Can I claim this as legitimate expense?

[Steamer]

I work as a freelance contractor and I've been invited away for a week with a client that I work for.

Although they are picking up most of the bills, can I still claim for things like travel insurance and a few rounds of drinks that I'm sure I'll be paying for?

Obviously its great to be asked on the trip, but it will be costing me a whole weeks work while I'm away.

[anonymous-user]

Steamer said:

I work as a freelance contractor and I've been invited away for a week with a client that I work for.

Although they are picking up most of the bills, can I still claim for things like travel insurance and a few rounds of drinks that I'm sure I'll be paying for?

Obviously its great to be asked on the trip, but it will be costing me a whole weeks work while I'm away.

What's more important?

[Eric Mc]

First of all there is the general rule regarding claiming business expenses as allowable tax deductable costs - i.e. the expense must have been incurred wholly and exclusively for the prurpose of the trade. If the expense falls into that category then the expense is normally allowable.

However, special rules relate to "entertaining" expenditure. TYhe basic rule is that "entertaining" is NEVER allowable, even if it satisfies the general "wholly and exclusivity" test as outlined above. There are some exemptions for "staff entertaining" but entertaining customers, suppliers or other "outsiders" will usually not be claimable.

[Steamer]

Eric Mc said:

... the expense must have been incurred wholly and exclusively for the prurpose of the trade....

Thats the bit I was questioning.

Although work will be discussed on the trip, and by me being there it will secure future work... that doesnt really forefill the required 'wholly and exclusively for the purpose of the trade'.

So its a no then.

[JonRB]

It's worse than that Steamer. Are you going as a Supplier tendering for work or is it a staff jolly that you have been invited along to because you're "one of the team". Because if the latter then you are in danger of being considered "part and parcel" of your client's organisation which is really bad for IR35.

Edited by JonRB on Tuesday 27th January 09:49

[Steamer]

JonRB said:

... staff jolly....

I think thats the phrase used by certain members within the organisation, yes

Just a non-production week for me though. I better make sure the topic of conversation does cover tendering those up-and-coming projects by the sounds of it!

[Eric Mc]

Are you self-employed or do you operate through your own limited company?

[Steamer]

Eric Mc said:

Are you self-employed or do you operate through your own limited company?

Self employed - sole trader.

[Eric Mc]

Steamer said:

Eric Mc said:

Are you self-employed or do you operate through your own limited company?

Self employed - sole trader.

That at least removes any IR35 implications (as mentioned above). It also removes any problems regarding declarations that might need to be made on the Employer's P35 end of year return.

Essentially, any element of the expenditure that YOU incur and you DESCRIBE as Entertaining will not be an allowable cost in your business accounts - under the blanket ban on "entertaining" as an allowable cost.

[Steamer]

Eric Mc said:

Steamer said:

Eric Mc said:

Are you self-employed or do you operate through your own limited company?

Self employed - sole trader.

That at least removes any IR35 implications (as mentioned above). It also removes any problems regarding declarations that might need to be made on the Employer's P35 end of year return.

Essentially, any element of the expenditure that YOU incur and you DESCRIBE as Entertaining will not be an allowable cost in your business accounts - under the blanket ban on "entertaining" as an allowable cost.

I thought that would be the case, but its always worth checking.

Many Thanks for reading - and thanks for the advice Eric.

[JonRB]

TBH, I would be more than happy to wind up my company and go Sole Trader if clients and agencies would allow it, if only to side-step IR35.

Unfortunately it's not an option because the aforementioned agencies and clients will only deal B2B.

Anyway, glad to hear IR35 isn't an issue for you Steamer.

[skwdenyer]

JonRB said:

TBH, I would be more than happy to wind up my company and go Sole Trader if clients and agencies would allow it, if only to side-step IR35.

Unfortunately it's not an option because the aforementioned agencies and clients will only deal B2B.

Anyway, glad to hear IR35 isn't an issue for you Steamer.

It isn't their choice (the clients and agencies) - it is the only way for them to avoid a potential liability for taxation. Stupid, yes, and unhelpful, but there we are.