Setting up as a business

Skidder · 28 Sep 2011 at 13:05

Robbie G said:
You only need to be away from your place of business to reclaim the VAT on food, not out of the country .

Why have you posted the same link twice?

I was referring to the whole meal in a restaurant being allowable as an expense

Scrutinize · 28 Sep 2011 at 13:06

Skidder said:
My accountants are whiter than white and there is no way in hell they let me include any food unless I'm travelling oversees

yea sorry, ignore me, i didn't post what i was trying to say.

food cost incurred outside of the home as a result of undertaking business activities (including domestic UK) = yes

food at home = no; but what you can do is set a reasonable overhead based on your charge-out rates and build costs like this into it, especially if it benefits you financially even though you won’t officially be charging for it. i.e. if you were setting you overhead at 1.15 and you could set it at 1.2 then you would (still probably doesn’t make sense but hey)

mattyg · 28 Sep 2011 at 13:06

smoove said:
Cant you opt out paying class 2 NI if your turnover is below a certain amount? I remember i did this when i started in 2009.

Not Turnover but Income.

but it is only £2.50 or so a week so its hardly gonna break the bank

Skidder · 28 Sep 2011 at 13:08

mrk1@1 said:
yea sorry, ignore me, i didn't post what i was trying to say.

food cost incurred outside of the home as a result of undertaking business activities - yes

food at home = no but what you can do is set a reasonable overhead based on your charge-out rates and build costs like this into it if it benefits you financially even though you won’t officially be charging for it. i.e. if you were setting you overhead at 1.15 and you could set it at 1.2 then you would (still probably doesn’t make sense but hey)

I inherently charge my clients for my food and my mortgage and my holidays etc!

I'm not a contractor I have a small specialist economics firm

Skidder · 28 Sep 2011 at 13:09

mrk1@1 said:
food cost incurred outside of the home as a result of undertaking business activities (including domestic UK) = yes

my accountants don't like me including dining say in London, even taking colleagues out

Participant · 28 Sep 2011 at 13:10

mattyg said:
wholly and exclusively is the key word to claiming anything as a business expense.

Not anything. Cars for example, can be available for private use but still claimed as a business expense.

Skidder · 28 Sep 2011 at 13:12

Robbie G said:
Not anything. Cars for example, can be available for private use but still claimed as a business expense.

but the mileage you include is when you are using it wholly for business

Participant · 28 Sep 2011 at 13:14

Skidder said:
but the mileage you include is when you are using it wholly for business

That's a bit of a tangent. I was just referring to mattyg saying that wholly and exclusively applies to anything; it doesn't.

edscdk · 28 Sep 2011 at 13:15

Skidder said:
but the mileage you include is when you are using it wholly for business

I'd say anything that could remotely be classed as business without being a blatant lie but yes...

Scrutinize · 28 Sep 2011 at 13:16

Skidder said:
I inherently charge my clients for my food and my mortgage and my holidays etc! I'm not a contractor I have a small specialist economics firm

it is worth noting, that the items you can legitimately expense and importantly, how you account for these will also be dependent on what your company does. a good accountant will be able to maximise these intricacies for your financial benefit.

mattyg · 28 Sep 2011 at 13:16

Robbie G said:
That's a bit of a tangent. I was just referring to mattyg saying that wholly and exclusively applies to anything; it doesn't.

Give a couple of examples

Skidder · 28 Sep 2011 at 13:18

mrk1@1 said:
it is worth noting, that the items you can legitimately expense and importantly, how you account for these will also be dependent on what your company does. a good accountant will be able to maximise these intricacies for your financial benefit.

I know I have a decent accountant who understand my business well (big name not that that is everything), they ought to be decent anyway they're expensive enough!

mattyg · 28 Sep 2011 at 13:20

Robbie G said:
Not anything. Cars for example, can be available for private use but still claimed as a business expense.

But you can't put private use as a business expense

Scrutinize · 28 Sep 2011 at 13:22

Skidder said:
my accountants don't like me including dining say in London, even taking colleagues out

Skidder said:
I know I have a decent accountant who understand my business well (big name not that that is everything), they ought to be decent anyway they're expensive enough!

that is fair enough then,

as a small business or sole trader, some claims may be a bit too transparent, but i am surprised you can’t claim for entertaining clients within reason. i could appreciate it being more complicated if your business would not require this type of hospitality in conducting its normal activities.

mattyg · 28 Sep 2011 at 13:23

mrk1@1 said:
that is fair enough then,

as a small business or sole trader, some claims may be a bit too transparent, but i am surprised you can’t claim for entertaining clients within reason. i could appreciate it being more complicated if your business would not require this type of hospitality in conducting its normal activities.

I think If you can prove it led to more work then its ok. Although surely it could just be eaten up as advertising

The problem is it can be seen as "Entertaining" which is NOT a business expense

Vonhelmet · 28 Sep 2011 at 13:27

Just get your own accountant. It'll be easier than sifting through a billion posts, and you'll have someone to blame at the end of the day.

Skidder · 28 Sep 2011 at 13:41

mrk1@1 said:
that is fair enough then,

as a small business or sole trader, some claims may be a bit too transparent, but i am surprised you can’t claim for entertaining clients within reason. i could appreciate it being more complicated if your business would not require this type of hospitality in conducting its normal activities.

I've always thought it's a bit conservative but TBH it doesn't happen very often at all and most of my clients are abroad so it's a non-issue when I see them anyway. I also have reimbursable expenses for food in my contracts (whenever I can get away with it!) so eat well while travelling for work!

My main company is an LLP

Scrutinize · 28 Sep 2011 at 14:12

mattyg said:
I think If you can prove it led to more work then its ok. Although surely it could just be eaten up as advertising

The problem is it can be seen as "Entertaining" which is NOT a business expense

Skidder said:
I've always thought it's a bit conservative but TBH it doesn't happen very often at all and most of my clients are abroad so it's a non-issue when I see them anyway. I also have reimbursable expenses for food in my contracts (whenever I can get away with it!) so eat well while travelling for work!

My main company is an LLP

if you can demonstrate that it is hospitality (you wouldn't use the term entertainment) and forms part of business development then you can justify it.

this may require you to have a very clearly defined business development, marketing and company expense policy which works both ways as it; enables you to undertake such activities but also sets out a prescriptive approach which of course limits some good old ad-hoc pub time with your colleagues. for example you could pre allocate £2k in your annual budgets and business plan for hospitality and business development, it would be poor performance not to meet your own kPIs

Skidder · 28 Sep 2011 at 14:15

mrk1@1 said:
if you can demonstrate that it is hospitality (you wouldn't use the term entertainment) and forms part of business development then you can justify it.

this may require you to have a very clearly defined business development, marketing and company expense policy which works both ways as it; enables you to undertake such activities but also sets out a prescriptive approach which of course limits some good old ad-hoc pub time with your colleagues. for example you could pre allocate £2k in your annual budgets and business plan for hospitality and business development, it would be poor performance not to meet your own kPIs

sounds very credible way to approach it, thanks.

edscdk · 28 Sep 2011 at 15:01

mrk1@1 said:
if you can demonstrate that it is hospitality (you wouldn't use the term entertainment) and forms part of business development then you can justify it.

this may require you to have a very clearly defined business development, marketing and company expense policy which works both ways as it; enables you to undertake such activities but also sets out a prescriptive approach which of course limits some good old ad-hoc pub time with your colleagues. for example you could pre allocate £2k in your annual budgets and business plan for hospitality and business development, it would be poor performance not to meet your own kPIs

nice, fancy doing my accounts?