However, while such trips can be an opportunity for team bonding and facilitate greater cohesion, they are not without legal and tax risks. Where such trips are endorsed or financially sponsored by the employer, there can be a nasty liability hangover.
Travel safety should fall under HR umbrella
Protecting and supporting travelling teams
Employers have a duty of care to make business travel stress-free for employees
Defining the trip status
Issues can arise where there is blurring of the status of the trip: is it a work event or not? This is clear cut where colleagues have independently booked a purely recreational trip; here employees are expected to use their annual leave entitlement, obtain their own travel insurance and expenses are irrecoverable.
However, many employers will encourage colleague socialising and part sponsor the trip or some elements of it, for example pay for dinners or accommodation.
In these circumstances, tax liability can arise quite quickly, with any personal expenses that are reimbursed by the employer likely to fall within scope of a benefit in kind and therefore be taxable.
Inconsistencies and ambiguity in reclaiming expenses can be divisive; for example, if senior management are recovering expenses, where others are expected to shoulder their costs.
Ambiguity about the status of the trip may also lead to a gap in insurance cover, with employees assuming that they are covered by the company’s group travel insurance policy, which may have...
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