Can a CC yearly fee be a business expense?

[Bristol spark]

Quick question.

I have a Personal Amex that is only used for business purchases, and has a £150 annual fee.

Can this fee be put through the books as a business expense?

Thanks

[Devilstreak]

No as its a personal card. Even if you state you only use it for business expenses.

[sgrimshaw]

Basically, pretty much anything can be put through the business.

Whether it is allowable for tax purposes is a different matter.

Edited by sgrimshaw on Tuesday 17th May 21:57

[Ean218]

Devilstreak said:

No as its a personal card. Even if you state you only use it for business expenses.

How can you answer without even knowing whether it is a sole trader/partner/limited company?

[Eric Mc]

Devilstreak said:

No as its a personal card. Even if you state you only use it for business expenses.

Wrong.

HMRC recognises that costs incurred in a personal capacity may have a business related relevance attached to them. They refer to this as "dual purpose" expenditure. In these circumstances, HMRC expects the taxpayer to split the cost between "business" and "personal" on a reasonable basis. In this case, it looks like the OP is using a card which is ostensibly a "personal" card but is using it 100% for business, in which case the "reasonable split is -

Business Use - 100%
Personal Use - Zero %

[trickywoo]

Eric Mc said:

Wrong.

HMRC recognises that costs incurred in a personal capacity may have a business related relevance attached to them. They refer to this as "dual purpose" expenditure. In these circumstances, HMRC expects the taxpayer to split the cost between "business" and "personal" on a reasonable basis. In this case, it looks like the OP is using a card which is ostensibly a "personal" card but is using it 100% for business, in which case the "reasonable split is -

Business Use - 100%
Personal Use - Zero %

Bit sweeping IMO. OP says used for business purchases but normally a card with a fee will have other benefits. HMRC may well question why OP has a personal card (with possibly personal and not business benefits attached) that never gets used for personal activity. If OP can say hand on heart that he hasn't benefited personally from the card then fine.

[jamoor]

trickywoo said:

Bit sweeping IMO. OP says used for business purchases but normally a card with a fee will have other benefits. HMRC may well question why OP has a personal card (with possibly personal and not business benefits attached) that never gets used for personal activity. If OP can say hand on heart that he hasn't benefited personally from the card then fine.

personal card is cheaper than a business one
business refused credit

could be a multitude of reasons.

[ashleyman]

Bristol spark said:

Quick question.

I have a Personal Amex that is only used for business purchases, and has a £150 annual fee.

Can this fee be put through the books as a business expense?

Thanks

If the card is a business registered card and is being used 100% as a business card then yes. If a percentage of that is personal then you'll have to work out the percentage and not claim for it.

If it's a personal card being used for business then you might need to have the company pay you for the fees via re-imbursment and then have that repayment expense as a business fee which can be put through books.

[trickywoo]

jamoor said:

personal card is cheaper than a business one
business refused credit

could be a multitude of reasons.

Could be but Amex do a number of free cards so why pay a fee if there is no benefit?

Just playing devils advocate

[Eric Mc]

If the business is a limited company rather than a sole trader, then using a personal card for business purposes is more complicated.

[Eric Mc]

trickywoo said:

Bit sweeping IMO. OP says used for business purchases but normally a card with a fee will have other benefits. HMRC may well question why OP has a personal card (with possibly personal and not business benefits attached) that never gets used for personal activity. If OP can say hand on heart that he hasn't benefited personally from the card then fine.

The OP said it was 100% for business use i.e NO personal use.

[trickywoo]

Eric Mc said:

The OP said it was 100% for business use i.e NO personal use.

100% business purchases - he said nothing about benefits. He could be getting airport lounge benefits for his holidays etc

Point is what is the fee for? Must be some benefits, are they only business? Not saying they aren't but its a valid point.

Edited by trickywoo on Wednesday 18th May 11:29

[Eric Mc]

The benefits are worth nothing if they aren't availed of.

The rules talk about "business use v' private use". If the benefits are not availed of, there can be no private use.

Or does HMRC tax people on "potential"?

[trickywoo]

Eric Mc said:

The benefits are worth nothing if they aren't availed of.

The rules talk about "business use v' private use". If the benefits are not availed of, there can be no private use.

Or does HMRC tax people on "potential"?

How do you know they aren't availed of?

Why is OP paying a fee for nothing?

[Eric Mc]

I go on what the OP said - business use only.

If the OP is not telling the full truth, that is obviously a different scenario.

[trickywoo]

Eric Mc said:

I go on what the OP said - business use only.

Business PURCHASES only - thats very different to use. I keep coming back to why he is paying a fee when he doesn't have to.

We won't known until OP responds.

[Countdown]

trickywoo said:

100% business purchases - he said nothing about benefits. He could be getting airport lounge benefits for his holidays etc

Point is what is the fee for? Must be some benefits, are they only business? Not saying they aren't but its a valid point.

Edited by trickywoo on Wednesday 18th May 11:29

How exactly would HMRC prove that he had availed himself of benefits, AND then work out the taxable element? It's negligible. they have far bigger fish to fry.

If OP was to show them a year's worth of CC statements with evidence to confirm that all the expenses were used in the course of business that would be fine. HMRC have better things to do than quibble over annual CC fees.

[LordHaveMurci]

Eric Mc said:

If the business is a limited company rather than a sole trader, then using a personal card for business purposes is more complicated.

In what way Eric? I've been doing this for many years with the blessing of our Chartered accountant, the Company pays off the card directly rather than going through my personal account.

[trickywoo]

Countdown said:

How exactly would HMRC prove that he had availed himself of benefits, AND then work out the taxable element? It's negligible. they have far bigger fish to fry.

If OP was to show them a year's worth of CC statements with evidence to confirm that all the expenses were used in the course of business that would be fine. HMRC have better things to do than quibble over annual CC fees.

This is the rub and truth be told I'm having a little fun with Eric. He quite often gives advice on here to the letter of the law when in reality there probably isn't an account in the land who would advise their actual clients the same way.

On this occasion Eric was on the other side of the fence and I took the opportunity to have some banter.

[Eric Mc]

trickywoo said:

Business PURCHASES only - thats very different to use. I keep coming back to why he is paying a fee when he doesn't have to.

We won't known until OP responds.

I think you are being too literal in your interpretation of the word "Purchases". I take it that the OP meant "costs" rather than just "Purchases for Resale".

He needs to clarify.