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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have recently started bookkeeping online. I worked in accounts

Resolved Question:

I have recently started bookkeeping online. I worked in accounts for many years but had a break from since 2002 so I am rather out of touch with many tax issues. I have a few clients already and notice that although they have both business and personal bank accounts they all appear to be using the business accounts for personal use. Gifts for friends, lunch treats, taxis etc.... There are many such transactions and I am rather confused as to how many of those can be put through the business. They seem to be under the impression that EVERYTHING can! I know this is not the case and I have been doing a bit of research online but it is so time consuming. Any advice on this would be most helpful. If you know of any classes that specifically relate to this I would happily go that route as I think there is a lot to learn and to keep up to date with. Thanks - Rosie
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.

Hello and welcome to the site. Thank you for your question.

You will find most issues are common but there are some issues that are different depending on the nature of work/business.

There is general guidance on what is allowable expense in business. HMRC has guidance notes/helpsheets that I find useful

As a general rule for an expense to be allowable it has to be incurred wholly and exclusively for the performance of the business. This general principle is covered here

http://www.hmrc.gov.uk/manuals/bimmanual/bim37000.htm

Gifts and business entertainment are not allowed as a deduction against profits, see here

http://www.hmrc.gov.uk/manuals/bimmanual/bim45065.htm

Exceptions for small gifts are covered here

http://www.hmrc.gov.uk/manuals/bimmanual/bim45070.htm

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

I am happy to discuss this is detail as a live chat if you wish. Please let me know.

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4803
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 1 year ago.
I thank you for acceping my answer.

Best wishes.

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