Limited Company Volunteer Expenses

Enterprise_Warrior

Just had a client ask if he can do some volunteer work within his trade and claim the expenses that go along with it through his Ltd company.

Not come across this situation before so any help would be appreciated.

Thanks

EW

MarieNoelle

Would the expenses be incurred wholly, exclusively and necessarily for the business?

Enterprise_Warrior

Basically he is doing the same thing as he usually charges for but on this occasion is doing it for free. He wants to claim the same expenses as he would if he was charging for the same job.

On a whole, it seems the answer is to make the claim but as it is volunteering, wasn't sure if it is the same as joe public making a claim.

Bmer82

expenses and volunteering is a tricky one at present Brighton FC got named and shamed under NMW regulations for paying expenses to a volunteer

Enterprise_Warrior

I read on HMRCs website about expenses paid to volunteers means that they have to be paid NMW for the work they do. Which is why I asked the question.

On this occasion though, he is not getting paid expenses by the event organiser and wants to claim through his Ltd company to reduce his tax.

Bertie

Who is getting the benefit here?

Donor and donee seem to be used interchangeably.

To answer the initial post, assuming nothing is received in return, I see no reason why the cost price of any equipment given can not be deducted.

I'm relating this to a charitable donation, one which will be small and to a local charity - from memory - cash, equipment* and an 'employee' are viable deductions, deductible assuming there is no foul play.

What is an employee? A real employee or the sole Director / Shareholder of a company?

I wouldn't entertain calculating any mark-up on the charitable donation.

Hand on heart I've never faced this question in the past. But common sense definitely dictates you can not account for any form of profit foregone.

If a light switch (if an electrician..) cost £10, put no figure other than £10 through the accounts.

*Equipment being an equal to trading stock or supplies is open to interpretation.

It is definitely a question which is open to interpretation for sure.

Enterprise_Warrior

To add more details...

The client provides freelance security and he has been asked to provide security at a music festival by the event organisers as a volunteer, so will not get paid for the work.

If he was doing it as a paid job through his limited company, he would claim mileage to the event and food he would eat while at the event.

As he is not getting paid, he would like to put mileage and food through his limited company to reduce his taxable income for the year.

Bertie

Ok, the detail comes later, sounds like a client...

So this isn't a registered charity, scouts, nor a Sunday league children's football club -

My initial response is now null and void.

Massive, massive fail if ever there is to be a HMRC compliance check on your client. Gigs, festivals, pubs, bars and most inbetween are ripe with cash payments, yet he wants to claim expenses. (Same with football stewards!)

Cake and eat it!

Maybe I can be proved wrong?

Seriously - no.

Enterprise_Warrior

Bertie

The guy is legit. He invoices all his clients when he is getting paid for work. He even wanted to start taking a larger salary above the LEL because he thought it was wrong that he wasn't paying any NI.

I assume he is doing this job for free to gain some more contacts that could bring in future work.

burg

My thought is yes. My guess is that he is doing this in hope of future work which will actually be paid. Therefore his costs incurred are a type of advertising if you like.

Bertie

Valid.

To me every case should be judged on its own merits.

Just because performing X results in Z being deductable doesn't mean the variable of Y can be taken as being entirely true.

You have more information at hand that I do, I know only what you've posted in this thread - I personally wouldn't feel comfortable with it. To me it doesn't ring true. Maybe I'm just paranoid.

I'm neither HMRC, nor the director confirming the accounts and returns so -