Reply to: Team lunch business expense?

[Contreras]

Thanks again for your responses.

The general feeling appears to be it would be ok to put the cost through the business but not as a tax deductible expense. This would therefore be classed as an "entertaining expense" which is perfectly acceptable (within limits) with HMRC if the aim of the entertaining is to increase value to the business, for example, aiming to secure a new contract.

Genuine bribes are classed under different rules.

[MrMarkyMark]

IMO absolutely correct.

And as I said I'd ask why you are bothering. If I had a contractor boss and a load of contractors went out I'd full expect to pay my own way. It makes no sense for the boss contractor to pay. Permie thinking that is.

+1 having led teams of up to 10 contractors, everyone just chips in.
Usually, me having involvement in the recruitment, means they are all more than happy with what they get as a day rate

[northernladuk]

It therefore appears to me to be a difficult argument to win if the tax man comes asking.

IMO absolutely correct.

And as I said I'd ask why you are bothering. If I had a contractor boss and a load of contractors went out I'd full expect to pay my own way. It makes no sense for the boss contractor to pay. Permie thinking that is.

[Saint John]

Thanks again for your responses.

The general feeling appears to be it would be ok to put the cost through the business but not as a tax deductible expense. This would therefore be classed as an "entertaining expense" which is perfectly acceptable (within limits) with HMRC if the aim of the entertaining is to increase value to the business, for example, aiming to secure a new contract.

However, the 2nd link posted by Northernladuk (thank you for this) states:

"HMRC defines entertainment expenses as those costs you incur when providing either subsidised or free hospitality to clients or staff. Examples of entertaining, whether it is for staff or clients, could include but is not limited to the following: food and drink, theatre or concert tickets, sporting event tickets and use of company assets such as executive suites."

However, my entertainment is neither for clients nor staff, simply for the contractor team that I supervise.

It therefore appears to me to be a difficult argument to win if the tax man comes asking.

[SueEllen]

they/you had. Not sure if the OP had missed it by his last post.

Every time I read posts by certain posters I suddenly have lots of sympathy for their accountants.

[Lance]

I thought myself and other posters had answered that already?

they/you had. Not sure if the OP had missed it by his last post.

[SueEllen]

I think the answer was to do it as entertainment rather than an expense. So you can claim it personally from your CO, but it's not an expense you can get CT relief on.

I thought myself and other posters had answered that already?

[Lance]

As my team are not employees of my company, it appears there could be a risk in putting lunch through as a business expense. If there is a spare seat at the table, I'll be back in touch x

I think the answer was to do it as entertainment rather than an expense. So you can claim it personally from your CO, but it's not an expense you can get CT relief on.

[missinggreenfields]

I think I know who you are. I'll take this up with you offline next week.

or ?

We have a right to know!

[Alan @ BroomeAffinity]

I think I know who you are. I'll take this up with you offline next week.

[Saint John]

Many thanks for all the responses, it really is appreciated.

Northernladuk - I have not asked my accountant as I have lost all faith in them since an issue arose in the summer regarding my mortgage application. The lender was waiting for my accountant to complete a form before issuing the mortgage offer. I emailed and phoned them over the course of a few weeks. I received little response to my emails and no response to any phone calls. Luckily it was sorted out in time for the house purchase to go through but a very nerve racking time all the same.

Of course, I raised a complaint with the director of the company who acknowledged receipt of the complaint and promised to respond by the end of the week. That was in August and despite some chasers, no response has been forthcoming. The company also promise to have finalised accounts within 3 months of my business year end - which was in April. I'm still waiting.

The company is Broome Affinity if you are wondering. It appears they may be in the process of setting up Cloudaccountingco which would explain why they don't have any time to deal with their existing clients.

Anyway, I'm a bit off topic and appear to be venting some anger.

Thank you all again for your responses to my post. As my team are not employees of my company, it appears there could be a risk in putting lunch through as a business expense. If there is a spare seat at the table, I'll be back in touch x

[TheCyclingProgrammer]

My company event had my wife (shareholder) and daughter.

Whilst there's no rule that says the guests have to be staff/relations, HMRC would consider it taking the urine. They would likely go through everything in the company accounts, as it would clearly not be a mistake, and whilst arguably legal, anyone who does this is likely to have done some things that aren't.

The rule isn't that ambiguous. You can invite non staff to a company annual event so long as the event is primarily for your employees.

In practice that's an easy rule to adhere to if you have 50 employees and invite a handful of clients and suppliers but if it's just you and your spouse I agree that inviting anyone else is likely to be considered taking the piss!

Also remember if you exceed the £150/head limit you're liable to pay tax on the whole value not just for yourself but of any family or household members attending.

[MrMarkyMark]

I think that's more a case of legal necessity, it being an absolute requirement of any company director...

Very true.
However, I was explicitly on about bending the rules.

What others consider "acceptable" behaviour I often don't.

As 90% of my family are self employed we have had both HMRC and the VAT man camped out for a week, at our house, on more than one occasion.

[malvolio]

...
In my view its the same as making your accounts above board and ship shape.

I think that's more a case of legal necessity, it being an absolute requirement of any company director...

[MrMarkyMark]

My company event had my wife (shareholder) and daughter.

Whilst there's no rule that says the guests have to be staff/relations, HMRC would consider it taking the urine. They would likely go through everything in the company accounts, as it would clearly not be a mistake, and whilst arguably legal, anyone who does this is likely to have done some things that aren't.

Very good point Lance .

The way I always look at it is, if you bend the rules they will find them easily once they start looking. They will then go through absolutely everything.

Its the same point with trying to get your contract IR35 shipshape, the contract is the 1st place they (HMRC) come looking, so is your first point of "defence".
In my view its the same as making your accounts above board and ship shape.