Flying as a Contractor - tax relief?

[psychocandy]

Cant see HMRC being happy though.

So you claim for a trip to Dubai? Surely the first thing they're going to ask is what business did you get out of this huge expense then?

If you can point out that spending £1000 has now gained you £100k of business the fair enough.

But think about it. Would a small business at home risk £1000 in this way on something else with the small possibility that they 'might' get business. Debatable.

[prozak]

You think every expense or meeting wins you business?

As someone earlier said - what would a "real" business do?

More people need to recognise that you are in business. Not taking risks and approaching every opportunity from a point of view of whether HMRC will like it is NOT what a real business does. Worrying about this sort of thing is exactly what a person pretending to be a business does.

If it is totally business related the expenses are fine. Not an issue.

If you are inspected and HMRC argue about it and you lose - only then you should worry about it. And you are no worse off than you would be now. I doubt that would happen though.

[northernladuk]

My non-professional (IANAA) advice is as always.

What would a proper business do?
Do that, because you are a proper business.

You could argue a proper business would have a video conference rather than fly someone abroad for tentative business with this level of cost. Face to face isn't as essential as it used to be in this day and age.

[JamJarST]

You could argue a proper business would have a video conference rather than fly someone abroad for tentative business with this level of cost. Face to face isn't as essential as it used to be in this day and age.

That's not an argument against the allowability of the expenditure, it's argument about fiscal responsibility.

[prozak]

You could argue a proper business would have a video conference rather than fly someone abroad for tentative business with this level of cost. Face to face isn't as essential as it used to be in this day and age.

I could argue the other way.

Face to face wins business.

Video or Teleconf tells them you aren't that serious about building a relationship and don't see them as important enought for a face to face meeting.

[speling bee]

I've been out to tender for a client for a 250k contract. One of the bidders clearly went to considerable expense in preparing the bid and sending 4 people to the pitch on peak time trains. They took a risk and won some business. We need to chill out a bit.

[psychocandy]

You think every expense or meeting wins you business?

As someone earlier said - what would a "real" business do?

More people need to recognise that you are in business. Not taking risks and approaching every opportunity from a point of view of whether HMRC will like it is NOT what a real business does. Worrying about this sort of thing is exactly what a person pretending to be a business does.

If it is totally business related the expenses are fine. Not an issue.

If you are inspected and HMRC argue about it and you lose - only then you should worry about it. And you are no worse off than you would be now. I doubt that would happen though.

Of course not.
But swanning off to Dubai does look dodgy IMHO.

Not saying it cant be genuine its just that its going to attract HMRCs attention and you need to be ready to justify it.

[psychocandy]

I could argue the other way.

Face to face wins business.

Video or Teleconf tells them you aren't that serious about building a relationship and don't see them as important enought for a face to face meeting.

OK. Look at it another way.

Multi-national business turning over millions. Blowing £1000 on the slim chance of getting a huge contract = acceptable.

Small business turning over say £100-£200K spends £1000 = more difficult to argue that it was an acceptable business decision.

[prozak]

OK. Look at it another way.

Multi-national business turning over millions. Blowing £1000 on the slim chance of getting a huge contract = acceptable.

Small business turning over say £100-£200K spends £1000 = more difficult to argue that it was an acceptable business decision.

Less than 1% of yearly revenue is a good risk in my opinion. Especially if the meeting could turn into more than 1 year or the opportunity sounds like you could bring in sub contractors.

10% of revenue is another level and maybe not as easy to justify.

[northernladuk]

I could argue the other way.

Face to face wins business.

Video or Teleconf tells them you aren't that serious about building a relationship and don't see them as important enought for a face to face meeting.

That's bollocks I am afraid. The world has moved on since that type of thinking. It's not totally gone I agree and multimillion pound pieces of work could hold true. One a one man PSC? No chance. They will appreciate the value to effort isn't worth it so in some cases VC is perfectly acceptable.