Reply To: self – employed expenses.


First the easy maths bit:

It is clearly a work expense, but this should of course be balanced by an equal amount of income. If he is getting reimbursed separately by clients and not putting it on their generic bill, the money should be added back in as additional income. On the other hand, far more likely I suppose, if he issues an all-inclusive bill and the whole lot is recorded as generic income then you are counting it as money in on one side and should also allow it as money out on the other.

But you knew that already and that’s not really what worries you is it?

Is it true – that’s what we are really talking about here isn’t it? You suspect that he is doing what many self-employed people are suspected of doing, which is to grossly exaggerate an expense that looks OK at first glance, and hope no-one does the sums. Like £1000 a year on “stationery” – they’ll never ask, everyone uses stationery.

Presumably he puts a small amount of fuel in each car. He should therefore have dozens of receipts for small amounts of fuel. He cannot rely on receipts for £40 worth petrol to fill up a car once every three or four weeks – these must be almost daily, for amounts like a fiver or thereabouts. If he hasn’t got proof of plausible transactions, I might be inclined to disallow the expense.