Sole Trader - Mystery shopper - query

kemlynroader

Hi everyone.

Help please. For assignments that I carry out which involve no payment from the mystery shopper company I carry out work for but I get reimbursement of the cost of the meal, how should that be reported? Am I able to claim it as a meal expense? 
I'm using Freeagent so extra bonus points if you can guide me through how to record it

Thank you

DullGreyGuy

kemlynroader said:

Hi everyone.

Help please. For assignments that I carry out which involve no payment from the mystery shopper company I carry out work for but I get reimbursement of the cost of the meal, how should that be reported? Am I able to claim it as a meal expense? 
I'm using Freeagent so extra bonus points if you can guide me through how to record it

Thank you

Your comments are contradictory... you say you get no payment but then you say you are paid for the cost of the meal. What is it? Is it just food or are you doing products and services too?

What other revenue streams do you have such that you are using FreeAgent?

Singlemummy_2

Sounds like a voluntary role where you do the role voluntarily but get reimbursed for out of pocket expenses - would not think this was something you need to put through accounts

Bookworm105

as Dull has identified, let's start with what entity do you have that needs FreeAgent and what is the relationship between the FreeAgent entity and your mystery shopping activity?

when you get the "meal money" how is it physically paid and in whose name is the payment made out to?
if by bank transfer, into whose bank is the deposit made?

guiding you through FreeAgent will be easy, but not until we know the above facts 

silvercar

Singlemummy_2 said:

Sounds like a voluntary role where you do the role voluntarily but get reimbursed for out of pocket expenses - would not think this was something you need to put through accounts

I would have thought having the free meal is the payment.

Albermarle

Could be that the OP is 'mystery shopping' restaurants/pubs/cafes and so the meal is a necessary part of the 'job' 

DullGreyGuy

Albermarle said:

Could be that the OP is 'mystery shopping' restaurants/pubs/cafes and so the meal is a necessary part of the 'job' 

But then they have to declare the BIK of the food

Singlemummy_2

silvercar said:

Singlemummy_2 said:

Sounds like a voluntary role where you do the role voluntarily but get reimbursed for out of pocket expenses - would not think this was something you need to put through accounts

I would have thought having the free meal is the payment.

Yes but as it’s a reimbursement of expenses can this be seen as a payment? I run an organisation and we have volunteers doing various roles, we reimburse our of pocket expenses incurred during their time volunteering - it’s not a payment for the time given, it’s an out of pocket expense, their time is not compensated financially 

silvercar

Singlemummy_2 said:

silvercar said:

Singlemummy_2 said:

Sounds like a voluntary role where you do the role voluntarily but get reimbursed for out of pocket expenses - would not think this was something you need to put through accounts

I would have thought having the free meal is the payment.

Yes but as it’s a reimbursement of expenses can this be seen as a payment? I run an organisation and we have volunteers doing various roles, we reimburse our of pocket expenses incurred during their time volunteering - it’s not a payment for the time given, it’s an out of pocket expense, their time is not compensated financially 

I agree, it can’t be seen as a payment for tax purposes. I was just explaining why people would do it. 

sheramber

Are you given the cost of the meal or is it a set amount, which may be more that the cost of the meal?

Bookworm105

silvercar said:

Singlemummy_2 said:

silvercar said:

Singlemummy_2 said:

Sounds like a voluntary role where you do the role voluntarily but get reimbursed for out of pocket expenses - would not think this was something you need to put through accounts

I would have thought having the free meal is the payment.

Yes but as it’s a reimbursement of expenses can this be seen as a payment? I run an organisation and we have volunteers doing various roles, we reimburse our of pocket expenses incurred during their time volunteering - it’s not a payment for the time given, it’s an out of pocket expense, their time is not compensated financially 

I agree, it can’t be seen as a payment for tax purposes. I was just explaining why people would do it. 

They have performed "work" in terms of the production of a judgement/report on their meal experience. They are therefore "trading" as a mystery shopper, therefore they have an income (payment for the meal) offset by the cost of the meal leaving them with zero profit. 

Technically it is not an out of pocket expense, the sole reason for the meal was to perform the duty of their employment as a reviewer of a meal. The fact they make no profit because they are only paid what they spent (or not paid a rate for time) is irrelevant, the only reason for the meal was to perform the work required to sell the review of it. The meal is therefore a cost of the sale

Whether that can be recorded in FreeAgent requires OP to return and answer the first set of questions regrading entity involved.

Although HMRC admin frequently give (partially) incorrect responses on their forum, in this case they are correct
Mystery Dining - what's taxable? - Community Forum - GOV.UK