people charging in a social dinner as business expense

(46 Posts)
stolenview Thu 04-Jun-15 19:03:00

This has happened q few times with friends of friends. They collect receipts after dinner out with friends to claim as a business expense.

Aibu to be pissed off with this? They are self employed so think it allows them to pay less tax

TreadSoftlyOnMyDreams Thu 04-Jun-15 19:04:37

Yep. F##ks me right off!

PHANTOMnamechanger Thu 04-Jun-15 19:06:03

I had a colleague whose DH used to do this! we were teachers and at end of term meals etc when we all put our money in, he would be the one who went and paid (I think possibly pocketing our cash and putting it on his business credit card). I was young and inexperienced but knew it was a fiddle and was too shy to say anything, but it made me angry and uncomfortable!

Stealthpolarbear Thu 04-Jun-15 19:06:04

ts cheek yes

Stealthpolarbear Thu 04-Jun-15 19:06:35

ts cheeky yes

Stickerrocks Thu 04-Jun-15 19:07:51

You don't get any tax relief on entertaining. It may reduce their profits, but it's disallowed in calculating their tax. They can't reclaim any VAT either, so they're wasting their time.

stolenview Thu 04-Jun-15 19:08:11

Surely it's more than just cheeky, it sounds like fraud to me

Grumpyoldbiddy Thu 04-Jun-15 19:09:05

Pisses me off too.

YaTalkinToMe Thu 04-Jun-15 19:09:17

You cant claim entertainment as an expense for self assessment confused

PHANTOMnamechanger Thu 04-Jun-15 19:10:39

stickerrocks - so why are they doing it/what is the scam? I'm sure the bloke I knew always wanted a VAT receipt?

PHANTOMnamechanger Thu 04-Jun-15 19:11:56

the man I knew owned his own business, rather than being a self employed one-man-band, if that makes a difference??

YaTalkinToMe Thu 04-Jun-15 19:13:25

www.gov.uk/expenses-if-youre-self-employed/marketing-entertainment-subscriptions

I think you can reduce your VAT bill for regular staff events if open to all staff, we pay VAT and sure I read something about that somewhere but do not do it so not completely sure.

HormonalHeap Thu 04-Jun-15 19:14:31

Dh and I have friend's in dh's line of work who he does business with. Dh gets company tickets to all the main sporting events and puts it down as entertaining. Such a grey area as he actually IS entertaining- even though we are also friends! I doubt we are the only ones who do this.

YaTalkinToMe Thu 04-Jun-15 19:16:52

Hormonal
I do not really see it as a grey area, is it wholly for the purpose of business? From what you describe, it does not sound like it.

YaTalkinToMe Thu 04-Jun-15 19:17:30

www.smallbusiness.co.uk/financing-a-business/accounts-and-tax/2464582/entertaining-in-your-business-can-you-claim-tax-relief.thtml

charleybarley Thu 04-Jun-15 19:29:44

Message withdrawn at poster's request.

stolenview Thu 04-Jun-15 19:31:22

No they are ripping of the country, they are directors of their own companies where they and their other half are the only employees

Stickerrocks Thu 04-Jun-15 19:35:13

Lots of people put it in their accounting records in the hope it will be overlooked & they'll claim tax relief on it. Any decent accountant makes the correct adjustments to add it back when the tax liability is calculated. There are different rules for staff entertaining. Your friends should be careful in case it comes back to bit them on the bum. HMRC spend far more time & effort investigating these sorts of tax claim than chasing larger cases.

QuiteLikely5 Thu 04-Jun-15 19:37:11

According to that link you CANNOT claim tax back on entertaining other people.

You can claim it back for yourself if you're a director or the company can claim it back for you as an employee.

Not for others though. Their cost is not allowed to be included.

So relax those of you who thought someone was benefiting from them!

HormonalHeap Thu 04-Jun-15 22:37:40

YaTalkinToMe does that mean that if Dh meets someone through his business he gets on with, wives get on, we have to stop entertaining as we enjoy eachother' company?

Ok I'm I'm being naughty. But that's what I meant about being a grey area.

HormonalHeap Thu 04-Jun-15 22:40:00

CharleyBarley he is self employed director of his own company

Stickerrocks Thu 04-Jun-15 22:40:58

Entertaining your friends is absolutely fine, claiming tax relief on it isn't. wine

LuisSuarezTeeth Thu 04-Jun-15 22:45:38

Are the friends-of-friends called David, George and Iain?

stolenview Fri 05-Jun-15 06:49:10

Oh I know they are only claimingfor themselves and not the whole group. Still stinks to me. Hopefully their accountant ignores these!

AuditAngel Fri 05-Jun-15 07:18:44

Trust me, we don't ignore it, we add it back in the tax workings grin

Honestly, if I am away (employee/director not business owner) then my meal can be claimed for. If I take out a client, I pay, work pay me back, they don't get tax relief as it is a disallowable expense.

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