hotel expenses – self employed

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  • #43589
    pbirks
    Participant

    Hi 

    I'm looking at a s/e claim

    Couple are management/change consultants – delivering traing/presentations in uk and overseas.

    They have provided un audited accounts for latest year ending April 2012. They have a turnover of approx £60k – but the two biggest expenses are

    Travelling (15k for the year) and motor expenses (10k for his and her cars)

    I have asked for a breakdown of what the travel covers in terms of hotels, parking, flights and meals in uk and abroad.(the running costs of the cars comes under motoring expenses)

    I know HMRC allow an amount per night towards accommodation when working away from home – are we allowed to use a similar notional figure rather than just accept the cost per night? Does anyone know what this is?

    My arguement is that while i understand he needs to have overnight accommodation, i am not convinced that we should just allow the full cost of the hotels if this is excessive. I think this is reasonable – if he choses to be in a 5 star hotel at cost of £190 per night (for example) then i think thats cos he likes it and not because there wasn't cheaper accomm available. Also he argues that he has a "brand to market" and that his clients wouldnt be impressed with a teavel lodge equivalent… fair enough but still not convinced that it falls under wholly and exclusively.

     

    Your ideas/comments/critique welcome please! Im open to suggestions…. 

     

    #123778
    John Boxall
    Participant

    How does he bill his clients?

    If there is a specific amount for travel & accomodation might that change things?

    Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

    Wilkins Micawber, Ch12 David Copperfield

    #123780
    Anonymous
    Guest

    My self-employed travel expenses (excluding motor costs) are about 10% of my turnover; 20% if you include motor expenses. So my first impression is that their travel costs look somewhat extravagant, but then again I am only travelling in Great Britain.

    #123785
    pbirks
    Participant

    His clients are billed for the training /presentation only – accommodation/other expenses are not billed separately

    #123793
    Anonymous
    Guest

    Self Employed expenses are subject to a test of “reasonableness” under HB Regulation 38 (7). The hotel charges are wholly and exclusively incurred for the purposes of the employment, but are they reasonable?

    #123794
    peterdelamothe
    Keymaster

    Are you quite sure they are self-employed and that this is not a limited company …they are not directors?
    Most unusual to provide such a business outside limited liability.

    #123796
    pbirks
    Participant

    I have double checked and they have confirmed that they are not directors, they are partners in the business but it is not a ltd company.

    #123801
    peterdelamothe
    Keymaster

    OK. If you are working for yourself then you will tend to try to mnimise your costs because it is your money…and working every hour just to pay hotel bills? So maybe he is having to impress clients. Hbinfo runs conferences and training at a posh hotel in Russell Square (because we get a good rate for a top value venue) but we would never stay there the night before (not at £300 per nght ex breakfast). So I would wonder about these unaudited amounts too ….

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