Mileage allowances

Mileage allowances

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I have a self employed client who provides professional services. She is about to take on a particular assignment on a "pro bono" basis.

I assume there is no problem about claiming mileage and other expenses related to this assignment in the same way as one where a fee would be charged?

Thanks in advance of your replies.

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By neileg
06th Dec 2011 10:07

Why?

This assignment isn't income generating. The expenses can't be related to another income generating activitity so why would they qualify for tax relief?

On the other hand, who will know...

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Basset Hound
By Cuchulainn
06th Dec 2011 10:17

Could it not be argued that even though she is not receiving a fee for this particular assignment, the fact of doing the job 'pro bono' would at least generate goodwill and/or positive PR for her business, and this could be construed as a reward of some sort for her doing it?

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By neileg
06th Dec 2011 10:36

Absolutely

Unfortunately, even if your argument holds water, this makes the expenditure capital in nature and you can't make a revenue deduction from profits.

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By Steve Kesby
06th Dec 2011 17:13

Sorry, I have to disagree Neil

There are many reasons why professionals undertake pro bono work.  It may be done for its CPD benefits ( a skill that isn't exercised may become "rusty") and any business that does a good deed really ought to advertise the fact.

The fact that an expense may help generate future income doesn't make it capital.  Unless a reasonably certain amount of income is predicted, the expense falls to be written off to P&L as incurred under generally accountancy principles, and accounting practice is the usual "measure" applied by the courts.

I think it probable that it can be argued that it's essentially marketing or CPD in nature.

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By neileg
07th Dec 2011 11:41

@Steve

I respect your point of view, but don't agree. However I think the issue is largely theoretical so I won't pursue this.

Cheers, Neil

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