Allowable Expense?

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mastrypuncher
mastrypuncher Registered Posts: 19 New contributor 🐸
Doing my mates accounts who is a builder/sole trader. He had bad back and has put his physio receipts in saying if he hadnt have had it he wouldnt have been able to work. Physio, allowable or not? I have my doubts.

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  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
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    Disallowable. Duality of purpose. Sorry :(
  • mastrypuncher
    mastrypuncher Registered Posts: 19 New contributor 🐸
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    Thanks for that you have confirmed my suspicion
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
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    Even if he claims he was injured at work?

    Because if he had insurance which pays for medical bills like this, the cost of the insurance would go through as an allowable cost?
  • mastrypuncher
    mastrypuncher Registered Posts: 19 New contributor 🐸
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    Actually, he said he was injured at work.
  • T.C.
    T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙‍♂️
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    I think that would take alot of proving! I agree with Monsoon! Not allowable. If he is insistent, you could suggest that you write to HMRC for their view.
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
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    I've worked as a builder, and your back needs a lot more care than one of an office worker. If its not 100% you'll end up with more problems down the line.

    I'd include the cost.
  • Newbie
    Newbie Registered Posts: 229 Dedicated contributor 🦉
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    I would certainly say no in my opinion (Prince V Mapp) see BIM37945
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
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    PGM, its one of those 'unfair' ones like a suit is never allowable even though its wholly and exclusively for business.

    At the end of the day it is self assessment, so they can put it in and hope it doesn't get looked at, but if the accountant has advised its likely disallowable, and then HMRC enquire, it will likely get classed as a deliberate and concealed error and penalised accordingly.

    Unless you can find a part of the BIM or law that supports the deduction and you fancy taking it to tribunal :)
  • paulstafford
    paulstafford Registered Posts: 126 Dedicated contributor 🦉
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    I would be inclined to include it as an allowable expense and if challenged, quote this case as justification.

    Parsons v HMRC [2010 UKFTT 110 (TC), a stunt performer was allowed a deduction for:

    The cost of a private operation on his knee. The cost of the operation was held to be wholly and exclusively for the purposes of his trade because it was not essential to his private life; he could have waited and had the operation under the NHS. It was essential to his trade; he could not perform with a bad knee.

    The cost of back treatment and massage. On the same principles as his knee operation, the work was not essential to his private life, but he could not perform with a bad back/aching muscles.

    Be interested to hear Dean Shepherds opinion.
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
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    Paul I like it! I'm bookmarking that one.


    With that case in mind I would definitely consider putting it through.
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
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    Monsoon wrote: »
    PGM, its one of those 'unfair' ones like a suit is never allowable even though its wholly and exclusively for business.

    At the end of the day it is self assessment, so they can put it in and hope it doesn't get looked at, but if the accountant has advised its likely disallowable, and then HMRC enquire, it will likely get classed as a deliberate and concealed error and penalised accordingly.

    Unless you can find a part of the BIM or law that supports the deduction and you fancy taking it to tribunal

    I don't agree you can compare it to a suit. Not that that makes me argument any more right! :D

    At the moment my backs not 100%, but its fine for the job I do now, if I was to return to the building trade I'd have to get it sorted out. So theres no duality to that, so an annoying cost to pay out if its not allowable.

    So, for a builder they may be better off taking out insurance which would be an allowable expense? Which would then cover these costs.
  • andrewtdk
    andrewtdk Registered Posts: 150 Dedicated contributor 🦉
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    Health insurance wouldnt be an allowable expense though surely? If you got it through a limited company you would have to pay a bik on it and surely you wouldnt have a benefit in kind charge if it was an allowable business expense?
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
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    andrewtdk wrote: »
    Health insurance wouldnt be an allowable expense though surely? If you got it through a limited company you would have to pay a bik on it but surely you would have a benefit in kind charge of it was an allowable business expense?

    I was just wondering that. I work for a company and I get a good health cover, and don't pay any BIK, so not sure how it differs for someone self employed?
  • andrewtdk
    andrewtdk Registered Posts: 150 Dedicated contributor 🦉
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    PGM if you dont mind me asking your not a lower paid employee are you? im guessing not but this could be a reason why you are not taxed on health cover.

    If not i would be interested if one of the more knowledgeable posters knows why this can be the case? Always interesting things like this
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
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    andrewtdk wrote: »
    PGM if you dont mind me asking your not a lower paid employee are you? im guessing not but this could be a reason why you are not taxed on health cover.

    If not i would be interested if one of the more knowledgeable posters knows why this can be the case? Always interesting things like this

    No not lower paid. But all staff here get the cover, I'd get a % of my salary indefinitely if I'm unable to work, and we'd get a payout of 4 times salary in case of death.

    I don't know if it would contribute to physio to help you get back to work though.
  • andrewtdk
    andrewtdk Registered Posts: 150 Dedicated contributor 🦉
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    Just had a quick look and it looks like payments like this are more like life insurance which you dont appear to get a benefit in kind for but if you pay out for cover like bupa where you get private health treatment you would have a bik
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