Goodwill expenses

[051119]

Hi all,

I am a director of a small organisation and we regularly hold meetings at my flat.

It was suggested by someone else that I am reimbursed a fee of £10 per meeting for the cost of hosting the event, in return for me providing refreshments, and this was agreed by the other directors.

Now obviously some aspects of this I can account for and provide receipts for (eg. biscuits) but other things I can not (eg. tea bags, sugar, electricity).

Is there some way I can account for the "goodwill" involved in hosting such an event? We currently reduce our tax liability through expenses.

 

[DFL Accountants Ltd]

Hi

I am not sure from your post but I think there are 2 things to consider:

1. How the company accounts for the expense

2. How you account for the personal income, and offset your expenses against it.

Answers:

1. You should invoice the organisation £10 for each meeting (a 'petty cash' style voucher would do) - the company then records this as a normal expense under Sundry Expenses (or another suitable nominal account).

2. Similar to the calculations for a Director using part of their home as an office you can calculate a proportion of your household expenses (light & heat, water, etc) to offset against the £10 received for each meeting - then assuming you are showing the income on your personal tax return you can offset the calculated expenses against it - probably showing that there is no net profit made by you on these meetings, therefore no additional tax liability.

You should also have an agreement signed between you and the organistaion detailing this 'use-of-home' to provide you with additional protection from HMRC.

- If this is what you meant by your post, and you would like guidance on how to calculate the 'use of home' expenses then please 'PM' me with you e-mail address and I will send you a 'rough guide' and a template 'agreement' which you could adapt.

If this is not cover what you wanted to know then please restate you query.

Kind regards