To business expense a handbag

[CrotchBurn]

I am self employed (think graphic designer) and am getting a bit embarrassed of carting around a raggedy rucksack when I go to work spaces and occasionally when I see clients.

I've seen a really nice handbag, theres also a laptop sleeve that goes with it (I mean a matching laptop sleeve but sold separately).

Would I be unreasonable to business expense it? I feel torn because it's kind of me as well as for work stuff

[quote CrotchBurn]@Lockheart
Well am I allowed or aren't I?[/quote]
No you're not allowed. The rules are freely available to read, incredibly easy to find and require no interpretation.

It’s CF if you try and claim it for tax purposes, because that is not allowed by taxation law. If you’re buying it out of your post tax salary, that’s fine. If you’re buying it out of post tax salary and then getting the business to reimburse you, it’s a taxable benefit.

You could expense the laptop sleeve but not the handbag. Unless you could claim it’s a briefcase? I know people who are SE that expense their kids’ motorbikes so I couldn’t get worked up about a handbag! 🤷‍♀️

[quote CrotchBurn]@WorraLiberty
I dont see how its CF. It's my money![/quote]
No, it's the business money and not your money. Using business money to buy yourself a handbag is CF and not something you should be doing.

Just call it a workbag if you have to list it. I don’t think the HMRC employ staff to follow people around checking what you’re using your bag for!

What would you be putting in the bag?
Would you ever use it for non work related events?

@Hoppinggreen

I am SE and I would definitely expense it

Yes. It is a 'tool of the trade' in a manner of speaking.

A functional laptop bag you can probably argue. If you are buying it on an office supplies website and dont expect to use it for non work purposes its probably acceptable.

A mulberry or similar fashion branded handbag that happens to have laptop capacity - nope.

I've never been self employed but would expect the rules would be similar to covering expenses am employer would be reasonably expected to cover. Laptop bag maybe, handbag definitely not.

@CrotchBurn Laptop case yes..Handbag, no. Client won't care if you have a cheap but serviceable handbag, but a good, strong laptop case is different.

MP's claim ridiculous things.

I asked my accountant this and he said if it has the work "laptop" somewhere in the description of the bag that's on the invoice it is fine. Without that, he would send it back to me with a ?

you can insist on it being put though of course on your vat return to save the 20% or whatever it is as the chance of one thing triggering an investigation seems remote but it's a slippery slope ...

The principle here is that a business must be operating with a view to making a profit.

Expenses are deductible against business income for tax purposes where they are "wholly and exclusively" for business purposes. A business would generally not reduce its profits by buying a fancy fashion handbag rather than a basic functional laptop bag - which is why even the biggest companies all provide very functional non branded laptop bags.

It's not a "tool of the trade" because the elements of it that are not necessary for you to carry out your job come at a cost no business would accept.

@Booboobibles

Just call it a workbag if you have to list it. I don’t think the HMRC employ staff to follow people around checking what you’re using your bag for!

But I knew someone {Now RIP} who was investigated by HMRC for pushing the boundaries a bit...and he said it was a total nightmare. They go through everything.

He had to pay a few thousand extra, and never claimed anything again like that.

If Sir Peter Viggers (former MP for Gosport) can claim £1,645 for a floating duck island, then of course you can claim for a handbag.

I presume all the people who say it’s ok, or would expense it, are also comfortable with large companies avoiding tax? Even when it’s not strictly legal?

No?

A handbag would fail the HMRC test “wholly, exclusively and necessarily” .

You can put it through the business but it’s not allowable for tax purposes

you can only claim clothes and accessories if they are company branded like a uniform! sorry

[quote CrotchBurn]@WorraLiberty
I dont see how its CF. It's my money![/quote]
it reduces your tax liability- so it is everyones money

Is it just me that wants to see the handbag?

What bag is it OP?

@AuditAngel

A handbag would fail the HMRC test “wholly, exclusively and necessarily” .

You can put it through the business but it’s not allowable for tax purposes

The chap I knew had put a boat through. A Zodiac. YES it Was used for his work, but because it could be used for non work rides up and down the Thames as well, he had to pay back the 20%.

a handbag and laptop bag with your company logo, possibly.

A random handbag? no

You REALLY don't want to start playing that CF with HMRC!

[quote CrotchBurn]@WorraLiberty
I dont see how its CF. It's my money![/quote]
You can indeed spend your money as you see fit, but the tax you hope to avoid isn't your money

@Hoppinggreen

I am SE and I would definitely expense it

How do you feel about tax avoidance, or tax evasion, by large companies then?

@Booboobibles

Just call it a workbag if you have to list it. I don’t think the HMRC employ staff to follow people around checking what you’re using your bag for!

So what’s your stance if say Amazon or Starbucks lie about the use of an asset to illigally reduce their tax bill?

A bag and sleeve would probably meet the requirements of a laptop bag.

I expense my laptop bags to the company.