Business Expense Claims

Sometimes clients have some wacky ideas as to what constitutes a business expense claim. Here are some ways to manage your clients when their claims take a turn for the “creative”.

We all have that one client. The one who skirts the line between acceptable and “what???” The one that drives you crazy, but you just can’t bring yourself to say good-bye to.

Have you mentally written this letter for one (or more of your clients)?

Dear Valued Client,

I know you are hoping to pay as little tax as possible. Nobody enjoys writing a large cheque to the government. But, there are business expenses you are allowed to deduct and there are “business expenses” you are not allowed to deduct. 

Let’s get real. No, your trip to the Caribbean cannot be claimed as a business expense. While we truly believe that you are doing research while sitting on the beach, the CRA may feel differently. We know that you make phone calls to your office, check your bank accounts daily on line and work on next year’s budget while enjoying your drink with a little umbrella in it. But really, it’s just not going to fly!

 While we’re on the subject:

Your daughter’s wedding is not an “entertainment” expense because your clients were invited.

An expensive puppy from a breeder cannot be classified as “security measures”

Your 4-year old is not a “part-time employee”.

 Just sayin’,

Your Hardworking Accounting Team

 It’s a letter you can never send to your client (and still keep them), but how can you approach them to make them see reason?

One way might be to remove the “grey area” for business expenses. Share this this link to the CRA website with your problematic client. This link contains a simple, but comprehensive list of what the CRA considers to be viable operating expenses. Here’s how a productive letter to your client might sound:

Dear Client,

Since your year end is fast approaching, I thought you might benefit from a refresher on what the Canadian Revenue Agency considers a reasonable business expense. You don’t want to miss any opportunities to save! But, keep in mind that anything else NOT on this list might get you an unexpected visit from a CRA auditor.

Here’s the article: Allowable Business Expenses Claims in Canada


Your Hardworking Accounting Team

When you’re done schooling your unruly clients, here’s a great article about unbelievable and outrageous claims from some truly creative small business owners. Maybe your clients aren’t so bad, eh?

Here are 7 of the Craziest Illegal Tax Deductions Ever Claimed

Ultimately, some creative clients may just need a on-going ‘fix-it’ solution to help clean up and maintain their files. If you have a client who desperately needs our help, let us (or them) know.

At Black Tulip, we have 23 years of experience providing client-focused administrative back office services. We strive to fully understand your business in order to deliver financial reports, increase your company’s efficiency, and ultimately, simplify your life. To find out more about our bookkeeping services and help your company reach the next level, contact us today!

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