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Silly Digits


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Recruitment costs/incentive trips
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Hi

I have a self employed client who is a cooking show host.  She has to recruit her own team, who would also be self employed themselves.

When she meets up for the first time, usually in a cafe, she buys them a coffee/snack.  Are these allowable for tax purposes eg recruitment expenses.

Also, my client can earn incentive trips.  Are any expenses for this trip eg subsistance/drinks allowable.

I understand that entertaining is not allowable.  But if the meetings for the new recruit was at home the tea/coffee surely would be allowable.

Can any body give me some advise on this?

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Tombombadil


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All expenses of recruitement are allowable if supported by documentary evidence (an invoice)
If such meetings were at held at her own home then the costs would be allowable, though this would be limited to the cost of the ingrediants.
Where a trip earned as an incentive can been seen as a reward rather than her own business expense then those costs would probably not be allowable.



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lor


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Hi There, I have a similar question, if my client who when going to visit potential customers who she is selling her services to, sometimes purchases a meal for them, is this an allowable expense??? as in a way they are doing this in order to make a sale???

Look forward and thank you for your response!!

My gut instinct is telling me that this is non-allowable.. 

-- Edited by lor on Wednesday 21st of October 2009 09:00:12 PM

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Alison


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Hi Lor

If it is your customer for a potential customer purchasing a meal (I have a similar customer who does this) and I always include it and the accountants have never told me this is wrong so assuming it is allowable. Think I normally code it on sage as entertainment.

Alison

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lor


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Thank you, for your reply Alison,

So are you saying it is an allowable deduction for Tax purposes also?

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Wella


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Hi Lor

It would be legitimate business expense from an accounting point of view but is specifically excluded as a tax deductible expense and should not be claimed on a self assessment return. Alison, it may be that the accountant makes adjustment when it comes to completing your clients tax return?

If you have the agents SA tax return guide it is shown under dissallowable expenses on page SEFN7 & SEFN9 Basically, no client/ customer entertainment or hospitality can be claimed for tax purposes even if it leads to new business.

Hope this is usefull

Bill

-- Edited by Wella on Thursday 22nd of October 2009 09:51:54 AM

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lor


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Thank you Wella for clearing that one up!

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Alison


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HI Bill

Yes I think the accountants do make various adjustments for the tax returns.

Thanks

Alison

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lor


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Thank you Alison and Bill for your answers.

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