Deductibility of medical expenses

Deductibility of medical expenses

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A partnership client of mine is undergoing regular physiotherapy at a private clinic on her back. This treatment, she maintains, is necessary as a result of strain she received whilst working and therefore believes that it is a business expense. Over the years (I am compiling 4 years accounts) this has built up to a tidy sum.

I have my doubts on whether it is deductible, but am not sure. I suppose if it can be directly linked to the work it would be deductible if paid on behalf of an employee so perhaps she is right.

More generally, what do others do when a client is insistent an expense is deductible even though you are certain it is not? As it is their return my tendency would be to record in writing your disagreement and go with their point of view.

Peter
Peter Coekin

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By AnonymousUser
28th Feb 2007 11:16

Hiding to nothing
Such a claim is unlikely to succeed because it is not an expense incurred in running the business. Rather it is incurred in order to put the client in a position to be able to trade. It is thus capital in nature.

I am slightly alarmed that you are preparing four years' accounts at once. This case has all the hallmarks of one that is going to be trouble. They are miles behind with their accounts and they are arguing with your expert advice.

Make sure that you get your fees up front.


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By PeterCoekin
28th Feb 2007 12:19

Agreed
Thanks Phil, confirmed my suspicions.

I have indeed billed and received a proportion of the fee upfront. The client falls into the 'sincere but disorganised' category and their last accountant has let them down.

Regards

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By DavidW878
06th Mar 2007 10:33

Don't
Punch's famous "advice to persons about to marry" ("Don't") is equally applicable to anyone planning to assist in filing a return that he or she knows to be wrong (which would include claiming relief for an expense you know to be unjustifiable). TMA 1970 s99 provides for a maximum penalty of £3,000. It also opens the door to a blanket s20A notice relating to all your clients. Oh, and it's also likely to be a criminal offence.

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By geoffemtacs
05th Mar 2007 16:02

Nope
You can't claim for the medical costs of treatment which are caused by the line of work involved. It doesn't hinge on the cause but on the purpose. If you need to spend money in order to make a particular piece of work possible then I'd be inclined to claim it.

Our regular favourite is osteopathy and similar for violinists that's necessary to enable them to play their instrument which requires a peculiar cricking of the neck. This is accepted (with ill grace) by Inspectors, but what's proved impossible is say back massage to restore mobility to someone following injury carrying a double bass, say. You get into private benefit and the tax case concerning the guitarist who tried to claim the cost of having a fingertip re-attached (I can never remember the names of these damn things).

As the MLR gang will confirm, if someone is claiming for an expense that you know is complete undeductible hogwash, then you should be filing a report. So surreally if you file the Return for them you should also be filing a report saying that it's wrong. I'm afraid it's a grey area, if I knew something was definitely non-deductible (say entertainment for instance) I would refuse to include it. Where it was a 50/50 or some other reasonable percentage, I'd be willing to let the client steer it.

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