people charging in a social dinner as business expense

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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

You can't claim tax break on lunch/corporate dinners, etc. So what does it matter?

It depends. I worked in a department where a lot of staff worked from home but travelled in and stayed at HQ sometimes. Often they would meet a friend for dinner and charge that, but they were entitled to as they were away from home and would have charged whatever they ate to the company. If they're in the same city as their house YANBU.

Oh so you allow fraudulent expenses? These are obviously not from working away from home as the receipts will be within 30 miles of normal place of work.

Only for employees though tobysmum not for non-employees and if he's the only employee (and is a director) then he probably can;t even claim for himself.

Entertainment provided only for directors can;t be reclaim unless sustenance on a trip away.

He isn't ripping the country off.. he just thinks he is.

You could point this out to him publically the next time he does this.

I don;t know any accountant who "allow" this. It would get posted to "entertainment" and most modern accounting systems would automatically deduct it from a VAT return and any accountant would put it into "add backs" on a tax return.

Im about to meet a rep in a coffee shop after patients at lunch time. Self employed i never knew you can claim back for my coka cola.... Might spalsh out and get a cake or do they buy.

Well she seems to think she gets away with it, says claimed under entertaining clients.

Why have people started assuming she is a he?

And as a director he would be confirming to his accountants that he is responsible for the veracity of all the information he's given them.

I strongly suspect that he thinks they are tax deductible which they use to be back in the day when I was a baby book-keeper. In fact its probably having very little effect as the only people he's "defrauding" are his own company by paying himself expense money at the expense of the company which he owns anyway.

Because once someone says "he" we all pick up on it like sheep!

I don't know though kew how an accountant would know. DH just has a Christmas party budget each year as I understand it. That said it's only going to work once .....

Entertaining clients isn;t allowable either and hasn't been for many many years.

She probably thinks she's getting away with it because her accountant hasn;t explicitly said to her "you can get a deduction for entertaining" and she probably hasn't looked at the tax returns she get sent where the tax add back is shown for entertaining (or she'd be the first client if she did in my experience)

"you can't get a deduction for entertaining"

Yes Toby the Xmas party is hard to prove. HMRC if investigated would expect you to name the people who attended, for them to be on the payroll and to tally with the number of people on the bill.

Ultimately its up to the directors to be honest.

And if people think that HMRC don't check things - I've had 3 compliance checks this year by HMRC on different areas of tax - and I only have 6 clients!

As others have said, you used to be able to do this, so perhaps old habits die hard.

Additionally, some people are keen to pay because of getting credit card loyalty points (although these are mostly down the drain too now).

To be honest I would worry more about the amazons of the world than a few small companies maybe/maybe not saving a couple of quid here and there.

And HMRC spending time and effort investigating tiny little companies and sole traders for such small amounts is probably costing tax payers more money than what they recover.

It all adds up though. Once you start allowing tax evasion at low levels it becomes pervasive pretty quickly

This is one way people try and get money tax free - get reimbursed for expenses that aren't business related.

If they are claiming they are legitimate business expenses that is tax evasion. If they are claiming as entertaining it will be tax neutral.

One of my clients had a tax investigation last year. We thought there might be a little bit of tax payable, only as a result of errors, no intention to defraud.

HMRC thought they had struck gold, but ultimately accepted every answer provided, and no tax or penalties were payable.

This sort of thing fumes me. I work in a restaurant and have found the most popular fraud to be several people from the same table asking for copies of the bill so that they can claim they paid. I have got to the point where I have told all staff not to do this and make up some bullshit excuse to why we can't print another bill because apparently 'I don't want to abet your wrong doing' isn't an acceptable answer.

My most rage inducing experience was an NHS dinner for 10 upper management types with a final bill of over 1500 quid. Honestly don't know how they get away with it.

what has been described is what caused a massive storm when MP's were caught doing it....

I don't think it's a swindle from a company tax perspective but from an income tax one. I'm in Ireland where there is a huge differential in the rates. So if you take friends out for dinner and put it through your company as an entertainment expense. It won't be deductible for corporation tax so you'll pay 12.5% on it. If you pay it personally the effective higher income tax rate is 51%, so to pay a say €200 bill you'd have to have earned €400. If it's not really a business expense them it should really be considered a BIK.

Laymedown - you are right of course but the difference isn't so great in the UK.

And yes of course if it isn't a business expense it should be a BIK. I have also just treated certain "entertaining" as a directors loan if its very obvious it wasn;t business related.