Business expenses

[maz3916]

We are a small business and are currently under investigation by IR. During the year in question we subcontracted work out as we were very busy. Can we claim this as an expense. The company we sub-contracted the work out to no longer trades as they went bust. We have invoices to prove that work was carried out by them on our behalf, however would this be enouqh to satisfy the tax inspector. Kind regards for any feedback I recieve. Thank-you

[jpcentral]

Subcontractor costs are a legitimate business expense. The two problems you may have are if the subcontractor was not registered (and therefore not known to the Inland Revenue) in which case the inspector may not believe that the subcontractor actually existed, or the status may be questioned in which case the inspector could argue that the subcontractor should have been an employee and look to you for payment of tax and NI.

John Perry
Central Business Services
Loughborough
www.centralbusiness.co.uk

[maz3916]

Thank you for that it has been very helpful.