Tax deductible expenses

Allowable expenses

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Hello,

I have a sole-trader client who won a holiday for two in a business competition. The client argue that the expenses connected to the holiday such as covid testing or airport parking are fully tax deductible as the client won this in a business competition. In my opinion these expenses are not 'wholly and exclusively' for the purposes of running the business, therefore there should be tax disallowed. Am i right?

Many thanks in advance

 

 

 

Replies (13)

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By David Ex
17th Nov 2022 10:31

Yes you are. How does going on holiday contribute to earning the profits of his/her business? (Clue: It doesn’t.)

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By Paul Crowley
17th Nov 2022 10:33

Client is either pulling your leg or a complete twit.

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Replying to Paul Crowley:
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By User deleted
17th Nov 2022 10:36

That choice of vowel at least meets the filter....!

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By Wanderer
17th Nov 2022 10:35

Stop doubting yourself regarding tax law a client has dreamt up.

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By Vladka
17th Nov 2022 10:43

Thank you all for your comments.

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DougScott
By Dougscott
17th Nov 2022 12:14

You are correct and they must know they are trying it on. Send them a copy of the HMRC guidance.

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By Tax Dragon
17th Nov 2022 13:00

I reckon you could make a case - of course, you'd have to bring the prize in as a trading receipt, from which you deducted the costs.

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By Open all hours
17th Nov 2022 14:00

Try him with the thought of claiming all the incidental expenses provided that the full value of the package is brought in on the other side.
Seriously, it’s a dead cert ‘no’.

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By Vladka
17th Nov 2022 18:01

Thank you all for your answers. Much appreciated.

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paddle steamer
By DJKL
17th Nov 2022 19:57

Does the "holiday "have any connection with the taxpayer's trade, e.g. painter/decorator and a holiday that includes examining application/use/final results of using particular trade products?

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Replying to DJKL:
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By Tax Dragon
17th Nov 2022 20:03

Come on holiday (with DJKL? - it's a ticket for two) and watch paint dry.

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Replying to DJKL:
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By Vladka
17th Nov 2022 20:05

Hello, no connection to the trade. He won a holiday as a first prize as he was the best at the trade in the area.

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Replying to Vladka:
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By Hugo Fair
17th Nov 2022 21:49

Of course, he doesn't *have to* go on holiday IF he doesn't want to incur these associated costs!

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