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Franchise licence fee

Hello

Happy Jubilee weekend to all.

My client paid £14500 plus vat for a franchise licence fee. Is it tax deductible?

Thanks

SA

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04th Jun 2012 13:35

Many variables

The questions to ask yourself are:

Is the agreement, or to what extent is the agreement, capital and/or revenue expenditure?Is the Client a Limited Company and if so do the IFA2002 rules apply to the Capital element?If it is a Company and IFA2002 applies, can AIA apply? (Not sure here)

I'm sure there'll be more, but be careful as to treatment, it may well be questioned by HMRC.

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By BKD
04th Jun 2012 14:13

Have a look ...

... at BIM57620

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05th Jun 2012 18:43

Generally, No.

I started as a franchsie and the 'fee' £5,000 was not allowable - I was told this by the inspector himself. However the 'training' element, also £5 k was. The invoice from the Franchisor actualy would have allowed me to claim the lot, but I was young and hones...errr... stupid then, and told it how it was.

I've learnt since and have now recuoped the initial outlay many times over (not as  a franchise however).

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