SUBSISTENCE - TO ALLOW OR NOT TO ALLOW

SUBSISTENCE - TO ALLOW OR NOT TO ALLOW

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I have two new clients who tell me that their previous (chartered) accountants, allowed a set amount per day for 'subsistence'. They are itinerant in profession and travel around for work, however they rarely stay away overnight and will often work in the same place for several weeks at a time before moving to the next contract - some contracts can last for many months but the locations can vary from day-to-day or week-to-week or sometimes not for some months. I would normally allow proper receipted expenditure in this area but am unsure as to whether a 'flat rate' deduction is available for self-employed traders.

They are unclear on how much the previous accountants allowed per day and it is unclear from the accounts whether they did or not, or if they did, how much would have been claimed, I do not have any breakdowns of figures, just the income and expenditure trading statements.

I would greatly appreciate it if anyone could shed light on the matter or point me to the correct legislation/guidance?

Thanks!

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By Steve Kesby
10th Jan 2012 10:43

Are they journalists or otherwise engaged in the media?

If they are, I think I might know the chartered accountacy practice you're referring to.

The only chapter and verse there is, is contained in S.57A ITTOIA 2005, inserted by SI2009/730.

There is no basis for using "flat-rate" deductions. Estimates would be acceptable (that would probably be "flat-rate" in nature), if they are supported by sample data, covering a representative period.

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By accountingterrier
10th Jan 2012 10:39

Thanks Steve, that helps.

I do have some receipts so can take an average/estimate from that - I don't think it's going to be the £15 p/d that the clients' think they can have though!

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