Allowability of expenses re. voluntary work that is conducted alongside identical fee-earning activity.
An individual has trained in a discipline and undertaken voluntary work in that field and is now qualified and able to take on a first fee-paying client. The business will be slow to grow so voluntary work (in two widely-separated geographic areas) will continue in order to ensure that the minimum number of hours are worked to satisfy Continuing Professional Development (CPD) requirements. The self-employment depends on membership of the professional body so meeting their CPD requirements is essential.
My concern is that the significant expenses (travel from normal place of work, subsistence, overnight accommodation, etc.) associated with the voluntary work are not directly related to any specific income. In the absence of sufficient chargeable hours, the voluntary work is required to allow this self-employment to continue so does that make the associated net costs allowable per the "wholly and exclusively" criterion?
The charities for which the voluntary work is performed either do not reimburse expenses at all or (in the case of one in the geographic area near the taxpayer's usual place of business) pays mileage at less than AMAP rates. Some permit their qualified volunteers to take on clients as private clients when time-limited charity-support is ended. Losses are anticipated for the first couple of years as a result of these heavy expenses (if allowable) and ongoing training costs but subsequent commercial profit is realistically foreseen. Are the net costs allowable?
Professional insurance was (per rules of professional body) required to cover pre-qualification voluntary work but can that only be charged pro-rata the self-employed period or could the full cost be claimed as pre-startup expenditure along with the printing, advertising and membership fees of professional body, etc.? Not much cash involved but I'd like to be clear on the principle.
- Moneysoft - technical query 185 4
- Let Property Campaign 157 3
- is photo id necessary to set up a direct debit? 37 1
- What would you do? 323 2
- Taxable income for previous years 352 8
- VAT position on EU supplies/commission 69 1
- Depreciation on purchase of software 136 2
- SA302 list of lenders accepting alternative 1,298 16
- App recommendations 321 4
- Defend your local inspector? 617 7
- accountant in Bristol 499 1
- New Company Director PAYE Question 758 20
- Exasperated by HMRC 2,137 19
- How long should one give Aweb … 704 9
- Resident and Non-resident 761 7
- Benefit in Kind - Director loan or not? 164 3
- Client in dispute with Customer over cancellation charge 411 16
- Working Hours Calculation - Rounding Hours up/down 139 2
- Self employed Self Assessment 397 2
- Applying for clearance before 5 years share ownership 172 2
- HMRC arbitrarily amending tax returns for higher rate child benefit charge 355
- Any knowledge of salesorder.com 343
- Chart of account segments; Balance sheet vs P&L 278
- HMRC RTI Filing Problem 251
- Goodwill and the Summer 2015 Budget 251
- Could and would anyone here carry out a hot file review of some non statutory audit work please? 242
- Electric Car 194
- S222 Charge 184
- Foreign Tax on Pensions 172
- What is the best acounting software for online international retail business? 171