To work out the value of notional spending, and to assess whether something is notional spending, you must first work out the commercial rate or market value of the item, goods or service you received. The commercial rate or market value means the price that would reasonably be expected to be paid for the item, goods or service, if it were on sale in the open market.1
The guiding principle is that, in all cases, you should make an honest and reasonable assessment of the value of the items, goods or service you have received. You should keep a record of how you reached your valuation and keep copies of any quotes you receive.
If the supplier is a commercial provider, you should use the rates they charge other customers. Alternatively, if the exact or similar options of the item or service is available on the market, you should use the rates charged by other providers to guide you in making a valuation.
If there are no exact or similar options of the goods or service available on the market, you should base your assessment on the market rates of a reasonable equivalent.
What needs to be reported as notional spending?
The value of notional spending will be the difference between the commercial rate or market value of what you have received and the amount (if any) you pay for it.
For example, where an item is given to you free of charge, the value of notional spending is the market value of the item. If services are provided for your use at a non-commercial discount (of more than 10%), the notional spending will be the difference between the commercial rate of the service and the price you paid.
It is good practice to include any evidence you have of the value of notional spending when you submit your return.