Not claiming an expense to boost mortgage applcation

bequick

Hi,

I have had some equipment break this year and I've spent a bit of money on new equipment (£1800).

The equipment would be an expense on a business partnership with my girl friend. Profits are split 50/50. Although 1800 isn't a lot of money to some, this would drastically cut down the amount a bank would lend to us by approximately £6000 if they were to take into consideration both of our income.

My partner would still fall under the 20% tax band as she is a low earner.

Would it be worth leaving this off the spreadsheet as we would like to get a mortgage within the next 2 years? I don't really want to phone my accountant for advice incase he says that he isn't willing to allow that.

booksurr

if the payment was made out of a bank account in the name of the partnership/business then it has to be accounted for somewhere, either as a business expense or as a personal (taxable!) drawing

if there is no such audit trail to show where the money came from, then by all means do what you want with it, just don't try to claim the expense at a later date

[Deleted User]

If the accountant actually provided you with a set of accounts this type of expense would not normally be shown as it is a capital item. It would obviously be claimed as a capital allowance on the partnership tax return - I would claim it. You can produce a legitimate set of accounts to the lender and also claim against your taxable profits. What were the items?