Reply to: "wholly and exclusively for business reasons" with two businesses?

[Batcher]

And TV I bet for Business Presentations

I thought about it but decided it was a step too far at the time

[CloudWalker]

During my IR35 investigation, HMRC actually asked if the laptop I had purchased for the IT Consultancy Ltd company I was a director of was required for the running of the company. How was I supposed to run an IT company without any IT?

When I first started up and registered for VAT, the VATman sent me a "How To" video. I had to go out and buy a VCR through the company so I could watch it

And TV I bet for Business Presentations

[Batcher]

During my IR35 investigation, HMRC actually asked if the laptop I had purchased for the IT Consultancy Ltd company I was a director of was required for the running of the company. How was I supposed to run an IT company without any IT?

When I first started up and registered for VAT, the VATman sent me a "How To" video. I had to go out and buy a VCR through the company so I could watch it

[TheCyclingProgrammer]

I have misunderstood this one somewhere along the line. It hasn't applied to me thus far, so not really an issue I've needed to worry about, but I definitely remember, when I first started contracting, reading an example of a business journey to Edinburgh followed by a trip to Dundee to visit an aunt which rendered the whole journey unclaimable.

I can't remember whether the link was to HMRC, maybe someone will recognise the Dundee reference and remind me where I've got my wires crossed on this.

You've certainly got your wires crossed - only the onward trip to visit family would be unclaimable.

[LisaContractorUmbrella]

Interesting, I've not heard that. I would have imagined that as assets get written off via AIA in year 1 they wouldn't care either way as the tax outcome is exactly the same.......?

True - I'll see if I can get a written opinion from HMRC - just don't hold your breath

[JRCT]

Not true; you can claim relevant expenses for the first leg of the trip.

Get your head around corporate vs personal expenditure.

I have misunderstood this one somewhere along the line. It hasn't applied to me thus far, so not really an issue I've needed to worry about, but I definitely remember, when I first started contracting, reading an example of a business journey to Edinburgh followed by a trip to Dundee to visit an aunt which rendered the whole journey unclaimable.

I can't remember whether the link was to HMRC, maybe someone will recognise the Dundee reference and remind me where I've got my wires crossed on this.

[JRCT]

Now there's an interesting idea. Buy the laptop through Company 1 and then lease it to Company 2 for a reasonable, but nominal fee.

But it wouldn't save you any tax overall as the tax saving for Company 2 would be offset by the tax in the income received by Company 1. It would remove any ambiguity though.

But probably a bit of pointless paper exercise?

Good call. I like that. It seems that it should be an area where common sense prevails, however we are dealing with HMRC potentially and if they notice that I've filled in my corporate tax return for both LTDs with the same pen.......

[TheCyclingProgrammer]

Because that's pretty bloody stupid if you have to carry two laptops around with you when you travel? Not to mention a bit wasteful.

One company could grant another permission to use its assets perhaps, if it were something other than a laptop? Maybe even for a nominal fee?

Now there's an interesting idea. Buy the laptop through Company 1 and then lease it to Company 2 for a reasonable, but nominal fee.

But it wouldn't save you any tax overall as the tax saving for Company 2 would be offset by the tax in the income received by Company 1. It would remove any ambiguity though.

But probably a bit of pointless paper exercise?

[d000hg]

If both need a laptop, why don't they both each buy their own?

Because that's pretty bloody stupid if you have to carry two laptops around with you when you travel? Not to mention a bit wasteful.

One company could grant another permission to use its assets perhaps, if it were something other than a laptop? Maybe even for a nominal fee?

[TheCyclingProgrammer]

But how is that different to me going from home to client 1, then from client 1 to visit my auntie marjorie in Stockport and then home?

In that scenario, I wouldn't be able to claim any of that journey.

Not true. Travel expenses do not have to be wholly and exclusively for business, they can be apportioned.

Travel expenses: general: introduction: expenses do not have to be wholly and exclusively incurred: example

[Clare@InTouch]

Last I heard from our dear friends at HMRC a laptop couldn't be expensed as there was an intrinsic duality of purpose - that's not saying that it couldn't be bought through the business but just that it would be recorded as an asset purchase - would you say that's right Clare?

Interesting, I've not heard that. I would have imagined that as assets get written off via AIA in year 1 they wouldn't care either way as the tax outcome is exactly the same.......?

[TheCyclingProgrammer]

Last I heard from our dear friends at HMRC a laptop couldn't be expensed as there was an intrinsic duality of purpose - that's not saying that it couldn't be bought through the business but just that it would be recorded as an asset purchase - would you say that's right Clare?

First I've heard of that. Personal use of a laptop is not considered significant if it's use is incidental to the purpose of buying it. If you buy a laptop because you need one for your business it's claimable.

[malvolio]

But how is that different to me going from home to client 1, then from client 1 to visit my auntie marjorie in Stockport and then home?

In that scenario, I wouldn't be able to claim any of that journey.

Not true; you can claim relevant expenses for the first leg of the trip.

Get your head around corporate vs personal expenditure.

[JRCT]

Actually I'd say the journey to Client 1 is wholly and exclusively for Ltd 1 and the journey from Client 1 to Client 2 and then home is for Ltd 2.

But how is that different to me going from home to client 1, then from client 1 to visit my auntie marjorie in Stockport and then home?

In that scenario, I wouldn't be able to claim any of that journey.

[LisaContractorUmbrella]

With a laptop you can have some personal use of it, so you could buy it on one company and use it on the other without any issues.

Other assets may be more complex as they wouldn't always have the "insignificant private use is ok" bit.

Last I heard from our dear friends at HMRC a laptop couldn't be expensed as there was an intrinsic duality of purpose - that's not saying that it couldn't be bought through the business but just that it would be recorded as an asset purchase - would you say that's right Clare?