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

[Boo]

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?

Neither of those things are remotely relevant, being entirely incidental. The test is whether the purpose of the expenseable cost is wholely business related. Eg. If you have to stay away for business purposes then the fact that you were able to get some personal shopping in is not relevant, even if the shopping trip is one that you would have had or chosen to make anyway.

This crops up a lot and it's worth re-stating that incidental benefits are not considered when determining whether the purpose of the trip is wholly for business use. Of course is your trip has dual purpose business and pleasure then the expense is not allowable, but the simple solution to this is to ensure that the purpose is wholly business related.

Again, if you go on a business trip, for strictly business reasons, and take advantage of the fact that you are away to get work done on your house then that is incidental and does not affect the expensability of the costs.

The law does not require you to wear a hair shirt in respect of business expenses, it just requires that they are incurred wholly for business purposes. If you have a problem deciding the issue then all you need to do is ignore the private incidental benefits and see if the expense stands up as wholly business related. If it does then you're in the clear, if not then not.

It's really not difficult...


Boo

[Wanderer]

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.

An accountant once told me that I could claim anything I liked, but when it got investigated (as it will be sooner or later) the expenses may get disallowed and I would have to pay the tax owed with interest and penalties of up to 100%.

I'm not suggesting that you are on the fiddle but it's difficult for me to understand why you needed to go to a hotel in a particular area to do find inspiration for this work. What line of work are you in?

[shoes]

I'm not suggesting that you are on the fiddle but it's difficult for me to understand why you needed to go to a hotel in a particular area to do find inspiration for this work. What line of work are you in?

I was writing software. I found it easier in that environment, I was more productive.

You can claim a proportion of the cost to heat your home if you've a home office, because you want a warm room to work in. Its not absolutely necessary, you could be cold instead. But that's allowable. You can purchase an accounting software package to make yourself more productive, is that allowable if an abacus will do?

I've taken the view that it is for me to determine, as the person running my business, how to spend the businesses money. If I want to put my lead developer (me) in an environment in which they are more productive, I will, and since that is solely for the purposes of my business it is an allowable expense.

That's what Ive decided. I've taken some advice, but that's my decision. HMRC may choose to take a different view, should they look into it. Im fine with it.

[SueEllen]

I was writing software. I found it easier in that environment, I was more productive.

You can claim a proportion of the cost to heat your home if you've a home office, because you want a warm room to work in. Its not absolutely necessary, you could be cold instead. But that's allowable.

Don't be daft.

HMRC expect you to use some common sense.

Clearly if it's 5 degrees Celsius outside then you are expected to keep the workers of your company in a reasonable temperature to work.

You can purchase an accounting software package to make yourself more productive, is that allowable if an abacus will do?

Likewise with the accounting software - you aren't going to buy something that you can do VAT calculations, invoices if it's intention is not to make your business run more efficiently.

I've taken the view that it is for me to determine, as the person running my business, how to spend the businesses money. If I want to put my lead developer (me) in an environment in which they are more productive, I will, and since that is solely for the purposes of my business it is an allowable expense.

That's what Ive decided. I've taken some advice, but that's my decision. HMRC may choose to take a different view, should they look into it. Im fine with it.

If you can justify it fine.

If you have difficulty working at home why don't you rent out external office space? You can rent it out by day, week or month depending on what you need.

You have to remember HMRC people are civil servants and have a limited imagination - so actual office rental would be much easier to get pass them than a hotel room.

[shoes]

You have to remember HMRC people are civil servants and have a limited imagination - so actual office rental would be much easier to get pass them than a hotel room.

I guess, but should I be basing business decisions on what some public servant might think? I think people can be too wary of them, we know more about our business than they do. For a contractor I guess there is a culture of fear relating to HMRC, which is a shame; THEIR shame.

I think it's potentially a borderline case, but only because HMRC might have difficulty understanding it, not because it isn't for my business. Their incompetence shouldn't be my problem.

Thinking pragmatically, no-one will ever look at it. And if they do, Im comfortable in my argument.

[Wanderer]

I was writing software. I found it easier in that environment, I was more productive

Ahh go on then, HMRC will love that one. Let us know if you get away with it once HMRC have investigated your expense claims because we will all be at it if you do.

[Zippy]

Thinking pragmatically, no-one will ever look at it. And if they do, Im comfortable in my argument.

I believe the other posters are being pragmatic, in that they are suggesting it's cheaper to keep yourself squeaky clean. If you are investigated for this I think your productivity could take a very sharp dive.
GL!

[shoes]

I appreciate the qualified accountant opinions, Im giving less weight to those of the bums on seats disguised employees pretending they have a business, but thanks anyway!

[NotAllThere]

Most of us wouldn't check into a hotel for the sake of it - if we could save money by being at home, we would. If shoes can show the fruit of his labour, it seems reasonable enough to me. Why not? It's a risk, but so long as you're aware of the risks, and are prepared to defend the expense as entirely business, then go for it.

Checking into a hotel in the Maldives simply increases the likelihood of HMRC rejecting the claim. If the hotel was in Staines, that'd be a different matter.

[GillsMan]

I appreciate the qualified accountant opinions, Im giving less weight to those of the bums on seats disguised employees pretending they have a business, but thanks anyway!

Yet another poster who asks a question, doesn't get the answer they want to hear, and then gets a bit moody with those giving advice.

FWIW, I'm not a bum-on-seat contractor either, so I'm perfectly happy to offer my opinion. I don't think your claim would fly with HMRC, and to be perfectly honest, I'd hope it would fail. Not because I have a problem with you or anything like that, but because, to be frank, claims like that take the piss.

There is no business reason for the stay in a hotel. Your excuse that you needed to be in a more creative environment is, frankly, nuts. It smacks of someone "needing a break" or "change of scenery" which are not, in themselves, wholly business expenses, nor should they be. In any other business, if an employee came up and said "I'm struggling with this C# code, I need time to think, will you pay for a week in a hotel please boss", you'd wet yourself laughing before denying the request.

Stop kidding yourself, your stay in the hotel was not necessary for the running of your business. If you're the businessman you think you are, just pay for the hotel out of your own pocket.