No.

but I need to clarify this one as others may apply the answer to other scenarios.

If the above were purchased for the use of all employees of a business (and was available to all of them) then such is allowable expenditure (such as the toilet paper in a multi story office block).

For owner managed businesses where the owner is the only person in the business then the expenditure fails the duality of purpose test in that the expenditure was not incurred wholly, necessarily and exclusively for the purpose of the business but the owner would have drunk the same coffee and gone to the same toilet anyway.

kind regards,

Shaun.

I am going to be very controversial and state that I claim £2 per week for anyone working full time at home, to cover sundry expenses such as this.

Shaun is absolutely correct in the written rules, but such a small amount could be argued that - if one was employed, they wouldn't be at home drinking the coffee and using the toilet roll, and that the employer would have been able to get tax relief for that cost, which no doubt would have been higher. I imagine there would be the odd inspector that might want to dig in their heels but for the sake of £20-30 tax relief, I think its a fair gamble :) All the tax inspectors I have met are very fair and happy as long as you don't take the (insert your own word here)
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I do explain to clients what I have done, what the written rules are, and the chances of it being disputed, so it stays very transparent whilst also showing the client that I am working in their favour.

Hi Joanne

Aw so nice of you to notice! I have been catching up on some garden landscaping work whilst its been dry. It takes such an immense amount of time, the design and measure, going to builders merchants, doing the work myself, waiting for workmen to do their bit.. getting there very slowly, but surely!! I've enjoyed being able to move around, instead of sitting on my bum most of the day! I've got a shocking sun tan!!!!

Have you been enjoying the sunshine??

FoxAccountancyServices wrote:

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Shaun is absolutely correct in the written rules,

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lol. and those Michelle are the only ones that matter.

We ensure that our clients stay within the financial reporting standards and tax rules because anything else would be the equivalent of allowing them to go off and write their own.

In the scenario you are saying that someone who owns their own business does not have to purchase coffee or toilet paper yet employees of businesses whilst getting such free at work would still need to purchase the items for their home (well, unless they steal them from work but thats a whole different debate).

To follow your logic business owners get freebies that they would otherwise have to pay for therefore, unless they have a dispensation for such they need to declare such perquisits on their P11D's.

 

 

Could be that inspectors in your area are either too time pressured or just so used to much worse issues that they are not picking up on everything that they should be.

An accountant freind once told me to always include something really stupid and easy to find in a set of accounts in order to appease an inspector with something to justify their visit otherwise they will keep looking until they find something.

Whilst I could never allow myself to do that , Coffee and toilet rolls for personal use by the business owner would suit that criteria down to the ground.

Of course, if it turned nasty £104 back to the start of the business (if the mistake was intentional there is no 6 year limit to how far back it goes) plus interest, penalties and surcharges soon mounts up.

I had one (an issue over home to work travel) that demanded a cheque for £3000 there and then or the figure that they would be pursuing would be closer to £15,000 once they added everything to what they (incorrectly) believed was owed to HMRC.

Personal view is that every rule and peice of guidance is there for a reason and we ignore such at our own and our clients peril.

By all means counter with alternate interpretations or even alternate guidance (I've come accross cases in the past where the HMRC website had diametrically opposing statements) but we cannot simply discard the rules that we do not like no matter how immaterial the transaction.

Also, all transactions with directors and business owners should be considered material by nature if not by value.

If we hit situations where an inspector has not been able to do their job properly, perhaps due to time constraints, that is no excuse for us to act likewise.

It is not down to us to write the tax laws, only to ensure that our clients know about those that effect them and to obey them.... Or traverse them legally.

I can't disagree with that Mark.

At the end of the day we prepare the clients paperwork on their behalf and if they are adamant that they want to include something and we have advised them the pro's and cons of such then it is their porogative and on their own head be it.

My issue is not with allowing through the occassional arguable borderline call but rather with a systematic approach of claiming a further set sum on top of the use of home as office allowance which is effectively taking it upon oneself to set the tax rules by advising clients of an allowance that does not actually exist.

How many inspections will it pass before one encounters an inspector who does not find such acceptable? And if that happened would that then not win a free inspection for every other client that one represents? Plus potentially risk one's agent status due to the agregate value of lost HMRC revenue based on our advice?

Its like Russian roullette. keep spinning that barrel and eventually the chamber will have a bullet in it.

kind regards,

Shaun.