FSB Subscriptions

FSB Subscriptions

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Could anyone help? We have a dispute on whether or not subcriptions charges to the Federation of Small Business are deductible. I know it is not a material amount however it would solve a long running dispute between the partners in the office. Do they fall into ICTA S201 or not. Can anyone tell me how i can find out for sure. I have already asked FSB but probably not got through to the right person.

Many Thanks
Michelle Ward

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By AnonymousUser
28th Oct 2002 13:53

Inspectors Manual content
The Inspectors Manual at IM1081 et seq is worth a look. The general thrust is that you are entitled to deduct that part of your total subscription to a trade organisation as is applied towards admissable expenses by the organisation.

Often trade associations make arrangements with the Inland Revenue as to what proportion of subscriptions is allowable as a deduction. Suggested first step is to ask the association concerned if they have an agreement. If not and there is no useful information to be had, ask yourself what the subscription covers and apportion.

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By AnonymousUser
25th Oct 2002 11:06

Tony Neville Simon, Thanks but........
I have been deducting them thinking they are a trade association and the wholly, exclusively principle but was told (by my boss) that that principle does not come in to play if they is a statutory provision. Is he wrong?

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By colin.abbeytax.co.uk
25th Oct 2002 12:29

Wholly & Exclusively?
There are elements to the FSB membership which I believe the Inland Revenue would argue is 'strictly' not allowable; namely the tax and VAT Professional Expenses Insurance (PEI). I met with Inland Revenue Head Office 18 months ago to discuss the allowablity of PEI and they were insistant that the 'pure' answer is that PEI is not allowable, but agreed that in practice the Revenue would not be wanting their Inspectors to be pursuing such 'trivial' matters!

Whilst the PEI is a relatively small element of the FSB membership, I have no doubt that the Revenue could argue that strictly it isn't allowable. Back in the real world, however, I cannot believe that they would take up the point!

Finally, in the near future, I understand that a Tax Bulletin will be issued by the Revenue on this and related issues.

Colin Davison
Abbey Tax Protection Limited

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By Tony Crook
24th Oct 2002 18:22

Deductible
Although they do not appear to be deductible under s.201 ICTA1988, I agree with Neville: I can see no reason why a deduction should not be claimed under s.74(1)(a).

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By Neville Ford
24th Oct 2002 12:30

Basics
Surely the test of "wholly and exclusively for the purposes of the trade" is the deciding factor. As "necessarily" doesn't come into SchD, relevance to the particular trade is immaterial. Also, there are definiable business benefits to membership that could justify easily it as an expense.

Is there any private use, I think not. So where is the problem ?

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By 2218842
24th Oct 2002 10:32

I think so
I don't have time to give any statutory support to this, but for what its worth I would have allowed FSB subs without further thought.

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