Grey area between work trip and holiday

[Squarejack]

Hello all,

To provide some context I am an author and also run a small limited company that publishes the books I write. I have published multiple titles most of which have been best sellers in there genre, we have a positive cash flow and good turnover. I have been on TV/radio multiple times etc. The reason I mention this is to give substance to the claim that I really am an author and not just blagging it for what I want to ask you all…

I have had an idea for a book that requires myself and my family to go sailing for the summer (wow what a lucky idea that was!) We already have the privately owed sailing vessel and I‘m after any suggestions as to what aspects of the trip can be charged/expensed to the business. The trip is UK based so we are not talking hundreds of thousands of pounds more likely around 5k - could I for example charge moorings, fuel and food to the business or should I simply rent the use of the yacht from myself even though I’m also a director? Or would it be better to try and claim expenses after the book is published? My rational is that if I was writing a book on rocks it would be legit for the business to pay for a research trip to a mine.

I appreciate that this looks like I’m trying to con the tax man into for paying for a holiday, but I am really just trying to find ways in which I can be smarter/more efficient with how I fund the research of this book. Just to also state I’m not going to be writing a travel guide, I don‘t want to give away the premise of the book, but it will be in the general non-fiction entertainment genre.

Any ideas are greatly appreciated - I haven’t spoken with my accountant yet as normally when I mention the word ‘boat‘ she mentions the word ‘audit’!

Thanks in advance, S.

 

[MBE2017]

I think this will all come down to whether the taxman agrees that any claims are 100% necessary and for business only.

Suggest that you talk to the tax people, and enjoy your trip.

 

[Squarejack]

Good point. Framed in the context of is it 100% necessary is a tough benchmark. It's the difference between here is an experience I have had and I can write about Vs here is an experience I want a business to pay for so I can write about it. I can't see the latter being justified easily!

 

[DontAsk]

I would be asking myself how big is the claim compared to turnover and will anyone ever notice other than you and your accountant. If the accountant says NO then probably heed their advice, after requesting justification.

 

[Gyumri]

I have had an idea for a book that requires myself and my family to go sailing for the summer (wow what a lucky idea that was!) We already have the privately owed sailing vessel and I‘m after any suggestions as to what aspects of the trip can be charged/expensed to the business.

Take a look at the link below. If you can add a chapter for us folks on these forums so that we can rescue you from a desert island, that would be appreciated.

707-360 The ‘wholly and exclusively’ rule – case law | Croner-i Tax and Accounting

In principle, as would be expected, the ‘wholly and exclusively’ rule means that expenditure is only deductible in calculating business profits if it is incurred only for business purposes.

library.croneri.co.uk

 

[DontAsk]

Take a look at the link below.

It seems to be pay walled.

 

[kulture]

The above link is behind a paywall try

BIM37007 - Wholly and exclusively: overview - HMRC internal manual - GOV.UK

www.gov.uk

 

[kulture]

Looking at the Hmrc advice is that any expense has to be wholly and exclusively for the business.

I suspect that it would be a difficult test to get any expense from what could be called a family holiday to be wholly and exclusively for the business.

Of course it is remotely possible that your proposed book will require the family holiday, but it is difficult to say that the benefit you obtain may be legitimately ignored. A claim that you yourself have not helped by the flippant remark you made in your first post.

By all means talk to your accountant. Perhaps you can make a case that the trip had to be longer than what you would normally take. Perhaps some locations were wholly necessary for the book and not the holiday. It is unlikely that the whole trip would be judged by Hmrc as wholly and exclusively necessary. After all they want your taxes.

 

[WaveJumper]

My first thought is ask your accountant my second thought over and above what has already been mentioned above is, as you have done before when researching for a book would you not be traveling alone and almost be a fly on the wall either observing others / collecting data etc etc so maybe you would have a better case with HMRC if just claiming for yourself.

 

[The Byre]

Let me put it this way - so I've got an idea for a book. It will be about a man who has a secret love affair with a scarlet woman from Ponders End. In their secret love-nest, he falls into a world of debauchery and orgies. It is a story of buying love and paying the price. A story of nude bathing parties in Tring and Stourbridge and other exotic places. A story of bought love and lost morals. A story of wild and erotic dances to the music of Nicki Minaj and Charles Penrose.

To do this, I need to rent a flat and hire a series of women of doubtful morals and hold a series of naked parties whilst listening to 'Starships' and 'The Laughing Policeman'. I estimate the total cost to be around £50k. Is this expense tax-deductible?

 

[UKSBD]

Let me put it this way - so I've got an idea for a book. It will be about a man who has a secret love affair with a scarlet woman from Ponders End. In their secret love-nest, he falls into a world of debauchery and orgies. It is a story of buying love and paying the price. A story of nude bathing parties in Tring and Stourbridge and other exotic places. A story of bought love and lost morals. A story of wild and erotic dances to the music of Nicki Minaj and Charles Penrose.

To do this, I need to rent a flat and hire a series of women of doubtful morals and hold a series of naked parties whilst listening to 'Starships' and 'The Laughing Policeman'. I estimate the total cost to be around £50k. Is this expense tax-deductible?

No Boris

 

[MBE2017]

I estimate the total cost to be around £50k. Is this expense tax-deductible?

Pffft, unlikely.

Now if it was a duck house, no problem, or church collection, memorial wreaths to the fallen, no problem. You wouldn’t even need a receipt.

 

[WaveJumper]

Let me put it this way - so I've got an idea for a book. It will be about a man who has a secret love affair with a scarlet woman from Ponders End. In their secret love-nest, he falls into a world of debauchery and orgies. It is a story of buying love and paying the price. A story of nude bathing parties in Tring and Stourbridge and other exotic places. A story of bought love and lost morals. A story of wild and erotic dances to the music of Nicki Minaj and Charles Penrose.

To do this, I need to rent a flat and hire a series of women of doubtful morals and hold a series of naked parties whilst listening to 'Starships' and 'The Laughing Policeman'. I estimate the total cost to be around £50k. Is this expense tax-deductible?

A biography perhaps ?

 

[japancool]

To do this, I need to rent a flat and hire a series of women of doubtful morals and hold a series of naked parties whilst listening to 'Starships' and 'The Laughing Policeman'. I estimate the total cost to be around £50k. Is this expense tax-deductible?

Are the women covered by IR35?

 

[kulture]

Can we please go back to discussing the business question. This is not time out.

 

[NickGrogan]

Let me put it this way - so I've got an idea for a book. It will be about a man who has a secret love affair with a scarlet woman from Ponders End. In their secret love-nest, he falls into a world of debauchery and orgies. It is a story of buying love and paying the price. A story of nude bathing parties in Tring and Stourbridge and other exotic places. A story of bought love and lost morals. A story of wild and erotic dances to the music of Nicki Minaj and Charles Penrose.

To do this, I need to rent a flat and hire a series of women of doubtful morals and hold a series of naked parties whilst listening to 'Starships' and 'The Laughing Policeman'. I estimate the total cost to be around £50k. Is this expense tax-deductible?

Will the book have pictures? if so, how else are you supposed to take them?

If it was a film rather than a book, there are probably lots of ways to claim it.

 

[Socio South West]

The answers to your question @Squarejack depends on how imaginative and experienced your accountant is.

If your accountant looks over his horn rims at you and launches into a montone diatribe that goes completely over your head, get rid, and find someone creative and imaginative that will express enthusiasm for your ideas and plans.

 

[NickGrogan]

Can we please go back to discussing the business question. This is not time out.

"Per contra, if in truth the sole object is business promotion, the expenditure is not disqualified because the nature of the activity necessarily involves some other result, or the attainment or furtherance of some other objective, since the latter result or objective is necessarily inherent in the act."

BIM37400 - Wholly and exclusively: case law: incidental benefit - HMRC internal manual - GOV.UK

www.gov.uk

"No bar to allowance if the purpose is wholly and exclusively for the trade, profession or vocation"

You can claim any/all parts of the trip that are essential for the book. Things that you would not do if you were just on holiday.

Using the HMRCs own example

"For example a self-employed consulting engineer may travel to exotic locations to advise on projects. The travel and the exotic locations may be benefits but where there was no private purpose they are incidental to the carrying on of the profession and the cost is allowable."

 

[japancool]

Well, consider this - the founders of Yo! Sushi take a yearly trip to Japan for market research. That seems to be acceptable.

Don't tell me they spend all their time there in sushi bars.

 

[kulture]

"Per contra, if in truth the sole object is business promotion, the expenditure is not disqualified because the nature of the activity necessarily involves some other result, or the attainment or furtherance of some other objective, since the latter result or objective is necessarily inherent in the act."

BIM37400 - Wholly and exclusively: case law: incidental benefit - HMRC internal manual - GOV.UK

www.gov.uk

"No bar to allowance if the purpose is wholly and exclusively for the trade, profession or vocation"

You can claim any/all parts of the trip that are essential for the book. Things that you would not do if you were just on holiday.

Using the HMRCs own example

"For example a self-employed consulting engineer may travel to exotic locations to advise on projects. The travel and the exotic locations may be benefits but where there was no private purpose they are incidental to the carrying on of the profession and the cost is allowable."

Unfortunately the HMRC guidence has other examples that say otherwise. It is the words Wholly and EXCLUSIVELY that both apply. If he were going on the trip ALONE then you are correct and the above example will apply, but because he is ALSO taking his wife and implies that it is ALSO a bit of a holiday then look at BIM37610 where it ends with:-

"It seems to me that this statement by Mr Taylor represents an unequivocal admission by him that the expenses of the American visit were incurred for a dual purpose, namely (i) the advancement of his profession and (ii) the enjoyment of a holiday. This being the case [what is now S34(1)(a) ITTOIA 2005]… apply and prohibit the deduction of the expenses."

 

[NickGrogan]

What about if he doesn't enjoy the holiday?

 

[kulture]

What about if he doesn't enjoy the holiday?

Well I assume that HMRC don't care one way or another about enjoyment.....

 

[DontAsk]

Well I assume that HMRC don't care one way or another about enjoyment.....

The more miserable they can make us, the better.