An expenses conundrum

VivS Registered Posts: 5 New 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?



  • payrollpro
    payrollpro Registered Posts: 427 Dedicated contributor 🦉
    I think you have a number of problems here. Firstly the revenue could claim that the travelling costs from the hotel to work are personal and not deductible because they were not wholly and exclusively for business purposes but merely put him in a position to carry out the work. It is no different to him travelling from home to office, its merely that his "home" location had moved temporarily.

    Secondly, the cost of the new holiday is unlikely to be classed as a business expense, though it was caused by the business needs. Personally I would either make a grossed up payment to him as compensation or do a PSA and get the company to absorb the tax liability and then argue with the revenue that it ought to be offset against corporation tax.

    I have tried several times, whilst in employment, to get the revenue to agree that hauling someone back from a holiday is an allowable expense but it has never been agreed.

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