In March 2020, Yasser left his job at a top Law Firm as the pandemic took hold. He decided to take a break and then consider working for himself doing what he loves. In December 2020, he started a catering business providing responsibly sourced vegan meals to clients. Alongside cooked meals delivered by courier, he sells meal kits to allow his clients to create the tasty meals themselves in the comfort of their own homes. Business was very good throughout the pandemic. However, as the cost-of-living crisis took hold in 2022, business slowed down and he is worried that his business might collapse although he does not actually know for sure if it is profitable or not. He is not good with paperwork, and he has approached you for advice on the tax implications of some of the transactions to help him to compile his accounts.

1. In March 2022, the business slowed down so much that he was worried the ingredients he had stocked to make meals and sell meal kits would go off. He cut the price of his meal kits to encourage his customers to buy more and entice new customers. He sold his kits at 60% discount. In the end he received 1500 less than he had spent on buying the ingredients.

2. In April 2022, he hosted a soire for a small number of guests at his house in Fulham. The guests were celebrities and other wealthy residents of the borough who he hoped would become customers. He served a lavish vegan dinner and also gave them some of the meal kits in goody bags in order to entice them to buy more. Although he gave away 45,000 worth of products to guests at the event, none of them went on to buy anything.

3. In mid-March 2022, he lost a potentially lucrative contract to sell his meal kits through an online store. The online store had contracted to avail his meal kits on their website but declined to stock them at the last minute. They offered him 3000 as compensation. Although he had not yet spent any money on the contract, he lost the opportunity to earn a significant profit.

4. In April 2022, he was accused of selling non-vegan food as vegan. An influencer he had given meal kits to as part of a promotion accused him of selling ordinary condiments like mayonnaise as vegan when in fact they were not. The allegations are unfounded, but he was so terrified of bad publicity that he paid her 1500 compensation to keep her quiet. He also spent 2000 on legal fees in this case.

5. In May, he spent 50,000 refurbishing his house and added an extension to serve as a base for his business.

Advise Yasser on the tax implications of the transactions above.