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

@BMW6

I've had two accountants and to be honest I thought they were both pretty appalling. One screwed up a pretty important task which saw me paying back tax. The current one isnt proactive, as in he doesnt give me any tips or insights just completes tasks. He also has a bad habit of talking as if I knew what he was on about.

IMO a good accountant:

1. Preempts and is proactive on the clients behalf
2. Is non-accountant friendly, aka explains stuff in layman terms

@legallybland

I'm sure an MP would consider this a perfectly acceptable expense

Especially if you include a matching duck house. Absolutely a justifiable business expense.

@Ariela
Oh that's quite cute! I might get something like that instead, that's 100% justifiable.

Just for the fun factor I'll try and get some pics up of The Bag now 😂

I would suggest the 60/40 split in votes is more down to the fact most people have never been self employed or worked in accountancy and are voting based on morals of 'big business do it, the papers tell me so' rather than what the law actually is. You can claim for the bag if it has your company logo on it incidentally, it's advertising.

But you can buy yourself a bag out of the profits of your business if you want to, same as the hotel night. But you can't claim the tax on the bag as it's not for business. If the hotel stay is for business, then you can claim the tax whatever. But you can't claim for hotel nights on your holidays, it has to be wholly for business. I pay for quite a few things out of my business account - but I don't put them near the tax man cos they're not wholly business focused.

I agree your accountant sounds a bit shit though. It's worth spending on a good one once so you know what you can and can't get - I do my tax return myself though.

CrotchBurn

I think you may be confusing the 2 issues:

*The purpose of the business expense
*The cost of the business expense.

The purpose of the business expense must fall in line with "wholly and exclusively for the purpose of your trade," test.
The hotel costs may be deductible if you need to stay away from your home for a business reason (not a holiday)
The handbag is a problem because it can be used for your own personal use, so it fails the "wholly and exclusively " test.

The cost is the next issue. Provided the expense is wholly and exclusively for your business, you can pay whatever you want. £400, £40, £50, whatever you want.
BUT - you (the business) needs to pay.

You can deduct the costs from your profits and reduce your tax bill.
But this will also reduce your profits - what you pay yourself from the business.

In other words, the hotel is for business so HMRC says 'crack on and stay where you like'

The bag is not for business. So HMRC says 'buy what you like but don't kid on it's got anything to do with your work.'

I think it is a bit of a grey area actually hence the 60/40 split in votes

It's not a grey area at all. More likely that 40% are giving their personal opinion as opposed to the legal position.

@Parker231 you missed out Accountancy fees, sounds like the OP would benefit for paying for professional accountancy advice

Goodness, @CrotchBurn. Things like apportionment (claiming exoenses gor use of ulyour property and bills based of the portion of it you use for work) is incredibly basic. Decent accountants should be able to handle all this as a matter of course. Its the type ofingirmation we tske in avery first meeting to ensure allthe details are there.i would expect other people to do similar in order to have all the info available to them.
Are you definitely using qualified accountants? - someone foesnt have to be qualified to call themself an accountant in the uk shockingly!

There was a court case way back where a female barrister argued that she should be able to expense her suits because she only wore them for work, where they were compulsory, and she actually hated them.

The judge disagreed and said she could not expense them.

Seems to me the handbag falls under same principle. Which sucks but there you go.

You don't know whether the duck house was challenged in an HMRC investigation.......I would be amazed if it wasn't as it was so widely publicised and an open goal.

OP I'd add 3) Stickler for the rules - it's no skin of his nose if you get picked for investigation (in fact, more money from you in representing him in the investigation) and he doesn't pay the additional tax. You do, win-win for him.

As your current accountant didn't tell you about the allowable expense for room-as-used-for-office I'd get a better one.......

The duck house was nothing to do with tax. It was fully paid for by the tax payer as an MP’s expense.

EveryDay - yes accountancy fees. I’m an accountant but we still use a firm of accountants to do the accounting and tax work on our family business.

@BMW6 , yes she would have to pay, but then she could make a claim against the accountant for wrongly advising her.

I am amazed at some of the things self-employed people are able to claim for - it's worth getting a good accountant who can ensure you don't miss out .

have only just found out I could have been deducting the rent for my office (in my house) as an expense (totally unaware of me I guess but I did assume my accountant would tell me this sort of stuff) If you deduct the rent for your office as an expense, you may find you have to pay Capital Gains Tax on that part of the house if you sell.

References to duck houses etc are irrelevant - that's claiming back expenses from an employer. Not claiming something as an expense to avoid tax.

Put the handbag down as a holdall

@GlamGiraffe
Yep, definitely qualified. But the sort that wont do a single thing more than you ask directly tell him to do. I have already decided to break up with him!

Anyway, thanks for all your thoughts. Since I'm the nervy paranoid sort I'm not going to expense it. But here are the pics to quench your curiosity! Bag plus case.

It has side zippers so you can change the size. :)

When you talk about an accountant, are they or someone in the firm actually tax qualified, or have you gone with a cheap individual who may or may not be a chartered accountant or chartered tax adviser?

@byvirtue

If you can stand up in a court of law and argue your case for the bag then yes I would (chances of that ever happening very low!).

It winds me up when you see the offices of google, Facebook etc with their pool tables, pinball machines etc. All business expenses of course!

Yes,it is annoying. I wouldn’t use a laptop bag outside work.

After a very good year boy accountant told me to buy laptop bags and pens.

@wegetthejobdone
No no, chartered, certs, everything you'd expect.

It's actually partially my fault for not being more assertive. I tend to present as a friendly and v easy going person which sometimes (like with him) doesnt serve me well, as we became very matey and almost friend like, which I think then led to him almost not quite taking me seriously

This is something I'm working on and seeing good results. I hoped a proper woman's bag would add to my journey of seriousness 😂

Love it OP. Can I ask where it’s from?

@CrotchBurn because by and large "So how come companies can put employees up in expensive hotels? Why arent they forced to choose inexpensive chains such as premier inn for example? If it's just about have a basic clean place to sleep overnight on business?

Or employee train tickets? How do they justify first class?"

Most companies do not do this - cheapest fare and cheapest accommodation is typically the norm ( some large companies have a deal with large hotel chains ) - it used to be the case that if you were travelling overnight and had to have a good night sleep for an early morning meeting , they may upgrade. Usually nowadays , cheapest fares.

have only just found out I could have been deducting the rent for my office (in my house) as an expense (totally unaware of me I guess but I did assume my accountant would tell me this sort of stuff) If you deduct the rent for your office as an expense, you may find you have to pay Capital Gains Tax on that part of the house if you sell

This is not actually true if a goid accountant deals with this. It can be dealt with leaving your CGT completely unaffected, all completely legally.