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Can you claim astrology fees as a business expense?

A friend of mine is a writer. This friend is very 'into' indian astrology and it's remedies, known as yagyas. These are special performances conducted by vedic pundits to bring about specific outcomes, such as to avert problems predicted in a jyotish chart. Indian Astrology is called Jyotish.

My friend paid for a number of these performances, called yagyas, to remedy obstacles seen to the success of my friend's writing from time to time. This is also quite a common thing for Hindus to do, as vedic knowledge including jyotish and yagyas are a well established part of their culture.

It seems to work, as my friend has been published by Time Warner several times, Faber, and more recently Random House. Yagyas were performed specifically to bring about this success at key points in my friend's career, such as when a synopsis was submitted to an editor, or when deciding on a new agent.

My friend pays substantial tax on earnings and wants to offset the not inconsiderable costs (£1000s) of having these yagyas performed for business purposes. Are there accountants specialising in such things.

I know of at least one business where yagya costs were successfully taken into account for UK tax purposes. Have you any knowledge or experience of this. What does the law say?


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Yes, I am an accountant specialising in yagyas ..
... and I foresee that your client hasn't a hope in Naraka, having consulted the oracles: Prince v Mapp; Mallalieu v Drummond; Norman v Golder and others.

The number of people who have read this post is equal to the number of comments - wonder why that is?

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Wholly and exclusively...............
The legislation for allowable business expenditure is in ICTA 1988/s74(1)(a). This states that expenditure cannot be deducted unless it is incurred wholly and exclusively for the purposes of the trade, profession or vocation.

My thinking here is that there may be intrinsic duality of purposes, in that your friend may receive some personal benefit from attending the performances, albeit his reason for attending is to overcome his obstacles in writing.

If there is intrinsic duality of purpose then the revenue will disallow the deduction of the expenses. However I am not familiar with the practice of yagyas and your friend should consider carefully his motives for attending these sessions. If it is solely for the advancement of his business you can argue that the expense is wholly and exclusively for the purpose of the trade.

Furthermore if as you say you know the costs of yagyas have been sucessfully claimed as an expense for UK tax purposes previously, then this is a excellent starting point in your evidence gathering.

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If HMRC were to allow this kind of expenditure, the floodgates would be open for claims for costs of gym membership etc. I wonder if HMRC were aware of the claims in the other cases, or whether the expenditure was not highlighted in the self-assessment returns?

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And next my cat and dog?!
I work so much better now I have my cat and dog, can I claim for the cost of the food, toys, vets bills etc?!
Perhaps someone should suggest to JK Rowling that she checks her costs for such possibilities since she no doubt also pays substantial tax! Her rent / mortgage on her original flat which obviously provided her with the motivation.... The countless cups of coffee she'll have consumed.... No doubt her husband & kids could also be part-deductible as they'll have provided the stability to continue with Harry P.
DVDs are a well established part of my culture so I'm guessing they count too! Come on, lets be a bit realistic here, no wonder the taxman is so inquisitive with this sort of thing going on...

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Why not?
Going back to the previous post regarding wholly and exclusively (and assuming the client could demonstrate that they used the advice wholly and exclusively) why shouldn't they claim the costs as a business expense?

I’m sure HMRC are quite happy to recognise the revenue from yagyas as taxable and they would consider them a benefit in kind if an employer were to pay for a member of staff to receive them. Since they recognise a cash flow with such activities, why should someone not be able to claim them as tax deductible if they are used wholly and exclusively?

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Re Neil's post: If Neil's logic is correct, then I should be able to claim the cost of beer consumed in my working hours, since the vendor will have to bring the sale of the beer into his/her taxable profits?

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How does this sort of intangible service differ from any other form of 'professional advice'? Can it be clearly differentiated from seeking advice from a management consultant, or going to an E-Myth seminar? (which would normally be allowable?). Have HMRC differentiated between office interior designers and feng shui practitioners?

It is impossible to prove that your friend's success isn't due to more mundane factors, such as skill, effort and persistence, but the service is performed to advance the business, whether it works or not, or whether the mechanism is credible. (I don't think it is, but that is irrelevant)

On the other hand, are you happy to keep a client who may sack you if the stars are not aligned propitiously?

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Re Fred's post
The revenue/cost flow isn't the issue, its a case of the services being or not being wholly and exclusively. My pointy about HMRC recognising profits for the provison of yagyas as taxable is more an issue of double standards, if the cost of yagyas can't also be deductable is used in the course of operating the business.

Just because someone or HMRC see's the practice as alternative the main issue is wether or not the advice given relates to the business and is then used in the running of the business. If you buy and then sell stock you can deduct the cost of the stock, if you pay for yagyas and then carry out trade activities as a result of the yagyas why shouldn't you be able to deduct the cost of the yagyas? For all HMRC or we know, the trade may not have taken place if it weren't for the client receiving the yagyas.

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I think this is a really interesting query! I think a better analogy might be with some form of counselling to get over a difficulty. Thinking about it this way, I think HMRC might argue that, even if you could show it was wholly and exclusively, it was an expense which put you in a position to carry out your profession, not an expense of the ongoing profession. Thus, he could not write successfully until he had had the treatment. So if for example he had had little or no work published until he went through this process, this line of argument might succeed for HMRC.
Another analogy might be developing some sort of phobia which inhibited your work e.g. if you developed a fear of flying and being able to go places by plane were essential for your work, then hypnosis or similar to overcome that fear might be allowable, but again maybe just puts you in a position to do the job but is not part of carrying on and earning the profits of the trade (that comes from a tax case, but I forget which!)

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The only issues are duality and capital
Business expenditure is allowable if it is wholly and exclusively laid out for the purposes of the trade, ie it isn't capital expenditure and it has no duality of purpose.

The question of whether the expenditure has any business effect is irrelevant. The law, thankfully, does not get into the effectiveness of expenditure.

So assuming you can chart a course around the duality of purpose counter argument, then the expenditure is business expenditure.

The next issue is then whether 'good fortune' is personal capital or not :-)


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Go for it
The answer is so obvious.

Just claim the lot (also claim for cats, dogs and beer as per the other postings) then get the "vedic pundit to bring about a specific outcome" that he never gets a tax enquiry.

Problem solved !

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