02 Sep Don’t Be Tempted To Deduct Personal Items
There is something of a myth that if you have your own business you can ‘put’ expenses through the business (and if the business is VAT registered, reclaim the input tax). This is very dangerous. Not only does it create extra work as these items need to be disallowed in the accounts, further, if they are left in as deductions, it may trigger enquiries into the accounts and possibly an investigation.
Only expenses that relate wholly and exclusively to the business are allowable as a deduction against profits. Under no circumstances should private expenditure be treated as a business expense. The temptation to put private expenses through the business should be resisted at all costs.