I have just taken on a bookkeeping job for two directors who have just moved to the UK from the EU and are not used to the UK laws.
So far they have been expensing all their food - breakfast, lunch and dinner on the company.
How much of this can I reasoanbly claim as subsistence? Some of the dinners are quite expensive £100+. Obviously if there are others present I have not claimed tax and put down as business entertaining, but quite a few are literally just the two directors having lunch/ dinner everyday.
Any help greatly appreciated as trying to get them to cut down on spending let alone keep receipts is proving a real headache!
Only those expenses incurred wholly, neccessarily and exclusively for the business are allowable.
We eat to live, we do not eat for the benefit of the company. They would have eaten a meal regardless as to whether or not they were on company business therefor the meals are not allowable expenses.
I would be careful on the entertaining expenses as well as only entertainment expenses are allowable where they benefit of employees (and their partners). Not sub-contractors, associates, customers or suppliers.
A handy BIM on this one is 37670. Have a read of the first paragraph in this link to the HMRC website.
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Thanks Shamus, very helpful. I thought this would be case, but as the people spending the money are the same people who own the company its hard to stop them spending!
For these expenses how do you think I should code them therefore - a personal expense that they need to pay back to the company a, i.e. Directors Loan account. Or can I put through as general or subsistence but not claim the tax back?
The business entertainment I have put through the companys accounts but just not claimed the VAT back - i.e. zero rated the bill. Is this correct?
Our company directors are planning a trip abroad to discuss board matters.
I am sure on the issue that non of these expenses will be VAT reclaimable for VAT input purposes, but i was also wandering whether there is any issue putting the entire cost of the recipts through the company as a business expense i.e. will this be an allowable business expense or is it entirely personal and to be kept out of company accounts?
Are they planning the trip abroad to discuss business with an overseas client or or they planning the trip abroad to discuss business with each other?
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Thanks so much for the quick reply! They are going abroad to discuss business just with each other. Only the 3 company directors will be involved no overseas clients or customers.
Some time ago accountants used to advise small business owners that they could have their AGM anywhere in the world and that justified putting the cost through the company. It may be that your directors still remember such advice and think that it remains acceptable (not even sure that it was acceptable when it was still being advised!).
Afraid to say that there is no legitimate business reason why the meeting cannot be held in their offices so if they want to go ahead with this then the expense of the trip is down to themselves, not the company.
If the company does pay for it then it is a benefit in kind, not a tax free jolly.
lol, I almost feel sorry for them as I've now got this vision of them standing in the office all excited in their shorts and water rings ready for their high powered meeting.
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Thanks for that, yes you have hit the nail on the head really! Unfortunately as i suspected.
If they are hell bent on charging it to the company cards what would you recommend posting as? still going under 'bus entertainment'? A judgement call i know, but your advice would be really appreciated.
personally I would be dropping the expenditure on this that they are putting through the company to the individual directors DLA's.
kind regards,
Shaun.
p.s. I'm liking all the kisses. Are we an item? xxxx.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Just when I thought that my addiction to wedding cake is cured they just keep pulling me in again.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Ooops.... From past experience I've discovered that there is no way to come out of this scenario well so I'm just off to skulk away and hide in a darkened corner.
Also discovered that its a good idea in such situations to wear a cricket box at all times.
I'm still sure that there was supposed to be cake at some stage before the divorce.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Your just trying to tempt me out of my darkened corner aren't you... I know what happens next.... Then again, cake.... lol
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
xxxx.
