I did something this week that I rarely do, and something I should do more. I took a day off and had a family day with the children. We went to the cinema—an enjoyable day for all and great for mental health. This is LinkedIn, so I need to somehow make this related to tax. While the day was fun, enjoyable and relaxing, it was not a business expense.
If you look online, people will tell you can claim almost anything as a business expense. You and your wife are the only directors of the company claim that date night is a business expense. I saw one client claim their daughter’s French grinds as a business expense, as the daughter dealt with the French suppliers. Some will claim that, as all 5 of us who went to the cinema are employees of the company, that makes it allowable. That might be hard to explain if not all employers were offered or tried explaining the business case.
To be allowed to claim expenses on your tax returns, they must be wholly and exclusively for the business. For example, the French grinds sound ok until you also hear that the daughter is sitting French for her Junior Cert next year, which raised a little doubt.
If you wish to see how literally authorities treat this test, have a look at the HMRC treatment of clothing worn by self-employed barristers against self-employed dancers. The clothing worn by barristers is seen as not allowable where it provides warmth, decency and can be worn outside, compared to the stage clothes of dancers, which provide no warmth or decency and can’t be worn outside, so are allowable.
If in doubt please contact a professional before claiming that item as a business expense.