Q. My personal service company is about take on an IT servicing contract in Belgium. The customer will pay me a rate for every day I attend their premises, on top of my fee for the whole contract. This 'per diem' rate is less than HMRC's benchmark rate for expenses when working in Belgium. Can it be paid directly to me personally or should it be paid to my personal service company?

A. The 'per diem' rate should be paid to your company and be included in its turnover for VAT purposes, so treat it as a gross receipt including VAT. Your company can pay you expenses for working abroad, at or below the HMRC agreed benchmark rates. Do not short circuit this by accepting the per diem rate straight into your personal bank account as this will create a VAT mess.

Q. I work through my own personal service company. When I go abroad on business my customer normally pays for the cost of hotels and meals. Can I still claim the personal incidental expenses (PIE) from my own company?

A. Yes you can still claim the PIE, which is £10 per night for overseas trips, when you are abroad on business. The PIE is supposed to cover incidental expenses such as phone calls, newspapers and laundry, not the cost of hotel or meals.