We’ve just finished this year’s Tax Return season and it struck me just how odd some of the expenses were that my clients attempted to claim. I then posted a question on unusual expense claims on an accountant’s forum I belong to and was amazed at the huge response.
So here’s my light-hearted compilation of the best from my and others’ experience:
1. Artificial Leg
Many years ago a client of TerryD, a company run by an Italian gentleman who had emigrated from Sicily, had claimed under sundries for the cost of an artificial leg. It turned out that the recipient of the leg was a customer who had suffered a freak accident with a sledge hammer.
2. Deodorant
Craig2k4 had a client who claimed for a monthly subscription of £20 for a “scientifically proven” deodorant which instantly makes women attracted to you, which he’d claimed under marketing costs on the grounds that he was trying to increase his female clientele.
3. Muscle Cars
One of my clients had a Nissan drag racer and he claimed everything as a business expense, including VAT. He ‘claimed’ it was for advertising, as he would take clients out for a ‘burn-up’ and that’s how he got his business.
4. Breast Augmentation
Phil3K had a female entertainer who had claimed the cost of a breast enhancement. Her earnings had shot up after the procedure which she said made her much more confident. She then had a Tax Enquiry and the Inspector said there was no way this was allowable, that was until he met her. After which he then allowed 50% of the claim.
5. Lab Test
One of my farmer clients brought his invoices in and among them was a lab report for a bull’s sperm test. In case you’re interested the extraction method was described as ‘manual’.
6. Prostitute
ZacCvb recently had a meeting with a husband and wife partnership client and whilst running through queries he highlighted a £150 sundries expense. The writing in the cash book was not clear and he jokingly commented that the word looked like “prostitute” to him. It was!! Apparently the husband had been caught out and the wife, who did the books, insisted that it went in the cash book to balance petty cash!!
7. New Teeth
Only last week a client came to see me to bring in some additional expense invoices to reduce his £50k plus profit and £11k Tax bill. Amongst the receipts was an invoice for £6,000 for dental work. His justification for the claim was that as a salesman his appearance, especially his smile, was critical to selling and as he’d damaged his teeth in a car accident; he thought it was a legitimate expense.
8. Condoms
LamertPm tells of a client interview, when he told the client that he couldn’t allow an invoice for 3 gross of condoms as an expense. The client then explained that as an underwater salvage contractor, he used them to waterproof explosive charges planted on the wreckage being recovered.
9. Double VAT
My final oddball claim concerns a publican client who had registered for VAT halfway through the year. I did his first VAT Return and he decided to them himself thereafter. When preparing his Accounts I checked the VAT quarter he’d done himself and discovered that the first VAT period payment of £4,300 had been reclaimed in its entirety as Input VAT on the subsequent Return on the grounds that it was a legitimate expense!
If any of you would like more detailed information on any aspect of Expenses & Tax , send me an e-mail and I’ll be pleased to advise further.