Following on from our last blog post about claiming a ‘working from home’ expense from either your employer or within your self employed accounts – let’s delve deeper!
As discussed, with many self employed traders preferring to ‘work from home’ from the relative comfort of a membership club, many of these clubs have started to provide dedicated office facilities and work stations so that their members can enjoy this added benefit of flexible office working.
By taking this into account, we should surely be able to expense the full club membership within sole trader or Limited company accounts?
HMRC take a different approach to this. Even though popular clubs such as Soho House, David Lloyd and Total Fitness now offer meeting rooms and excellent wifi – the fact that these clubs also offer leisure facilities means that there is no clear distinction between the business and leisure proportions of the monthly membership fee.
As such, simply paying for your monthly membership out of your business account still fails the HMRC criteria for an expense – with the expense needing to be ‘wholly and exclusively’ for the purpose of running the business. As previously mentioned, a leisure club membership would fail this test.
Ok the good news! We can still expense any wholly business related visits to a club and these should be properly recorded within your accounts. Taking a client for lunch at your club or logging a week of work and the hours that you have worked could be expensed back to the company. HMRCs regulations are still strict on this though! So you would have to prove that these specific visits were exclusively for business and not for leisure, if challenged by HMRC.
Sounds tricky but with the help of an accountant, you can definitely maximise the potential of any flexible working spaces that you use. Get in touch to find out more!
