Business Networking - Our 3 Favourite Tax Saving Tips
Does your business rely on customer referrals and recommendations to generate leads to help grow your business?
Do you have an active marketing strategy to generate more leads from referrals for your business?
Has your business ever engaged in a spot of business networking or referral marketing?
If so, you may looking to use a few tax efficient tax tips to accomplish these sales and marketing goals and help you save money from your tax bills too!
What is Business Networking?
To quote Wikipedia - "it allows the business person to build new business relationships and generate business opportunities at the same time"
We are massive fans of this low cost marketing process that allows us to generate qualified referrals that lead into profitable business.
We won't detail all the business networking opportunities that are out there, there are plenty of other great sources of information for Staffordshire and beyond we recommend you read.
Purpose of this blog post is to review the tax implications of doing this critical business activity for all SMEs, which are often the subject of much falsehood and misinformation!
Our 3 Top Tax Tips For Business Networking!
The 3 components of networking which Tax deductible are:
- Cost of the joining fees for the networking group
- Clearly, the membership costs have only been incurred for business reasons. If you were not in business then you would not have joined the group and incurred the cost. Consequently, these costs are fully tax deductible.
- If you're VAT registered, and have a valid VAT receipt, then you can claim back all the VAT on the membership fee.
- Cost of any food provided at the networking event
- This is probably where most of the confusion arises. At many networking events you will pay a fee for a breakfast or lunch or evening meal. There seems to be some confusion that the meal might count as a benefit-in-kind for the director/employee attending the networking event.
- However, ask yourself this - what is the main purpose of me attending the networking meeting? Is it the food or the networking? If it's the food then we would seriously question why you bother with the networking meeting. So, we will assume that the real reason you turn up is for the business networking.
- Because the food is only an incidental part of the activity, it is fully allowable as a business expense for Tax & VAT purposes.
- Cost of travel to get to and from the networking event
- Again, the only reason for making the trip was for business purposes. As a result you'll be able to claim your usual mileage rate back from the business for the number of miles traveling to and from any business networking event.
- If you incur toll fees getting to the event or parking costs once you're at the event then these are also fully deductible (and VAT reclaimable).
The bonus additional tax tip is:
- All the above are equally applicable to both Limited Companies and unincorporated businesses.
Our Business Networking Call To Action
If you know of any other great business networking tips relating to saving on your tax bill, or any other great business networking tips that can be shared with our readers then let us know via the comments or through LinkedIn.
Don’t be shy about claiming your business networking costs as a legitimate expense. These apply equally to limited companies or unincorporated businesses.
In summary then, Don't listen to the naysayers. Your networking costs are fully tax and VAT deductible despite what you might have heard to the contrary.
Business networking done correctly is fun and will massively boost your leads, opportunities and sales. It has worked for us, business networking can work for you!
For more great hints, tips and tricks about business networking or referral marketing, then click HERE and talk to our good friends at Conspicuous-CBM Ltd, Staffordshire's leading experts on the subject.
To find our more about our business planning services where we talk more on general business subjects to help our clients - CLICK HERE.
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Remember - Don’t Leave a TIP with the Taxman!