Hotel stay.. Not strictly necessary but still for the business, valid expense?

[shoes]

I've stayed in a hotel for a week or so because I needed a change of scene to help with creativity. I was there for the purpose of working on my companies software products, in an environment I found condusive to making progress. I plan on having this hotel stay paid for by the company... But strictly speaking I guess it wasnt absolutely necessary as I could have done this work anywhere.

Valid as an expense?

[Clare@InTouch]

An expense only has to be 'wholly & exclusively for the purposes of the trade' to be allowable for CT. Was there any private element to this at all? Did you get any personal benefit from it, such as being local for a night out or leaving your own house vacant for the builders?

If you think you can justify it to HMRC if they asked, then in theory you can claim it.

It often helps to think about how you'd feel if your employee requested you pay for the same thing. Would you allow it, if you had to fund someone else doing it?

[Pondlife]

I find I am most creative when sitting on a beach in the Maldives. Something to do with the clean air and all inclusive G+Ts.

Obviously if I never took holidays I'd burn out, so they are in fact wholly a requirement for me to be able to run my company effectively and deliver for my clients.

[speling bee]

I find I am most creative when sitting on a beach in the Maldives. Something to do with the clean air and all inclusive G+Ts.

Obviously if I never took holidays I'd burn out, so they are in fact wholly a requirement for me to be able to run my company effectively and deliver for my clients.

HMRC accepted my Dutch rent boy expenditure on this basis, so go for it.

[shoes]

An expense only has to be 'wholly & exclusively for the purposes of the trade' to be allowable for CT. Was there any private element to this at all? Did you get any personal benefit from it, such as being local for a night out or leaving your own house vacant for the builders?

If you think you can justify it to HMRC if they asked, then in theory you can claim it.

Well whether it can be justified to HMRC is my question I guess. I know it was for the purposes of my business, I was there to work, were it not for my requirement to write software I wouldn't have been there.

As for having a private element and personal benefit, well no not really except it was quite a nice place to be. But as an employee Ive stayed in hotels because I was in the area for a conference, or training - when the hotel had a pool, I used it. Does that mean it can't be claimed? The company certainly saw the accommodation cost as allowable. It's not clear cut in my opinion.

Also, I didn't, but what if I did have the builders in at the same time? If they happened to be scheduled for that time should I have moved the appointment to a less convenient time? It's all a bit silly... 'No fun or convenience allowed' seems like a silly rule, but one that some HRMC folk probably use as a guide, sadly.

It often helps to think about how you'd feel if your employee requested you pay for the same thing. Would you allow it, if you had to fund someone else doing it?

Perhaps im an employer that values their employees, whether or not Im generous shouldn't affect the tax implications?


It all seems rather fuzzy to me.

[shoes]

I find I am most creative when sitting on a beach in the Maldives. Something to do with the clean air and all inclusive G+Ts.

Obviously if I never took holidays I'd burn out, so they are in fact wholly a requirement for me to be able to run my company effectively and deliver for my clients.

Not quite my question, but thanks for being so funny, you should be on tv. You can claim for a proportion of your household bills if you have a home office, if you work in a hotel why not claim for that 'office' as well? Why does it matter where it is? It's up to the business owner if how they spend their companies funds.

Again, 'no fun allowed' is silly and rather depressing.

[Clare@InTouch]

Being generous DOES have tax implications though. You can spend £3000 on them at Christmas if you want to, but they will then be taxed on it for example.

There is a specific HMRC example regarding a hotel cost not being allowable if it was incurred because the employee had to move out for a week to allow building work to be done.

In theory, this could be viewed on the same basis as an office. If you rented an office for a week then there'd be little argument it would be ok. But as it's a hotel then your motive is under more scrutiny. Was it exclusively for the trade, or because you needed to escape the wife for a week?

Ultimately, if HMRC wrote to you and asked you to justify it, could you in all seriousness argue that it was 100% business related? I think it would be difficult, but maybe not impossible.

[Pondlife]

I needed a change of scene to help with creativity.


Sounds like a holiday to me.

[shoes]

Being generous DOES have tax implications though. You can spend £3000 on them at Christmas if you want to, but they will then be taxed on it for example.

There is a specific HMRC example regarding a hotel cost not being allowable if it was incurred because the employee had to move out for a week to allow building work to be done.

In theory, this could be viewed on the same basis as an office. If you rented an office for a week then there'd be little argument it would be ok. But as it's a hotel then your motive is under more scrutiny. Was it exclusively for the trade, or because you needed to escape the wife for a week?

Ultimately, if HMRC wrote to you and asked you to justify it, could you in all seriousness argue that it was 100% business related? I think it would be difficult, but maybe not impossible.

Ok, well thanks for your responses, interesting. I believe the problem lies at HRMCs end!

I think it can be viewed as an office, I was carrying out my work in the room, I was only there because I had this work to do... its up to me what my business spends its money on. Maybe a grumpy HMRC drone wouldn't approve, I can always pay it back.. If it gets queried, which is unlikely.

I won't do it much.

[shoes]

I needed a change of scene to help with creativity.


Sounds like a holiday to me.

I was working in the hotel room, on my companies products. Im not a disguised employee.