Would a club membership become a benefit in kind?

Would a club membership become a benefit in kind?

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A client is think of joining the Oxford and Cambridge Club. It is a business networking club. He says he will be joining it purely to entertain business contacts and make new ones A major benefit is that he get cheap accommodation (cheaper than most hotels) in New York and Hong Kong, where he does two business trips per annum on average. He can also use the premises to work as there are several desks in the business lounge. He says that there is no personal benefit to himself.

I believe that club memberships are usually not allowable for directors/employees as it’s not on the HMRC approved list (like The Institute of Directors is), although he says that he will not be using it for personal benefit he actually could, and it's not  wholly, exclusively and necessarily... Any thoughts on this?

He asks if it's not allowable, could he charge it to entertainment so he can monitor the cost and then I can make the appropriate deduction when doing the CT returns?

I believe this would give him a BIK. Am I right?

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By pawncob
12th Mar 2012 22:19

Surely

It stands on the facts whatever HMRC may say. If it's a business subscription, it's allowable. Potential personal benefit doesn't enter into it, there has to be actual benefit for it to be assessable.

You mention wholly, necessarily and necessarily, but as he's trading through a LTD, this doesn't apply.

 

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