Claiming on a duck island? The Blurred Line of Expenses

By QuickBooks UK

2 min read

What do horse manure and a floating duck island have in common? Well, not much… but, If you asked certain MPs, they might claim they’re tax deductible.

We’ve published a previous piece on the challenges self-employed entrepreneurs might face in deciphering expenses, but to reiterate, business expenses involve any costs that are solely and exclusively for work purposes.

If you’re wondering what a duck island has to do with being a member of parliament, you’re not alone.

The good, the bad, the ridiculous

Sometimes, unorthodox claims can be a windfall. Alison Mitchell, a sports broadcaster who commentates regularly on the BBC, discovered that she was able to claim four crowns on her tax return. Her producer told her that the crowns were necessary to continue working in television, which suddenly transformed a would-be cosmetic enhancement into a business expense.

But unless you’ve got a fantastic reason tucked up your sleeve, you’re better off not following the lead of these people (names withheld): a claimant who tried to pass off a bouncy castle and Spider-Man cake as team-building necessities, and another who tried to claim 226 bottles of energy drink, because apparently staying up past 11 am is a chore.

Then, of course, there are the more public and salacious blunders mentioned above.

Claims like Sir Peter Viggers’ £1,600 duck house became symbolic of the MPs’ spending scandal. The floating island, which clocked in at approximately 1.5 m tall and was based on an 18th century Swedish building sounds lovely–especially if you’re a duck–but seems a little irrelevant to matters of parliament.

Finally–a personal favourite–is David Heathcoat-Amory’s claim for manure. Heathcoat-Amory tried to claim £388 worth of manure, along with miscellaneous gardening costs such as £1.95 for sunflower seeds, £2 for mouse poison, and £6 for the use of a chainsaw, all for expenses accrued on a house he owned outright that wasn’t even his primary residence.

What can you claim?

So what can you claim? Well, HMRC is actually quite flexible on this, so long as you can defend the item’s inclusion as being essential to your business. Typical examples include:

  • Travel expenses
  • Rent
  • Bank charges
  • Delivery charges
  • Equipment costs
  • Stock
  • Utility costs for business premises
  • Telephone fees
  • Stationery & postage

HMRC has also accepted some seemingly outrageous tax return claims, such as the claim of a 23-year-old British woman employed by a gentleman’s club. She filed her boa constrictor for a tax reduction, and was approved after HMRC verified that the reptile was part of her act.

Then again, the HMRC isn’t alone in satisfying ridiculous claims. In the US, a woman even managed to write off her baby, after she proved that the child featured prominently in her curtain and blind company’s advertisements. The IRS allowed deductions on items such as baby photography and a stroller, though not the full $26,000 the mother had asked for.

What can’t you claim?

For the more unorthodox claims, you’ll need to spin HMRC a good story for why that cost is essential. Otherwise, you should know that the following are included in items that cannot generally be claimed:

  • Parking/speeding violations
  • Tuition
  • Childcare services
  • Gym memberships
  • Client entertainment
  • Duck islands (sorry, Sir Peter!)

For a more complete understanding of what you can and cannot claim from HMRC, visit the Self-Assessment helpline and Gov.uk’s Expenses if you’re self-employed resource.

Need more help on becoming self-employed? Take a look at our comprehensive guide to self-employment. 

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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