The management of the Spetz Ltd group requires advice on the income tax treatment of the costs relating to an employee working abroad.

The Spetz Ltd group of companies:
– Meyer, an employee of Spetz Ltd, has been seconded to work for Kraus Co.

Meyer:
– Will work for Kraus Co in the country of Mersano from 15 December 2013 to 31 March 2014.
– Will continue to be employed by Spetz Ltd.
– Will continue to be resident, ordinarily resident and domiciled in the UK.

The costs relating to Meyer’s secondment to Kraus Co:
– Meyer will be reimbursed for the cost of the flights at the start and end of the contract.
– Meyer will return to the UK for a holiday in February 2014, and will pay his own transport costs.
– Meyer will be reimbursed for the cost of laundry and telephone calls home.
– Spetz Ltd does not have a Form P11D dispensation (PAYE dispensation) in place with HM Revenue and Customs.

Required:
(c) Explain the UK income tax implications for Meyer of the costs relating to his secondment to Kraus Co. (5 marks)