What does HMRC (the UK tax agency) view as valid expenses for travel?
Food is almost never a valid expense. Reason for it is simple - if you were not conducting business you would have to eat too. Ad 1. I don't see why travel in that case would not be a valid expense, as the only reason for you to travel there is for business reasons. Ad 2. Unlikely as there is a duality of purpose. So while part of it may be business, you are also getting personal benefit from the visit (coffee/cakes etc) so that generally is a no. Ad 3. No, while you can claim for entertainment of employees (to sensible extends), that doesn't work when entertaining clients. Ad 4. If any part of the trip is for leisure then you cannot claim it as business expense, sorry! If there is any duality of use then it's not a business expense. And food, as always, is a no go.
"DirectGov has a good overview here: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017814 and answers to your specific questions here: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_10013435 In short, you do need to declare the rental income on your tax return and will need to pay tax on it (and note that only the mortgage interest (not the full repayment) is deductible as an ""allowable expense"", see the full list of what is deductible here: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_10014027 )." Short answer: it's complicated. The UK govt pages on foreign income are probably your best starting point: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/LeavingOrComingIntoTheUK/DG_10027480 As you can see, it depends on your precise residence status here.  (There is a tax treaty between the UK and the US so you wouldn't be double taxed on the income either way. But there might still be reporting obligations). "Worksheets/ Documentation: (From my experience filing my business deductions through several tax preparers.) Keep all your calculations, but only submit the calculations and worksheets requested by the tax form. Most travel deductions are just a category total. If the IRS wants more info, it will ask for it. Information from the book Home Business Tax Deductions (from Nolo) (2012): Traveling with kids: In chapter 9 (""Leaving Town: Business Travel""), in the section ""Taking People With You"", it specifically discusses your situation. Paraphrasing, it says that you can deduct the amount any eligible expenses would have cost you if you were traveling without your kids. So, you can deduct the cost the smaller hotel room that you and your wife would have normally rented if you were alone.  How your side trips affect your business deductions: According to the book, since you spent 50% or more of your time on business activities while traveling in the U.S.: Deducting meals shared with your kids: You can deduct meals as either entertainment or travel expenses.  I would recommend you buy one of Nolo's books on deductions, as it goes into much more detail than I do here." With a question like this you should talk to a tax professional who knows about international tax and knows about both the UK and the country you will be working in. They will give you up to date advice on what can be an extremely complex question. However to get you started I'll tell you what I was told when I did this nearly twenty years ago. It's all about whether you are resident in the UK for tax purposes or not. If you are, you will pay UK tax. If not, you wont (assuming you are being paid outside the UK - check with your professional exactly what is involved). In those days you could be counted as 'non resident' if you spent a complete period of twelve months outside the UK. You can make occasional visits to the UK without invalidating that. Again, check exactly how much you are allowed to return while still being not resident. Usually you will have to pay tax in the country where you are resident, but check the rules there. With some skilful timing you may be able to be considered non-resident in bouth countries, at least for some of the time. Again, your tax professional will know. The bank account question - again get a professional. I don't think it's a problem, but you may have to establish that you are being paid in the foreign country. In general you are going to need an account in the country where you work, so if its a problem get paid there and transfer any money you need in the UK. My understanding (I am not a lawyer or tax expert) is that you are not allowed to work for free, but you can pay yourself minimum wage for the hours worked. There are probably National Insurance implications as well but I don't know. The main thing is, though, that if HMRC think that you've set up this system as a tax avoidance scheme then they're allowed to tax you as though all the income had been yours in the first place. If you are considering such a setup I would strongly advise you to hire a qualified small business accountant who will be familiar with the rules and will be able to advise you on what is and is not possible / sensible. Falling outside the rules (even inadvertently) leaves you liable to a lot of hassle and potentially fines etc. Tax regulations vary from country to country - some permitting more deductions, some less - but here are a few guidelines. As regards the home-office: As regards the deductions: Think of it like this: in order to have space for a home-office you needed a bigger home.  That leads to increased rates, heating, insurance and so on.  Many tax regulators recognise that these are genuine expenses.  The alternative is to rent a separate office and incur greater expenses, leading to increased deductions and less overall tax paid (which won't finance the deficit). The usual test for deductions is: was the expense legitimately incurred in the pursuit of revenue?  The flexibility permitted will vary by tax authority but you can frequently deduct more than you expected. As 'anonymous' already mentioned, I think the correct answer is to go see an accountant. That said, if you are already have to fill in a tax return anyway (ie, you're already a high rate taxpayer) then I don't see why it should be an issue if you just told HMRC of your additional profit via your tax return. I never was in the situation of being employed with a side business in the UK, only either/or, but my understanding is that registering as self employed is probably more suitable for someone who doesn't PAYE already. I might be wrong on this as I haven't lived in the UK for a couple of years but an accountant would know the answer. Of course in either case, make sure that you keep each an every scrap of paper to do with your side business. The key factors here are  You will need to pay tax in the UK only if you live more than 183 days - that too in a tax year. Indian tax system will also classify you as a NR (Non-resident) if you live outside for more than 182 days in a tax year.  In your case, your income will be in India and will stay in India. So there should not be any UK tax until you try and get that money to the UK. I will not go into outlining what if you want to go down that road since it does not apply. As for tax in India, You will need to pay tax since the source of income is Indian.  Hope this helps. Some items are VAT Exempt or Reduced, but in short you will pay it on almost any all consumer goods. Assuming you are a visitor to the UK from a non-EU nation then Her Majesty will refund you with the appropriate paperwork This is essentially a reimbursement of your expense. Since you can deduct the expense, the fact that the reimbursement is taxable doesn't affect you much. You deduct your home office expenses on your annual tax return using form 8829. See the IRS site for more details. If you're asking about the UK tax, there may be some other considerations, but from the US tax perspective it is (nearly) a wash. "Some of the 45,000 might be taxable. The question is how was the stipend determined. Was it based on the days away? The mile driven? The cities you worked in? The IRS has guidelines regarding what is taxable in  IRS Pub 15 Per diem or other fixed allowance.  You may reimburse your employees by travel days, miles, or some other   fixed allowance under the applicable revenue procedure. In these   cases, your employee is considered to have accounted to you if your   reimbursement doesn't exceed rates established by the Federal   Government. The 2015 standard mileage rate for auto expenses was 57.5   cents per mile. The rate for 2016 is 54 cents per mile. The government per diem rates for meals and lodging in the continental   United States can be found by visiting the U.S. General Services   Administration website at www.GSA.gov and entering ""per diem rates"" in   the search box. Other than the amount of these expenses, your   employees' business expenses must be substantiated (for example, the   business purpose of the travel or the number of business miles   driven). For information on substantiation methods, see Pub. 463. If the per diem or allowance paid exceeds the amounts substantiated,   you must report the excess amount as wages. This excess amount is   subject to income tax with-holding and payment of social security,   Medicare, and FUTA taxes. Show the amount equal to the substantiated   amount (for example, the nontaxable portion) in box 12 of Form W-2   using code “L""" The IRS Guidance pertaining to the subject.  In general the best I can say is your business expense may be deductible.  But it depends on the circumstances and what it is you want to deduct. Travel Taxpayers who travel away from home on business may deduct related   expenses, including the cost of reaching their destination, the cost   of lodging and meals and other ordinary and necessary expenses.   Taxpayers are considered “traveling away from home” if their duties   require them to be away from home substantially longer than an   ordinary day’s work and they need to sleep or rest to meet the demands   of their work. The actual cost of meals and incidental expenses may be   deducted or the taxpayer may use a standard meal allowance and reduced   record keeping requirements. Regardless of the method used, meal   deductions are generally limited to 50 percent as stated earlier.    Only actual costs for lodging may be claimed as an expense and   receipts must be kept for documentation. Expenses must be reasonable   and appropriate; deductions for extravagant expenses are not   allowable. More information is available in Publication 463, Travel,   Entertainment, Gift, and Car Expenses. Entertainment Expenses for entertaining clients, customers or employees may be   deducted if they are both ordinary and necessary and meet one of the   following tests: Directly-related test: The main purpose of the entertainment activity is the conduct of business, business was actually conducted   during the activity and the taxpayer had more than a general   expectation of getting income or some other specific business benefit   at some future time.   Associated test: The entertainment was associated with the active conduct of the taxpayer’s trade or business and occurred directly   before or after a substantial business discussion. Publication 463 provides more extensive explanation of these tests as   well as other limitations and requirements for deducting entertainment   expenses. Gifts Taxpayers may deduct some or all of the cost of gifts given in the   course of their trade or business. In general, the deduction is   limited to $25 for gifts given directly or indirectly to any one   person during the tax year. More discussion of the rules and   limitations can be found in Publication 463. If your LLC reimburses you for expenses outside of this guidance it should be treated as Income for tax purposes. Edit for Meal Expenses: Amount of standard meal allowance.   The standard meal allowance is   the federal M&IE rate. For travel in 2010, the rate for most small   localities in the United States is $46 a day. Source IRS P463 Alternately you could reimburse at a per diem rate There are really only two options: invoiced, or paid. Everything else is not relevant from a tax or accounting point of view. Of course, if you're invoicing as you go along or collecting deposits once things are in your order books, then that amount of money is relevant. Working things out according to when you invoice is called working on an accrual basis. Working it out according to when you get paid is called working on a cash basis. Wikipedia explains the distinction, which also applies to your expenses: when did you incur them (get the bill) vs when you did you pay it. In some jurisdictions and for some kinds of companies, you can choose which of these two bases to work on (but no other basis.) There is advice on the UK government website about keeping your accounts. It includes a link to a PDF and on page 15 of that 100 page PDF it states: 2.14 The financial statements, with the exception of cash flow information, shall be prepared on the accruals basis of accounting. HENCE, ALL INCOME AND CHARGES RELATING TO THE FINANCIAL YEARTO WHICH THE ACCOUNTS RELATE MUST BE TAKEN INTO ACCOUNT, WITHOUT   REGARD TO THE DATE OF PAYMENT OR RECEIPT. That seems pretty clear to me. When you invoice. Period. The answer on the Canadian Government's website is pretty clear:  Most employees cannot claim employment expenses. You cannot deduct the   cost of travel to and from work, or other expenses, such as most tools   and clothing. However, that is most likely related to a personal vehicle. There is a deduction related to Public Transportation:  You can claim cost of monthly public transit passes or passes of   longer duration such as an annual pass for travel within Canada on   public transit for 2016. The second sleeping residence is hard to justify as the individual is choosing to work in this town and this individual is choosing to spent the night there - it is not currently a work requirement.  As always, please consult a certified tax professional in your country for any final determinations on personal (and corporate) tax laws and filings. IRS Publication 463 is a great resource to help you understand what you can and can't deduct.  It's not a yes/no question, it depends on the exact company use, other use, and contemporaneous record keeping.