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Allowable entertaining?

Allowable entertaining?

Sole trader (freelance salesman effectively) did a lot of work for 1 customer, he invoiced the company each month plus also expenses incurred such as travel, the odd lunch and some occasional entertaining of their customers. He was paid in full for both aspects.

When it comes to preparing his personal tax return, his invoices and the expenses charged are included in his income but ordinarily entertaining isn't allowable for tax but it appears unfair for him to suffer the tax on it personally, however if it were to be classified as say 'disbursements' incurred on behalf of clients then it would be allowable. For all other expenses (e.g. travel), his income will simply be offset by the expense so a neutral tax position.

Can anyone reassure me on this please?


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30th Jan 2013 13:42

You are OK

Yes, any expenses re-charged to a client (even travel) are best classified as direct costs and are not disallowed.

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30th Jan 2013 13:53


See in particular BIM45013 and BIM45014.

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31st Jan 2013 01:32

Thank you both

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