MEALS, COFFEES AND TRAVEL FOR BUSINESS - 3 COMMON MISTAKES

[@michaeldavies7793]

Great videos! I'm recently self employed, sole trader (franchisee), no staff, based at home, and visit customers doing blinds & curtains so am out all day on the road. Are bought lunches an allowable expense or is it only when I am away overnight that meals can be claimed?

[@summermarino6224]

This may seem a basic question, but do you need to keep receipts of every business transaction or just the ones where you paid for by cash? Presumably a bank statement would suffice for paymens made by card? Look forward to videos every time!

[@HeelanAssociates]

Depends on what it’s for. If vat registered it’s stricter in and most cases you will technically need receipts. For tax return type purposes you have to keep ‘records’ so it doesn’t have to be every receipt, but it’s certainly best practice.

[@rodgerq]

I had a situation this year where i was working away and myself and a client went for an evening meal with our partners. I paid the whole meal on the business. Would that whole meal be classed as client entertainment or could i take a quarter of it(my own) and claim that as my ordinary subsistence?

[@HeelanAssociates]

It’s usually cleaner to pay for the bill separately as it becomes a little grey / more debatable otherwise. I’ve seen it accepted and argued both ways in an inspection. It’s certainly an argument you could make though.

[@rodgerq]

@HeelanAssociates thanks for the advice.

[@Ecomerz]

I’ve just set up an online business but haven’t yet received my business banking card. I’ve made some stock purchases with my personal card. How would I account for this using a cloud software? Not quite sure whether that is classed as an expense or if it is recorded differently to that.

[@HeelanAssociates]

If a limited company, you'd be starting a 'directors loan' kzbin.info/aero/PLkzy-8ym2nIj1hfsAO_33WYn3yZpJedLv If self employed sole trader, you'd show as an expense, but 'paid' via 'owners drawings' or 'capital introduced'

[@Arithmagicians]

Just to be clear, can I claim back VAT spent on Business Entertainment?

[@HeelanAssociates]

VAT on entertainment generally no. On subsistence / travel expenses though, usually yes.

[@paulkrenz9593]

Hi Dan, I do my own book keeping and have found your videos very helpful, but i am confused about what HMRC want me to do about my tax year , as my business runs from December to November I have always accounted for that period but I understand I now have to change it to April 1 to March 31, does this mean I have to have a 16 month accounting period to bring me in to line or do I have to have a short financial year from December to March , would really appreciate your help

[@HeelanAssociates]

Its a tough one to explain in a comment but this may help: www.litrg.org.uk/working/self-employment/calculating-self-employed-profits/trading-income-basis-period-reform

[@pwr1990]

If entertainment is generally not tax deductible, then why put it through the business and not just pay for it personally from the start?

[@HeelanAssociates]

In a limited company you are using company money, so needs to be accounted for. If you use your personal funds you’ve already paid corp tax and likely personal tax on the money. Having the company pay removes the personal tax from the chain. As a sole trader there is no benefit other than interest of how much you spent.

[@pwr1990]

@@HeelanAssociates regarding the limited company scenario, the "personal tax removed from the chain" is only temporary right as this would be a Director loan?