Reply to: Expenses - pushing the envelope

[speling bee]

I completely agree. A good approach.



I would argue he doesn't but there you go.



I did lol

Well, you did ask for it, perhaps.

He knows if he is legit or not.

[northernladuk]

I am a simple man in such matters. My starting point is that if something is a genuine business expense I will incur it through the business and not worry about it and document it properly. I am not concerned that I have bought two laptops within 12 months as there is a genuine business need. Why would my business not do it?

If something is not a genuine business expense, I don't incur it through the business even if I think that I might be able to make a case that it si or otherwise get away with it. I believe that a straightforward approach is the best.

I don't want to sit across the table from one of Her Majesty's finest umming and erring about why a particular train ticket is being claimed for. And indeed I don't want to cheat the system. But I am not going to fret about genuine expenses, unless there are clear rules to the contrary (e.g. 24 months rule).

I completely agree. A good approach.

The OP knows whether this is genuine expenditure to turn a profit for his business or not. If it is, do it and if it isn't don't. But if you do, document it properly and have a business plan.

I would argue he doesn't but there you go.

I claim no expertise but you did ask.

I did lol

[PorkPie]

Im going to do a tourism site for Slough. Might have to visit for a week.

Good luck soldier. You may not return. Fair thee well.

[speling bee]

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.

I am a simple man in such matters. My starting point is that if something is a genuine business expense I will incur it through the business and not worry about it and document it properly. I am not concerned that I have bought two laptops within 12 months as there is a genuine business need. Why would my business not do it?

If something is not a genuine business expense, I don't incur it through the business even if I think that I might be able to make a case that it si or otherwise get away with it. I believe that a straightforward approach is the best.

I don't want to sit across the table from one of Her Majesty's finest umming and erring about why a particular train ticket is being claimed for. And indeed I don't want to cheat the system. But I am not going to fret about genuine expenses, unless there are clear rules to the contrary (e.g. 24 months rule).

The OP knows whether this is genuine expenditure to turn a profit for his business or not. If it is, do it and if it isn't don't. But if you do, document it properly and have a business plan.

I claim no expertise but you did ask.

[psychocandy]

Im going to do a tourism site for Slough. Might have to visit for a week.

Easily get away with this one with HMRC because no-one visits there for the fun of it!

[captainham]

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.

Fair do's, I didn't read the ruling but now perhaps I will

[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.

[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.

[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'

[BA to the Stars]

He could always become an MP

[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.

[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

[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.

[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.

[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.