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Claiming input tax as expense for director’s libel case.
A high-profile client I act for has had some bad publicity in a local newspaper which reported on an incident in a pub involving violence after too much alcohol was consumed. He intends to sue the newspaper for libel and to ‘clear his name’. Because his business activity involves public speaking and acting as MC at high-profile events as well as giving motivational seminars he thinks that the cost of his legal fees should be paid by his company and that input tax should be claimed on the fees paid to his lawyers and the expenses deducted for corporation tax purposes. His argument is that the company turnover will decline massively if he is unable to clear his name – he is the company’s sole director and fee generator.
My view is that as long as the letter of engagement is with the company rather than...
