P11D Home Office, Personal Car, Hotel Guests

[SF2000]

Director, running website business from home.

I have not completed a P11D for a few years as I was advised that there was "nothing to report".

* Any business trips made by personal car were paid at the allowable 40p/m.
* Any business costs paid personally (stamps, ink cartridge) were just reimbursed (like paid out of petty cash)
* Allowance for heat and light £180 a year is genuine

Thus no P11D needed to be completed.

Note that the £180 H/L allowance is more than £3 a week. But with my calculations the hardware alone is clocking up ~£200 pa for electric. I'm not bothered about claiming for this but should this be put the P11D?

Hotel / Entertaining Expense
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Last year I met up with clients at an event. The business paid for one night in hotel for myself, wife (employee of business earning more than £8500), kids, and one room for a guest. The business also paid for meal for family and guest. This was paid for with business credit card.

The accountant has accepted this as a valid business expense and the business accounts were completed accordingly.

I assume that this does not have to be reported on P11D, as it was a business expense, and not paid for by me personally?

[Clippy]

Director, running website business from home.

I have not completed a P11D for a few years as I was advised that there was "nothing to report".

* Any business trips made by personal car were paid at the allowable 40p/m.
* Any business costs paid personally (stamps, ink cartridge) were just reimbursed (like paid out of petty cash)
* Allowance for heat and light £180 a year is genuine

Thus no P11D needed to be completed.

Note that the £180 H/L allowance is more than £3 a week. But with my calculations the hardware alone is clocking up ~£200 pa for electric. I'm not bothered about claiming for this but should this be put the P11D?

Hotel / Entertaining Expense
---------------------------
Last year I met up with clients at an event. The business paid for one night in hotel for myself, wife (employee of business earning more than £8500), kids, and one room for a guest. The business also paid for meal for family and guest. This was paid for with business credit card.

The accountant has accepted this as a valid business expense and the business accounts were completed accordingly.

I assume that this does not have to be reported on P11D, as it was a business expense, and not paid for by me personally?

Based on what my accountant advised me, this is correct.

I asked a similar question last year and that thread may have some useful info for you.

[xoggoth]

Seems ok according to this:

HM Revenue & Customs: Entertainment

[Taxless]

Did you give the accountant the full story behind the hotel related expense?

It may be possible to make an argument for expenses relating to you and your spouse (HMRC might want to know why she needed to attend), but what part do the kids play in the business and why did they need to be there.

Perhaps the accountant thought the amounts were not material but on the face of it, this does not sound like a wholly business expense.

[SF2000]

Threads / links noted. Thanks.

As the hotel is per room (regardless of # occupants), and kids eat free surely it's not a problem?

[SueEllen]

Threads / links noted. Thanks.

As the hotel is per room (regardless of # occupants), and kids eat free surely it's not a problem?

Actually it is a problem.

The expense wasn't wholly for the business.

The receipts would show that the kids where there regardless of whether they were there free or not. So if you ever got questioned the entire bill would be disallowed as it look like you are on a jolly.

[LisaContractorUmbrella]

Agree with Sue Ellen. The fact that you 'met up' with clients at an 'event' and took along your wife and children does not lead me to think that HMR&C would accept the cost as a 'business' expense

[SF2000]

The invoice does not state kids or names at all: It's just a standard hotel receipt "1 standard room with breakfast".

Wife is employee and was working at this event.

If HMRC do question this is it just a case of making good the value of the kids chicken nuggets and rice crispies?

This is an annual event now (where we meet old and new customers, discuss the direction of the business). I guess as a fall back this could be counted as an annual party and thus I + 1 kid, the wife + 1 kid would be allowable under the £150 limit?

[northernladuk]

The invoice does not state kids or names at all: It's just a standard hotel receipt "1 standard room with breakfast".

Wife is employee and was working at this event.

If HMRC do question this is it just a case of making good the value of the kids chicken nuggets and rice crispies?

This is an annual event now (where we meet old and new customers, discuss the direction of the business). I guess as a fall back this could be counted as an annual party and thus I + 1 kid, the wife + 1 kid would be allowable under the £150 limit?

Thing is if HMRC even get a sniff of this they will go through your accounts with a fine toothed comb. Is it really worth pushing the boundries and opening yourself to this level of investigation if it does go wrong? Bearing in mind you are only saving the tax on it what is the saving to you based on the risk? At the end of the day it is up to you and how you sleep at night about it but attempting to wangle systems to suit yourself using the business will not go down well with HMRC. Any attempt to bend the rules will result in them taking special interest when they come calling.

[LisaContractorUmbrella]

Agree with NLUK and if all you are saving is the tax element of chicken nuggets and rice crispies why bother?