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.
Replies (5)
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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...
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.
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.
@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