Hello and welcome to another instalment of tales from the accountant’s office brought to you by D&K Accounting, of Westwoodside on the Isle of Axholme and also of Bawtry.
This tale starts when one of my clients, who we will call him Jim to protect the innocent (or not so innocent in his case!) sent me a WhatsApp message – yes you read that correctly; our clients are able to contact us via WhatsApp….. I know, who would have thought that an accountant could actually make use of technology! Anyway I digress. Jim sent me a WhatsApp message which read:
“So what happens when I buy something personal off eBay, but PayPal has my business account set as primary so it’s paid for by my business?” he asks
“Depends what the item is” I replied knowledgeable
“Erm, it’s lube” came the reply
“😳😳😳😂😂😂” was my response!!
Naturally this led to a fairly interesting/terrifying conversation (depends on your point of view) about what he may claim as a business expense….. and what he may not. Needless to say, sex lube for Jim is not considered a legitimate business expense!
There indeed may be some professions where such necessities are considered to be a business expense as long as it is wholly for business use, but on such occasions it is always best to contact HMRC for guidance, or speak to your accountant. If you do feel the need to do this, please allow me to be in the room as I would love to hear that conversation!!
Items purchased through the business for personal use, such as Jim’s sex lube, are treated as drawings and transacted through the directors loan account. Jim seemed disappointed by this but I am sure it was short lived.
I hear lots of stories of someone telling a client that they can or cannot claim an expense followed by a list of reasons to try to support that advice. But just because an expense is or is not allowable for one type of business, it doesn’t mean it follows for all types of business.
Always take the advice of the experts and speak to your accountant. We don’t need every little detail of what you might be doing with such items (especially if it is sex lube!) as this would be considered as over sharing!!
Don’t loose grip of your expenses or allow your profits to slip away, book an appointment to see us for a free consultation to see how we can help you by clicking the link below.
Look out for the next instalment of tales from the accounting office coming soon!