Having prepared year end accounts for a client (who runs a company that hold outdoor group fitness sessions), they are not happy with their CT calculation due to treatment of income related to a social event (restaurant meal) for their clients.
Basically they asked each of their clients who would like to attend to pre-pay the £30 fixed fee pp into their company account and then their company settled the bill directly with the restaurant on the night. Overall my client paid more than they received from prepayments because they paid for extras.
I have told them collecting prepayment was a bad idea as this income is taxable regardless of its purpose. And the expenses are not tax deductible as they relate to client entertaining.
Would anyone here disagree?