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Where Taxpayers and Advisers Meet

Expenses - Ltd co director

HarryWest
Posts: 4
Joined: Sun Mar 27, 2016 6:17 pm

Expenses - Ltd co director

Postby HarryWest » Fri Jul 24, 2020 10:51 pm

An age old question with lots of vagueness but.... what is admissible in terms expenses claims before a red light goes on with HMRC? Such as:
Say director flys on business, can wife and even kids accompany them and expense travel, hotel, meals etc? What substantiation needed to justify reason for travel?
Client entertainment - meals out with client, hotel stays, entertainment are fine and typical. But are there rules of thumb where families come along too etc?
What other areas tend to get a lot of attention?

Thanks

wamstax
Posts: 1910
Joined: Wed Aug 06, 2008 3:39 pm
Location: Operate Nationally but based in Aberdeen
Contact:

Re: Expenses - Ltd co director

Postby wamstax » Sat Jul 25, 2020 2:34 am

Yes vagueness in your question and so open ended that you're unlikely to get a specific answer on a public forum that you could rely on. Why you would expect to be able to deduct the cost of your family's holiday abroad while you go on an alleged business trip I do not know. Perhaps your answer is to get an experienced tax adviser on a client/adviser relationship basis who would be able to consider all aspects of your business and personal life and might be bale to advise you on a basis that you could potentially rely on.

Of course you could try looking at HMRC's internal guidance manuals but needless to say a little knowledge is dangerous and you might read into things that are not there or miss something that could be material to your considerations of allowable expenses versus benefits in kind etc etc.

You could if you felt the need start some bed time reading at the following https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim37000

but remember the rules can be different depending on the traders status and there might be benefits chargeable in respect of expenses that were not incurred wholly exclusively for the purposes of earning the profits or a trade and additionally "necessarily incurred" in the case of an employee.

Of course you might also be best to read up on the HMRC enquiry manual if you decide to incorrectly claim tax deductions that you are not entitled to deduct or omit income/benefits that you enjoy as being a director or employee.

You will also need the Company Taxation Manual in case there is some effect on corporation tax or other duties e.g. S455 for overdrawn participators current account etc. Given that you are clearly a director of a company you would be best to discuss such matters with the company tax adviser BEFORE you incur the expenses.
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact (mob 07751720507) can be obtained from websites

darthblingbling
Posts: 351
Joined: Wed Aug 02, 2017 9:09 pm

Re: Expenses - Ltd co director

Postby darthblingbling » Sat Jul 25, 2020 11:24 am

FYI HMRC have been targeting companies recently who have an entertaining nominal on their accounts but have no PSA in place that covers staff entertaining.


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