Knocking $4,000 off my tax bill by having fun

Posted by Al on October 18th, 2007 .

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When this post goes live I should be sat on a train on the way to the British Innovation Show, where I’ve got free press access to the event. This is the sort of show that I’d enjoy going to anyway and the fact I can do it as a legitimate business expense (i.e. offset any costs against my tax bill) is an added bonus.

As I’m in the UK and am a higher rate tax payer I pay 40% tax on the majority of my earnings which hurts, though in some ways its good to write big cheques to the Inland Revenue as it means you must of earned a fair bit more (though I must admit it still hurts writing those cheques). We’ve written a posts before on what cannot be written off against tax so this post is about the flip side of the coin.

The innovation show I’m attending will cost me a few hundred in travel and sustenance expenses (the train system here is legalised extortion), I’ll also be buying and reading a self help book or two on the train which I’ll charge to my business.

After the show I’ll be catching the tube to Heathrow where my PA (aka girlfriend) and I will be flying to Brazil for a meeting with one of my writers about a future joint site. Whilst in Brazil I’ll also be going to watch Lewis Hamiliton win the Grand Prix and be the first driver to win the world championship in his rookie year (fingers crossed). I’ll write about my experience and review the travel company on a new blog that I have in the pipeline about days out and holidays so that too will be a legitimate business expense.

All in the weekend will cost about $10K which would normally be taxed at 40% but as it’s a business expense it will be offset. I have been planning this post for a while and came across something very similar today on W Revenue so thought this would be a good time to write about it.

Usual disclaimer here, check with your accountant and/or your tax authority these are just my opinions and experiences and I am in no way an expert in tax though to the best of my knowledge (and my accountants) it’s okay.

This entry was posted on Thursday, October 18th, 2007 and is filed under Miscellaneous . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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22 Comments »

Comment by Matthew from GadgetVenue Subscribed to comments via email
2007-10-18 10:37:57

It’s cool when you can mix expenses in to travel to go somewhere for a business purpose :) Now that you have the mobile version of SMM I guess we can expect frequent updates on your travels ;)

 
Comment by Ashley from Quick Whois Subscribed to comments via email
2007-10-18 10:43:58

This is exactly what i do with one of my sites, there are certainly some tax savings to be had.

Comment by Ashley from Quick Whois Subscribed to comments via email
2007-10-18 12:04:44

Oh and forgot to say have a great time, and lets hope Lewis wins!

 
 
Comment by Tomaz Mencinger from Financial Freedom Ideas
2007-10-18 10:56:03

Yes, but hopefully the IRS is not reading your post right now otherwise they’ll find a loophole and get those $4000 you “owe” them. ;)

 
Comment by Hadi from Affiliate Odyssey Subscribed to comments via email
2007-10-18 11:03:13

I’m now officially the most envious affiliate newbie in the world.

Give Lewis a shout from me - needless to say he’ll probably hear me cheering from my living room!

Have a great trip

Comment by Garry from Photography Basics Subscribed to comments via email
2007-10-18 19:06:46

I’m pretty much up there with you on the envious rankings…. still, in a year or so, this could be us writing these sort of posts and making all our own dedicated readers feel very envious!

 
 
Comment by Al from Al Subscribed to comments via email
2007-10-18 14:48:03

Thanks everybody. I’m currently reading this from the British Inovation show. The day has been some what eventful so far as some bastard stole my wallet with all cash and cards. So the weekend is going to be memorable for a few reasons so far.

Comment by Garry from Photography Basics Subscribed to comments via email
2007-10-18 19:07:57

Damn Al, not a good start to the weekend. I hope your weekend goes a little better (or has gone a little better depending on when you read this) and Lewis does the job on Sunday.

 
 
Comment by Al from Al Subscribed to comments via email
2007-10-18 20:11:11

It has improved thanks Garry0 Currently sat in a lounge drinking free alcohol and waiting to board :) . The positive side of the wallet swipe is I now can’t spend silly amounts of money in Brazil and I’ve got a topic to write about on Monday, though I’ll be using my phone as I had intended buying a laptop tax free at the airport. bugger.

 
Comment by Lizard Wisdom
2007-10-18 20:14:55

Ah, the joys of running your business as a business. In other words, not just everyone (at least in the US) can claim business trips on their taxes. They can only take advantages of certain tax write-offs if they have the proper business structure.

There are some great advantages to playing the game the right way!

 
Comment by Kirsty from Nerdy Nomad
2007-10-18 21:57:26

This is a timely post for me because I’m trying to sort out tax stuff now. I’ve only recently started earning decent money online and have to sort something out asap. I guess that means consulting an accountant… who knows.

But your post is interesting because I operate travel sites and I’m about to take my show on the road. Everything I do will be written about and added to one of my sites… I wonder if I’ll be looking at some huge tax savings.

Got to go do some research!

Comment by Neale from Barbados Info Subscribed to comments via email
2007-10-19 12:01:20

Kirsty considering you couldnt get a g check each month last year & now your talking accountants very nice :)

 
 
Comment by Al from Al Subscribed to comments via email
2007-10-18 22:04:17

That’s certainly worth looking into Kirsty. If you have travel sites and are writing about your journeys that sounds like a business expense. If you paid somebody else to do the same it would be a valid expense for that sort of site.

Like I said in the post take professional advice though.

 
Comment by Justin Cook from SEO Toronto Subscribed to comments via email
2007-10-18 22:06:08

And one other benefit as well - by writing this post you get plenty of financial adsense ads, which should have a nice high CPC

 
Comment by Kirsty from Nerdy Nomad
2007-10-18 22:14:45

Sounds good, will do. Can you or anyone else recommend an accountant in London? Are there any that specialise in internet businesses?

 
Comment by Carl from Dension Ice Subscribed to comments via email
2007-10-19 08:00:54

Hmmm…so if I had a site about supercars…. :)

This post has reminded me that I need to find out where on earth my accountant has disappeared to!

 
Comment by Humphrey from IT Drive Subscribed to comments via email
2007-10-19 18:27:15

Have a friend who runs a movie review blog. He writes off every movie he goes to and every DVD he buys..

 
2007-10-20 03:19:15

Becoming a paid travel writer is one of the best ways to be able to write off your travel.

Comment by Justin Cook from SEO Toronto Subscribed to comments via email
2007-10-21 12:49:12

Being a paid blogger, I could technically write off anything I buy, as long as I review it, no?

Comment by Al from Al Subscribed to comments via email
2007-10-26 12:21:28

I think that would depend what you do with it afterwards. Say you bought a plasma TV and reviewed it, you’d still own a Plasma TV which is an asset rather than an expense (i.e. you business is now worth what it was + the value of the plasma). The good thing about reviewing events is you do not have an asset at the end, apart from the memory and I don’t think they tax memories yet :) .

(Comments wont nest below this level)
 
 
 
Comment by John Motson from DNXpert.com Subscribed to comments via email
2007-11-09 08:49:34

Lewis lost… and he is moving to Switzlerland now.

I HOPE YOU ARE HAPPY :) !

Only joking.

How was the trip to Brasil?

Did you go to Copacabana?

 
Comment by Bill Piker from Hospitality and travel Subscribed to comments via email
2008-07-27 11:57:31

in the end few travelers and business travelers at that do a final tally and evaluation of costs - true costs , total costs and real costs
How do the costs compare to the end results of the promotion ?
At the end of the day one has to consider and evaluate - was it productive ? Did it bring in extra and additional business ? Did it pay for itself and was it all worth the time and effort ?

 
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