VAT, overheads, and staff costs

VAT

Spending must be reported inclusive of VAT where applicable, even where VAT can be recovered.

Overheads

Overheads that are directly attributable to regulated campaign activity must be reported. The amount that must be included in the spending return is the proportion that reasonably reflects usage during the campaign.

Where there is no increase in spending on overheads beyond the normal spending incurred by a campaigner, spending on overheads will not be regulated.
Where there is an increase in the cost of overheads incurred by a campaigner as a result of regulated campaign activity, that increase in spending must be reported.

The proportion that reasonably reflects usage is generally the cost that is incurred over and above the usual costs in a given period. Where an apportionment of overheads is necessary, an aggregated figure for each overhead is sufficient to meet the reporting obligations.

Overheads can include items such as:

  • office space
  • electricity bills
  • the provision of phone lines and internet access
  • mobile phones
  • the provision of office equipment of any kind

The Commission considers that the cost of water, gas and council tax are not costs that need to be reported as they are not sufficiently closely connected to the regulated activity.

Example

During the regulated period a campaigner purchases additional computers, office equipment and phones to support their team with producing campaign material and canvassing. With these purchases, the campaigner’s electricity and internet bills increase beyond their normal spending.

As the spending on overheads has increased beyond the normal spending of the campaigner as a result of regulated campaign activities, these overheads costs will be regulated.
 

Staff costs

Staff costs that are directly attributable to regulated activity must be reported. Only staff costs that are incurred as a result of regulated campaign activity need to be reported.

Where staff costs can only be partially attributed to regulated activity, the costs must be apportioned and only the portion attributed to regulated activity must be included in the spending return.

Where an apportionment of a staff member’s time is necessary, an aggregated figure for all staff time attributed to regulated activity is sufficient to meet the reporting obligations.

The Commission considers that the childcare costs of staff members are not expenses that need to be reported as they are not sufficiently closely connected to the regulated activity.1

If you have a member of staff working on regulated campaign activity as well as on unregulated activities, you will need to count a proportion of the staff salary which reflects the time spent working on regulated campaign activities.

Example

A staff member is working on your organisation’s election campaign at the same time as your day-to-day business.

If your organisation already has an established way of apportioning these costs for other work, you may decide to calculate staff costs incurred in relation to regulated campaign activities in the same way. 

In all cases, you should make an honest and reasonable assessment of the proportion of staff costs that can be fairly attributed to your regulated campaign spending. 

To help you plan your spending, you and the staff member should agree a reasonable estimate of the time they are likely to spend on regulated campaign activities. You should ask the staff member to keep track of the time actually spent on regulated campaign activity and update you if they spend a significantly longer time than originally agreed. This should help you ensure that you do not breach the spending limit. 
 

Last updated: 21 March 2024