Membership of professional bodies

jilt

I have a new client who is a retired statistician but carried out consultancy work until last year. He is a member of the Royal Statistical Society and the Intertnational Statistical Institute and previously claimed the membership fees as an expense.

He was very ill last year and no longer undertakes consulancy work but does receive royalties for statictical books he has written. He wishes to retain his membership of the two professional bodies but I'm inclined to say that these are no longer a tax allowable deduction as he's no longer undertaking any work just receiving royalties for books previously written.

Does anyone disagree?

PGM

I think you're right Jilt, unless your client can argue membership still helps market books or back up his qualification which then helps sell books?

Maybe clutching at straws here

hunterhouse

It may be useful to consider the situation in the following way:

If the Client remains registered as self-employed and intends to/could conceivably undertake work at some near-future date then there is no immediate need to disallow the expense. Lack of work in any one year would merely result in no profit or a loss for a year - a phenonomen that is not unusual - particularly in the current economic climate. Clearly this situation could not be maintained indefinitely but in the short term, there should be little controversy and I suspect you would create a better impression in your Client's eyes.

However, should the expense not be claimed/disallowed, all is not lost. Your client may do well to contact his professional bodies and advise them of his situation. There is a good chance that retired members are eligible for reduced fees which may be worth more than the tax allowance for working members!

I hope this helps.

Hunterhouse

jilt

It turns out that he is chairman on a voluntary basis for a couple of statistical societies (one of the ones he pays membership fees to) and has set up an organisation himself and therefore incurs some expenditure in order to fulfil those roles so we can offset that against his income from royalties on his books.

Thanks for your input guys.