A Valentine’s Guide to Tax-Deductible Romance (With HMRC Watching From the Bushes)

Valentine’s Day. A time for roses, chocolate, and whispering sweet nothings like,“Don’t worry, darling. It’s tax deductible.”

But before you start expensing heart-shaped pizzas and “team-building prosecco,” let’s talk about which employee expenses are truly tax-deductible, what risks lurk in the shadows, and what documentation you need to avoid getting ghosted by HMRC.

Because nothing kills the mood like an audit.

The Ones You Can Love: Legitimate Tax-Deductible Expenses

Not every expense is a forbidden romance. Some are stable, committed, long-term relationships in the eyes of the tax authority.

Here are a few that usually get the green light:

1. Travel (The “Work Trip,” Not the “Weekend Getaway”)

If you're travelling wholly and exclusively for work, you can generally claim:

• Train tickets

• Mileage

• Flights

• Hotels, provided they are reasonable and not necessarily the honeymoon suite

• Meals during overnight stays

If you add two extra nights “to explore the city with your soulmate,” those nights are now in a complicated relationship with “Non-Deductible.”

2. Client Entertainment. Proceed With Caution.

Taking a client out for dinner? Lovely.

Deductible? Not for Corporation Tax in the UK.

You can usually claim the VAT if the rules allow, but the cost itself is often not tax-deductible for the business.

Think of it as buying someone flowers and getting emotional satisfaction but no financial return.

3. Staff Entertainment (The Office Valentine’s Party)

Annual staff events can be tax-free and deductible for the company if:

• It is open to all staff

• It costs £150 or less per head per tax year, including VAT and transport

• It is an annual event, such as Christmas, a summer party, or even Valentine’s if you're bold

Go over £150 by even £1? Congratulations. The whole amount becomes taxable.

That is not romance. That is betrayal.

4. Equipment and Work Essentials

Laptops. Phones. Software. Office chairs that do not destroy your spine. If it is necessary for work, it is usually deductible.

If you expense a “luxury ergonomic velvet chaise lounge for productivity,” prepare to explain that love story in detail.

Red Flags: Expenses That Will Break Your Heart

Some expenses look work-related until HMRC swipes left.

“Dual Purpose” Expenses

If an expense has both personal and business benefit, it must pass the wholly and exclusively test.

Examples:

• Gym membership “for networking”

• Designer clothes “for client meetings”

• Valentine’s dinner “where we briefly discussed strategy”

Nice try, Romeo.

Excessive or Lavish Spending

Yes, technically it was a client meeting.But did it need champagne on a yacht?

Tax authorities do not love extravagance disguised as strategy.

If it feels like you would be embarrassed explaining it out loud in an audit, that is a clue.

Documentation: Your Love Letters to HMRC

If expenses are your relationship, documentation is the prenup.

Without it, things get ugly fast.

You will need:

1. Receipts (Yes, All of Them)

No receipt equals no evidence.No evidence equals heartbreak.

Digital copies are fine. Just make sure they are legible and stored securely.

2. Clear Business Purpose

For each expense, ask:

• Who was there?

• Why was it necessary for business?

• What business was discussed?

“Team morale” is not a detailed explanation.“Quarterly planning session covering 2026 growth targets” is much better.

3. Mileage Logs

If claiming mileage, record:

• Date

• Start location

• End location

• Purpose of journey

• Miles travelled

“Drove around thinking about strategy” does not count.

4. Consistent Expense Policy

Have a written policy that covers:

• Spending limits

• Approval process

• What is claimable

• What is not claimable

Without it, your expenses process becomes an open relationship. Those rarely end well.

Things to Consider Before You Swipe “Submit”

Before you hit “approve expense,” ask yourself:

1. Would I be comfortable defending this in an audit?

2. Is it genuinely for business?

3. Is it reasonable?

4. Does it follow company policy?

5. Do I have proof?

If the answer to any of these is “ummm,” pause.

The Romance of Risk

What actually happens if you get it wrong?

• Disallowed expenses

• Extra tax bills

• Penalties

• Interest

• Possible benefit-in-kind charges

• Reputation damage

Nothing says “Be Mine” like a surprise compliance check.

Final Thoughts: Keep the Spark, Lose the Risk

Expenses should not feel like a forbidden love affair.

When handled properly, they:

• Support growth

• Reward teams

• Strengthen client relationships

• Remain fully compliant

When handled carelessly, they:

• Trigger audits

• Cost more than they save

• Turn into administrative soap operas

This Valentine’s Day, commit to a healthy relationship with your expense policy.

Be transparent.

Be reasonable.

Keep the receipts.

Because true love may be priceless…

But your employee expenses absolutely are not. 💘