Self Employed Travel Expenses Passport

[roundthebend]

Neither myself or my partner have a passport. Mine ran out 14 years ago and his around 8 years ago. We have never even contemplated needing a passport or going abroad, preferring to holiday in the UK. Unfortunately, as the economy in the UK is so dire, it may become nesessary for us to travel to Europe to secure sales.

Ashould this prove to be the case, would the cost of the passport be a valid business expenditure?

Thanks in anticipation.

[mullet]

I would say it is not allowable for two main reasons:

Firstly, having been involved with your previous posts, the information provided suggested that there may well be duality of purpose in your trip(s) abroad. If dual purpose expenditure cannot be logically apportioned, then the strict statutory position prevails i.e. that the expenditure is not allowable.

Secondly, even if it is claimed that it is for business use only, in practice a non-business element must exist. The passport could in the future be used for personal travel. It can also be used as an identification document.

And finally, even if it was allowable, there is a logical argument that the cost of the passport £77.50 should be spread over ten tax years since it has a ten year life. Remember that the effect of deductions is that you don't literally get the money back from HMRC - you get tax relief at your highest rate of tax. So assuming 20% liability the relief in terms of "money in your pocket" would be £7.75 @ 20% = £1.55 per year.

I cannot believe that I have gone into so much detail over something with a potential tax saving of £15.50!

[roundthebend]

I would say it is not allowable for two main reasons:

Firstly, having been involved with your previous posts, the information provided suggested that there may well be duality of purpose in your trip(s) abroad. If dual purpose expenditure cannot be logically apportioned, then the strict statutory position prevails i.e. that the expenditure is not allowable.

Secondly, even if it is claimed that it is for business use only, in practice a non-business element must exist. The passport could in the future be used for personal travel. It can also be used as an identification document.

And finally, even if it was allowable, there is a logical argument that the cost of the passport £77.50 should be spread over ten tax years since it has a ten year life. Remember that the effect of deductions is that you don't literally get the money back from HMRC - you get tax relief at your highest rate of tax. So assuming 20% liability the relief in terms of "money in your pocket" would be £7.75 @ 20% = £1.55 per year.

I cannot believe that I have gone into so much detail over something with a potential tax saving of £15.50!

Sorry msp ... I was reading a thread on doctors certificates last night which called the question to mind - Tax certainly is intesersting ,,, maybe I'll retrain

I appreciate what you have given above BUT ... is the private element not "incidental" ... after all I have not needed or wanted a passport for 14 years ...

And you responded BTW because you enjoy being an excellent tutor

[mullet]

Even if the private element is incidental, there is still the argument that the cost should be spread over 10 years. But at the end of the day I just hope that no-one in HMRC would be so petty as to seek a retrospective adjustment on something which costs the Exchequer £15.50. Or £31, since it involves both of you!

Be aware of discussing something like this face to face or in correspondence with an advisor. The associated fees would surely be more than the tax saving.

[roundthebend]

Ahhhh ... So that's why my Accountant always had all the time in the world for me ... a big smiley face ... and would also go some way towards explaining my enormous bills

Thank you for your time and patience again msp ... one last rhetorical question ...


















I suppose the dogs passport is also disallowed

[Incredulum]

The dog passport is clearly disallowed, unless he is a tool of your trade.

And I suggest the existence of the dog's passport goes some way towards suggesting a duality of purpose in your own passports.


Were it not for that, I should quite happily say it is tax deductible. I think any benefits are incidental, given OP has not ventured abroad for many years.

[roundthebend]

Hi Incredulum … what if I said she was our guard dog I guess that might work until HMRC investigated and realised she’s a Yorkie

As for the duality of purpose (on a serious note for a minute). I got her when I first became self employed and so she has known nothing other than being with us both for the last 12 years. Although it’s a right pain in the ass we can’t leave her with anyone so she has to come everywhere with us (one of the reasons we’ve never holidayed abroad ).

Should we need to go to Europe it really will be a pain as we don’t just have her but also 2 birds that have to travel with us as we can’t find them a home .

Although I was joking about the dogs passport and was half tongue in cheek about ours ... I did think it was an interesting question about the passports generally and thanks again for your input.