OK - I should know the answer to this. I'm really just looking for a pointer to some information...
I have a new client (sole director/shareholder company) that works from a shared office. They have client meetings in coffee shops (you know where this is going)...They purchase a lot of Starbucks and Costa vouchers and are claiming that these are genuine business expenses as the purpose of them is to have a meeting space and the cost of the coffee is really just the rent of the space. The amount we are talking is around £80 per month which to me sounds excessive given they are a 1 person company!
My argument to them will be that any money paid in this respect would be viewed by HMRC as either
- Entertaining clients or suppliers - disallowable
- Possibly subsistence for them
- Likely staff entertaining or some other benefit in kind
- Possibly at a push trivial benefit, although given it is for work purposes, potentially not
Normally I would disallow this however this is quite an "assertive" client and I am expecting to need to provide chapter and verse, to combat the old "well I've always done it this way and my old accountant never had any issue with it" line.
So my question is - does anyone know where I can reference either legislation, or HMRC guidance on this so I can provide a robust enough response to them when I am challenged.
Alternatively, if I am wrong on this please also let me know
Thanks in advance