Is it fair to split meals 50/50 if one person claims it all on expenses?

[mrsbeeton999]

Im not self employed so not sure how it works but my besties bf and her take it in turns paying for meals and drinks out. He expenses everything so effectively never spends a penny. His work is a lot of entertaining clients. She’s not bothered by it but I’m judging him as a CF. Am I correct or misunderstanding how self employed expenses work ?

It's fraud.

It's definitely tax evasion.

Wow.

Do you know they are claiming your half back?

Well it's tax evasion unless she's also his customer. But he still has to pay. He isn't not spending a penny.

Well, if he's self employed he is paying for it, isn't he.

But the tax man would be rather unimpressed.

Yes

I realise he shouldn’t be claiming it as it’s not work but also think he’s really cheeky as she’s spending her hard earned money taking him out but he never actually spends anything on her so it’s as though she is more invested in the relationship than him if that makes sense

And the time she spent £80 cash on a meal he took the receipt off the table at the end of the meal presumably to claim that too 😮

@ColitisSucks

Well, if he's self employed he is paying for it, isn't he.

But the tax man would be rather unimpressed.

This ^

But he does spend his money. Counting it in his expenses means he pays a little less tax, but that amount wouldn't cover what he actually spent.
Having said that, it's not right to do this all the time with a friend.

@mrsbeeton999

I realise he shouldn’t be claiming it as it’s not work but also think he’s really cheeky as she’s spending her hard earned money taking him out but he never actually spends anything on her so it’s as though she is more invested in the relationship than him if that makes sense

It is tax fraud. But you are wrong about him not spending anything on her. He is actually spending his “hard earned money” on her. The only difference is that your friend is paying income tax on the earned income she is spending, but the boyfriend is not paying income tax on the earned income he is spending on her because he’s claiming it fraudulently to be a business expense.

I’d be turned off enough by that to stop seeing the person.

It's tax evasion, but not unusual.

It doesn't mean he isn't spending anything though.

Say he has £100 and is a basic rate taxpayer. If doesn't claim it as expenses, he will pay £20 tax on it and end up with £80 in his pocket. If he puts £100 in expenses, it will reduce his profit and he will still have spent £100, but won't have to pay the £100 tax.
So all he's gaining is £20, not £100.

@mrsbeeton999

And the time she spent £80 cash on a meal he took the receipt off the table at the end of the meal presumably to claim that too 😮

If I saw my boyfriend doing this, my opinion of him would drop so low he be ditched within a week.

What does your best friend think of his tight-arsed tax-dodging ways?

The tax evasion isn't the only issue here. He's expecting her to pay every other time and making money back off it as well as not being out of pocket when it's his turn?

I'd bin him off for being a CF.

@mrsbeeton999

I realise he shouldn’t be claiming it as it’s not work but also think he’s really cheeky as she’s spending her hard earned money taking him out but he never actually spends anything on her so it’s as though she is more invested in the relationship than him if that makes sense

He is spending though. When you claim something as a business expense it only means you dont pay tax on it. It doesn't mean you don't pay for the thing minus the tax.

But that's aside from the fact that he shouldn't be claiming it at all as she isnt his customer.

Also the rules around entertainment arent that you can just do whatever you like and write it off for tax even if they are clients. You cant just claim routine lunches etc for a jolly.

Thanks for clarifying he’s only gaining 20% - or maybe 40% on this and not getting it free. As a lifelong employee I am a bit clueless!

@DriftingBlue

I’d be turned off enough by that to stop seeing the person.

Me too. Certainly would not marry them! Because tax man can usually come after a spouse for unpaid tax bills especially if you knew your spouse was evading tax and went along with it (was complicit).

If he is an employee, it's a good way for an employee to get rid of him, if they want to - for fiddling expenses.

Entertaining clients is not allowed for tax for the self employed - this kind of entertainment expense is just added back to the net profit in the income tax computation. So say net profit is £100,000 and entertaining clients is £2,000, income is calculated on the £102,000.

Missed out the word tax - should be income tax is calculated....

You can’t claim client entertaining expenses as a tax deduction so not sure how he is expensing it…

@JustAnotherDayWorkingAtHome

You can’t claim client entertaining expenses as a tax deduction so not sure how he is expensing it…

'Misc Expenses' probably. If he's doing his own tax returns I suspect he'll be fudging it a bit.

Exactly. You can claim an odd meal if you are for example having lunch with a financial advisor, or to discuss your business plan, but not for entertaining ‘clients’. He is claiming it because he hasn’t been checked yet but if he will he will have to repay it and possibly pay a fine.

Cheeky cunt. I’d not be impressed by that either. Mind you, I’m not sure his employers would be pleased either.

So he’s pretending that by taking his girlfriend out it’s a business meeting or something related to his business? If so, that’s naughty.