As he is the director and controlling shareholder he can reimburse himself for whatever he likes. The issue at stake is whether there is a BIK issue and I would suggest there is. The holiday is not wholly, exclusively and necessarily incurred in the performance of his duties so it is a benefit in kind. The fact that his costs increased as a result of returning to work are irrelevant. If he were an ordinary employee then presumably he would have been paid some kind of recompense (e.g. a bonus/overtime) to cover the additional cost and inconvenience which would of course have been taxed via the payroll.

    The real question is probably whether PAYE should be operated via the payroll or the expense reported on his P11D..
  • VivS
    VivS Registered Posts: 5 Regular contributor ⭐ ? ⭐
    Thanks to both of you for your views.
    The claim is for the full amount of the 'second' holiday which amounts to TOIL for the 2nd week of his 'first' holiday which he abondonned (and yes in my view he did need to return - the staff were working late and overnight most of that fortnight). I suppose my concern is that he is not paying staff any overtime but allowing TOIL instead. My instant reaction (to the email that I found after he had left for the holiday requesting immediate payment to his overdrawn bank account!) was that it would be fine to recompense for the lost 2nd week hotel costs but the additional cost for this week was dubious. Maybe some could be expensed and the remainder could become addtional salary? Any thoughts on this would be appreciated.

    :confused1:
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