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

If you don't think you can claim for this bag, why don't you just put it on your Christmas wish list? I'm sure there is someone - a parent or a partner - who would be delighted to have you come up with an idea for a Christmas present for yourself, they are probably racking their brains right now!

I think you might be able to claim though, as 'tools' or 'uniform' maybe.

*Do it OP! Because if you don’t someone else will. I have a friend that landed herself a new job and she requested that she’s put up in a more expensive hotel.....

Why shouldn’t you?*

Because it's fraud.
Because it's illegal.

Some people murder other people, does that mean we all should? Ffs

@NoIDontWatchLoveIsland

*Do it OP! Because if you don’t someone else will. I have a friend that landed herself a new job and she requested that she’s put up in a more expensive hotel.....

Why shouldn’t you?*

Because it's fraud.
Because it's illegal.

Some people murder other people, does that mean we all should? Ffs

Fuck! The hyperbole.

What’s your qualification to decide it’s fraud (and akin to murder)?

its the VAT she's attempting to claim back as a business expense, i.e 20%. Not the entire cost of the bag right? People get that right?

It's a handbag. Look at the pictures. And she has made clear in posts that she knows full well it's a stretch to consider it wholly and exclusively for the purposes of the trade.

Knowingly claiming tax deductions that you are not entitled to, yes, I would call that fraud. It's minor in scale but it does not change the nature of what is being contemplated.

Ps the reference to murder was in response to "if you don't someone else will". To emphasise that just because some antisocial individuals do things does not mean we all should.

pinpinbin

its the VAT she's attempting to claim back as a business expense, i.e 20%. Not the entire cost of the bag right? People get that right?

I can't be bothered to trawl through the whole post, but I thought it was tax? No mention of VAT from OP?

@pinpinbin

its the VAT she's attempting to claim back as a business expense, i.e 20%. Not the entire cost of the bag right? People get that right?

No

The business would pay 100% of the cost of the bag
If it pays VAT or doesn't pay flat rate the business could claim back the VAT
If the bag cost £100 the business would have less profit to pay tax on (amount less depends on VAT)

@pinpinbin

its the VAT she's attempting to claim back as a business expense, i.e 20%. Not the entire cost of the bag right? People get that right?

Depends if the OP is VAT registered.

VAT isn't an area of my expertise, but reclaiming VAT on business expenses, more or less, follows the same rules. The expenses needs to be wholly and exclusively for the purpose of the trade.

You can expense it through your accounts if you want but it will have to be added back for your tax calculation as a non deductible expense. A hand bag has way too much personal use attached to it.

I have an acquaintance who sailed pretty close to the wind ( self employed ) for business expenses. So ( not the real thing but an example ) chair - so I think for a proper desk chair to do his job - probably OK - as it was a smart chair for sitting room - not OK )

There will be those better placed to say but I believe HMRC over the last number of years spend less on checking your tax form ( so more self assessment ) but they will do spot checks & I would not like to be caught for claiming things which are not within the guidelines.

It relies on honesty in filling out the forms and not thinking - what can I get away with. Of many bodies , HMRC is not one I would like to get on the wrong side of.

Having seen a picture it looks fine. It is a large workbag not a handbag.

Can you offset a % of the cost of the bag on your expenses? Like you might do for outsold utility bills if you work from home?

I've flicked through the responses and couldn't see anyone who has linked to the definitive position (i.e. Courts) so I'll throw this link in here to the HMRC guidance and discussion of the case Mallalieu v Drummond:

www.gov.uk/hmrc-internal-manuals/business-income-manual/bim37910

Important bit to read:

"... no deduction is available from trading profits for the costs of clothing which forms part of an ‘everyday’ wardrobe. This remains so even where the taxpayer can show that they only wear such clothing in the course of their profession. It is irrelevant that the person chooses not to wear the clothing in question on non-business occasions, the only question is whether the clothing might suitably be worn as part of a hypothetical person’s ‘everyday’ wardrobe."

If it helps. I'm chartered. I work in personal tax and no, I would not let you claim that as an expense. I would double down on that no since you've posted a picture of it since it is clear it can form part of an everyday wardrobe.

Just put it down as a laptop case

@rosie1959 and @CrotchBurn - No don't put it down as a lap top case - it clearly is not

Alarae

You don't wear a bag - it's not the same as clothes.

@rosie1959

Just put it down as a laptop case

That's not how it works, it isn't a laptop case!

@CrotchBurn I bought and expensed this bag that fits a 15” laptop knomo.com/products/maddox-laptop-tote-120-204-blk. It was a few years ago with brighter colours but a laptop bag nonetheless. You’ll be fine really.

@houselikeashed

Can you offset a % of the cost of the bag on your expenses? Like you might do for outsold utility bills if you work from home?

No.

There are rules for apportioning costs of utilities etc if you work from home. (Private residence used for business purposes)

But this doesn't apply to clothing/wardrobe. As the PP linked above, if the item can be used as "everyday" wardrobe (even if you don't wear/use it in your personal life) then it doesn't not qualify for tax purposes.

For example, just off the top of my head, Jane Smith is a self employed construction consultant. She visits construction sites. Jane buys a high-vis jacket.
A high-vis jacket is not considered "everyday wardrobe". Therefore Jane may be able claim the cost as a business expense.

[quote BasiliskStare]**@rosie1959* and @CrotchBurn* - No don't put it down as a lap top case - it clearly is not[/quote]
Do you think someone will come from HMRC to inspect a couple of hundred quid bag to see exactly what it is

@LivingOnAnIsland

I know the particular item was about clothing, but it's the duality of purpose principle which is important. To be honest, HMRC would probably use that extract from the case anyway for a handbag, as it is more akin to an everyday item then something specifically designed for a laptop.

Alarae

Duality of purpose is covered by 'wholly and exclusively' - if it's exclusively used for business, there is no duality of purpose.

Clothing is a special case, as illustrated by Mallalieu v Drummond. If it's not clothing then Mallalieu v Drummond is irrelevant.

@rosie1959 - No I do not think someone will come and inspect one bag at all - but self assessment relies on honesty & there are spot checks - so just look up the rules and abide by them . I am sure people "get away" with stuff but why would you try to ?