How to enter HMRC scale rates for subsistence

[jgbroadcast]

Hi,
I travel overseas a lot and rather than expense my meals etc whilst travelling, I’d like to use HMRC’s scale rates for subsistence. The figures given by HMRC are all in local currency so how do I enter these figures? I believe they should be untaxeable income so will Quickfile reflect this? I am the co. director btw if that makes any difference.
Thanks
John.

[ian_roberts]

I can’t answer the questions on whether it’s taxable (I’m not an accountant), but assuming you can just treat the payments as a regular business expense then the easiest way is probably to do it as foreign currency purchases - create a dummy supplier for subsistence payments configured as “exempt or out of scope” for VAT, then for each trip create a purchase in the relevant currency for the scale rate payment, tick “out of scope”, and mark it paid in full from your Director’s Loan account on the same date (so there’s no currency loss or gain). This will give you a record of having paid the right scale rate in the right currency, but show it on your P&L at the sterling equivalent on that day.

If/when you actually take reimbursement from the company that simply shows as a transfer to your DL.

[cbmoran64]

Do you use multi-currency or are you entering everything in sterling? If sterling, then just convert the amounts at the rate in force on the day in question, before you enter them in QF.

If you are comfortable with entering journals, then this is the best way to deal with directors’ expense claims - of any kind. You would enter a manual journal and debit the relevant expense code (travel/subsistence) and then credit the director’s loan account. This then creates a liability to you which can be cleared as and when you wish. The expense is reflected in the P&L in the correct category. Scale rate payments at the HMRC level do not need to be declared on a P11D.

If you are not comfortable with journal entry, then I suggest you set up yourself as a supplier and enter a purchase invoice for each new expense claim. This creates a liability in the balance sheet, although it will appear in trade creditors which is not the correct place. To get around this, you would need to clear it by an entry to directors loan - effectively you use the director’s loan account as the bank account to pay off the “supplier”, which then moves the liability out of trade creditors. Again, the balance on director’s loan can be paid back as and when.