Work expenses for spouses accompanying employees on business trips (480: Chapter 10)
Find out about travelling and subsistence expenses for an employee's spouse when they accompany them on business trips.
Overview
10.1
Where an employer (or another person acting on behalf of the employer) bears the travelling and subsistence expenses of an employee’s spouse who accompanies them on a business trip, the employee is liable to tax on the cost of the spouse’s trip unless either:
- relief is due under the special rules for employees working abroad (chapter 9)
- the expenses of the spouse’s journey can be allowed or exempted under the ordinary expenses rule as incurred ‘wholly, exclusively and necessarily in the performance of the employee’s duties – whether such an allowance can be made will depend upon the facts of the particular case (see paragraphs 10.2 to 10.6)
10.2
A deduction or an exemption for the spouse’s expenses might be admissible if the spouse has some practical qualification directly associated with the employee’s mission which they use to assist the employee regularly during the trip. For example, as a competent linguist the spouse acts as translator at business meetings, when otherwise an outside interpreter would have been needed.
A spouse’s expenses might also be allowed where the employee’s health is so poor that it would be unreasonable to expect them to travel alone.
10.3
Where the spouse’s presence is for the purpose of accompanying the employee at business entertainment functions, the expenses of the spouse’s trip will need to be considered under the rules, outlined in chapter 20, about entertainment.
If a disallowance for the expense is made in calculating the employer’s tax liability, a deduction or exemption may be available under the ordinary expenses rule where the spouse’s presence is essential in order to act as host or hostess at a series of business entertaining occasions which the employee is required to organise as part of the duties.
10.4
Where the part played by the spouse is relatively unimportant (such as giving occasional assistance with clerical duties or making the travel and hotel reservations), or the main reason for the spouse’s travel is personal, for example, to avoid the separation from the employee or to visit relatives abroad, the expenses will not be deductible or exempted under the ordinary expenses rule. It is not enough for the employee’s spouse merely to attend functions where other guests are accompanied by their spouses.
Keeping of records
10.5
Where it’s asserted that a spouse’s expenses are allowable for tax purposes it’s important that the deduction or exemption should be supported by records. If it’s claimed that the reason for the spouse’s journey was to act as host or hostess during the business entertaining of overseas customers, then HMRC may ask for evidence and the extent of entertaining.
Spouse’s expenses borne by the employee
10.6
Where the spouse’s expenses are not borne by the employer (or another person acting on behalf of the employer) no deduction or exemption for tax purposes under the expenses rule described in chapter 7 paragraph 7.1 can normally be allowed.