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.
- Sage Instant Accounts Complete De-install problem 88 3
- Credit against UK NI for NI paid to EEC Countries 228 1
- will this work for IHT 250 2
- Best software for small practice? 633 20
- Paid too much !! 249 2
- Auto enrolment confusion 1,743 39
- I am 34 years old, am I too old to start a career in Accounting ? which is the best way to pursue it 254 7
- Taxfiler been down since mid-afternoon 202 5
- Anyone having problems with Taxfiler 483 17
- Gifting Shares to a Limited Company 119 1
- Company separation for Wholesale & Retail businesses 96 1
- Selling a VAT Qualifying vehicle at a loss 99 1
- Paying dividends to Ordinary shares with different nominal values 476 15
- 2012 13 HMRC QUERY 749 11
- Sports Sponsorship 149 1
- New Shareholder and Purchase of Own Share 266 17
- Opt To Tax Refund 213 2
- Divorcing husband, both 50% owners of a Ltd business 252 6
- Is the CT61 return dead? 1,327 14
- How did you recalculate your payroll fees 1,273 21
- Self employed and HMRC Worldwide Subsistence Rates 767
- Interest paid - do new rules affect Tax Credits? 454
- Market Invoice (P2P invoice discounting) tax treatment 275
- DTA tie-breaker issue 262
- Tax on internet ad sharing income 247
- CGT for NOn UK residents 222
- Apprenticeship Levy 202
- What are the tax implications of overseas sales through a UK based company? 191
- Capital Gains personal representatives 181
- Just checking re PSA 175