“My mate says I can claim for my club membership…
Be mindful when choosing a club to hold your meetings. Think how likely it is that HMRC will believe that your membership is for business purposes only. They assess the likelihood that you chose the club for your own personal benefit.
The type of “club” can influence HMRC’s decision; claiming for a membership at the “Soho House Meeting-Rooms”, gives a more business orientated impression than your local gym or golf club for example.
As mentioned in our previous “My Mates says..” blogs, the expense must be wholly and exclusively for business purposes in order to be allowable for claims.
HMRC consider club memberships to be a personal and social expense (as club members receive privileges from their memberships).
Cases have been won if the personal/private consequences are purely incidental.
For example, a director found that there were other facilities available at a club where he held his meetings in London. He used that club because they were the least expensive in the area and the availability of these facilities were not foreseen before making the decision. The courts approved his case because the benefits were deemed to be purely incidental.
Other cases have been lost on the basis that the personal benefit was a predictable benefit.
A bank manager lost his case because his club membership was used to make social contact and keep in touch with his customers.
Even though the whole purpose of the expenditure was in the performance of his duties, the courts deemed that the personal element wasn’t incidental.
In summary, HMRC will not allow you to claim for the club membership unless you can prove that the private privileges are purely incidental and unavoidable. This makes it very difficult to claim that your club membership is wholly and exclusively for business purposes.
So before claiming for your golf membership, consider what HMRC’s stance might be. Otherwise it could make a bad round of golf even worse!
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