Expenses - pushing the envelope

[Maslins]

I think you'd need to be able to argue you had a realistic profit motive. In your follow up post you've alluded to a company there which might lead to a revenue stream, at which point maybe it becomes more plausible.

My view based on your OP is that it does just sound like someone writing a blog following their holiday and attempting to call it a trade.

[northernladuk]

If he is developing content and needs to be on site, what is the problem? It might indeed invite questions from HMRC, but if he can demonstrate it as wholly, nescessarily and exclusively (or is the wording slightly differnet - you get the point) for business, then why isn't he in the clear.

Turn it round the other way, if someone wants to undertake this kind of business activity, how are they meant to do so if their business cannot spend its cash in this way?

This could be true and am not saying he can't. Just pointing out a mistake in his thinking. I believe he is trying to convince himself and us it is ok by making inaccurate statements as he is blinded by his desire to do this and not thinking about it strictly as a business. This is what HMRC will pick apart IMO. The main business of this venture is tourism, his revenue will be generated from it. The website is just a tool in this example. Thomas Cook has a website, that doesn't make them an IT company.

Am sure he will get away with this and won't get investigated but that will be by pure luck not by design so just discussing it on a theory basis.

[JamJarST]

This could be true and am not saying he can't. Just pointing out a mistake in his thinking. I believe he is trying to convince himself and us it is ok by making inaccurate statements as he is blinded by his desire to do this and not thinking about it strictly as a business. This is what HMRC will pick apart IMO. The main business of this venture is tourism, his revenue will be generated from it. The website is just a tool in this example. Thomas Cook has a website, that doesn't make them an IT company.

Am sure he will get away with this and won't get investigated but that will be by pure luck not by design so just discussing it on a theory basis.

Have to agree with NLUK here, furthermore I don't think Thomas Cook send their web development company over to the destinations to update the website.

[Craig@Clarity]

Hi Guys,

This is always going to create arguments and counter-arguments (discussions etc) in terms of whether it's wholly and exclusive or whether it fits the 'jolly' category.

Take a look at this recent case The Finance & Tax Tribunal

I know it relates to self employment but it's an "interesting" case which shows how expenses can be interpreted by both the taxpayer, HMRC and different tiers of tribunal.

[Pondlife]

I think that HMRC would take in to consideration the amout of revenue this site or the business generates due to the expense incurred.

Eg. if the OP runs up £5K worth of flight and hotel bills and all that they have to show for it is some knocked up joomla site with a couple of beach pics and a blog that gets 4 hits a month they're going to come down hard. If the site is generating more than the cost of the expenses and can be shown to be a legitimate revenue stream then it would be perfectly acceptable I should think.

Just my £0.02


Note: If the next question from the OP is "Can I take my wife on a business trip" I will demand a public flogging

[northernladuk]

Hi Guys,

This is always going to create arguments and counter-arguments (discussions etc) in terms of whether it's wholly and exclusive or whether it fits the 'jolly' category.

Take a look at this recent case The Finance & Tax Tribunal

I know it relates to self employment but it's an "interesting" case which shows how expenses can be interpreted by both the taxpayer, HMRC and different tiers of tribunal.

The guy in that article is just a joke. He tried to claim £20k over 3 years and still hadn't finished his book. He also intended to do the same in Greece. WTF. The fact he hadn't documented most of the costs and couldn't remember them either LOL. HMRC must have had a field day with that one.

[BA to the Stars]

He could always become an MP

[Craig@Clarity]

The guy in that article is just a joke. He tried to claim £20k over 3 years and still hadn't finished his book. He also intended to do the same in Greece. WTF. The fact he hadn't documented most of the costs and couldn't remember them either LOL. HMRC must have had a field day with that one.

Port Grimaud, the port he was moored up at is pronounced 'Grim-oh'

[captainham]

I think that HMRC would take in to consideration the amout of revenue this site or the business generates due to the expense incurred.

Eg. if the OP runs up £5K worth of flight and hotel bills and all that they have to show for it is some knocked up joomla site with a couple of beach pics and a blog that gets 4 hits a month they're going to come down hard. If the site is generating more than the cost of the expenses and can be shown to be a legitimate revenue stream then it would be perfectly acceptable I should think.

I would disagree with this personally. Either something is a valid biz expense or not...the amount of revenue it leads to (or not) is surely immaterial.

Whilst not commenting on the validity of the OP, a start-up venture is risky by nature, with many failing before they have even got off the ground...that's the risk you take, but it shouldn't affect whether it is legit or not from an HMRC point of view.

[northernladuk]

I would disagree with this personally. Either something is a valid biz expense or not...the amount of revenue it leads to (or not) is surely immaterial.

Whilst not commenting on the validity of the OP, a start-up venture is risky by nature, with many failing before they have even got off the ground...that's the risk you take, but it shouldn't affect whether it is legit or not from an HMRC point of view.

If you read the ruling posted you would see otherwise. There has to be some common sense applied here as what one person would think is a valid business expense in their little world really isn't. A line has to be drawn where the piss starts to be taken in anything like this.