Self assessment ?'s

Lewie

Hi all.
Not sure if this is the right place to ask but i can try.
I had an accountant to do my self assessment for the past eons of years but thought i would save myself a few hundred quid and do my own online.
I did last years (April 6th 07 - April 5th 08) as a test run, all was fine.
This year I have looked into it a bit further and find that some things were not claimed for, I have had a lock up for materials for the past 15 years and never claimed for the cost. I see I can claim for part of my AA membership as well. I know I can only go back 6 years but that will do me. Thing is I don't see a place to claim back dated expenses on the form. I can't just put the amount in as it will look decidedly dodgy adding about £3-4,000.00 without explanation.

Other thing, I bought a new van 30/3/07, after trade in the cost to me was £5000.00. This has never been claimed either. I believe this is capital allowances or something, had I have bought it in April 08 I belive I could have claimed the £5,000.00 in one go as the rules have changed. As I bought it before the rule change I think I can claim 20% each year, if so that would mean £1,000 06-07, £1,000 07-08, £1,000 08-09.
Is this right, if so where and what and how?
Sorry for the unproffesional explanation, i tried the helpline but they are inundated and i just want to get this out of my head.
Cheers.

PlutoinCapricorn

The online form covers one FY only. You will need a separate letter with full details to cover unclaimed expenses. What was your accountant doing all these years? Could he sort it out for you?

The rules about capital allowances and writing down do change. If you are owed a lot of overpaid tax HMRC might want to see all the evidence.

sarflee

You can request an amendment to the 2007-2008 tax return. Any earlier years can't be amended but you can make a claim for error or mistake relief. Both have the same outcome it's just you will need to make it clear that you are making a an error or mistake claim in your letter.

Lewie

o.k., thanks both.

p.c. I don't know what he was doing, it looks like he was just putting down amounts that looked right. I provided him with all receipts sorted and totted up, he just had to fill in the form.
I've even noticed, looking back through my books that he claimed for public liability insurance, never had any so i don't know where he got that figure from!!
Perhaps i ought to deduct that from my claim and explain it was a 'misunderstanding' with my accountant.
I never even thought about some of the things until i read the little pop ups that accompany the online form.
Small one man band and it was costing nearly £400 a time.
Oh well, lesson learnt, if you want a job doing right................

Elaine_Wilson

To deal with the van situation - this is a bit complicated.

First you need to establish if your accountant had been claiming capital allowances. As you are obviously aware the system is designed to spread the cost of the assets over a number of tax years. There may have been a balance of unclaimed expenditure brought forward from those years he dealt with. This will be the balance in the pool and could include other equipment as well as the van.

Next, the claims should be based on the full cost of the van, not the amount after the trade-in.

In 2006/07 you could claim a First Year Allowance of 50% of the cost. The balance would be added to the pool to be carried forward.

2007/08 the claim was 25% of the balance left in the pool.

2008/09 on you can claim 20% of the reducing balance.

Please note that these are the maximum figures that can be claimed. You may wish to reduce any of the claims if it is beneficial to do so.

Now to return to the trade-in. If capital allowances had been claimed on the van owned previously then there will be some sort of balance included in the pool figure brought forward from 2005/06. You should treat the trade-in as a sale of the old van and credit this amount against that brought forward figure. If the 'sale proceeds' were greater than the balance then a balancing charge will be generated.

Hope that's clear. If not, post some more details and figures (fictitious if you like) and someone here will set out the calculation.

Lewie

Hi Elaine.
Thanks for that.
Wow! They certainly liked to make it complicated, I take it that is why you can now just claim 100% under a certain amount in one go.
My accountant didn't claim anything for this van, I have the list of things he claimed for, such as motoring expenses, use of home as an office etc etc etc etc, but no capital allowances.
I see no mention of capital allowances on any of my past 6 years accounts, I take it it would be clear that it was capital allowances and not bundled with anything else?

Figures, full cost of van = £6200 inc VAT
Trade in = £1200

Forget any previous figures from the years before I don't want to go that far with this one, too much hassle.

As I bought it on the 30/3/07 then I take it that up to date I can claim up to 95% so far.

So if you have enough details, what sort of figures do I need to input and is this the same as the other backdated stuff I mentioned ie has to be accompanied by a letter of explanation?
It should be so easy online but it's all getting a bit foggy!!

Elaine_Wilson

Lewie wrote: »

Hi Elaine.
Wow! They certainly liked to make it complicated

Hey, don't knock it. It pays my bills.

I'm sorry but the 95% is not quite so straightforward.

Ignoring the earlier years, the van cost £6,200 on the 31st March 2007.

In 2006/07 you can claim a First Year Allowance of 50% = £3,100. Claiming this will leave £3,100 to carry forward to the next year.

In 2007/08 you can claim 25% of this balance, i.e. £775. This leaves a balance to carry forward of 3,100 - 775 = £2,325.

In 2008/09 the relevant rate is 20% so the claim is 20% of £2,325 = £465. You then carry forward £1,860 to 2009/10.

This is the "reducing balance system" so you can't just add the percentages.

As with the other things mentioned in your original post the claim for 2007/08 can be made by an amendment to the return and the earlier year by an error or mistake claim.

Elaine_Wilson

Just reread your last post. It is not common practice to put the capital allowances into the accounts. Sometimes a charge for depreciation is included but this is ignored for tax purposes.

The capital allowances are entered into a separate box on your tax return so your accountant may have claimed these even if nothing shows in the accounts. Do you have a copy of the tax return or some other schedules showing what was entered?

Lewie

Hi both.
I had a call back from the tax office (at last) and he looked at my return and told me my accountant had claimed capital allowances 06-07 to an amount of £2,814.00, must be some adjustment from my old van as I hadn't had that for three years. He told me that I can go back and adjust last years that I did on line and to enter £625.00 and this year enter £375.00.

Elaine, you are right, after looking at the figure carried over from my net profit to my tax computation I see that the difference is the £2,814.00.
I forgive my accountant for that, however, after trying to find the figure I discovered that he has totted up my expenses wrong and underclaimed some £721.00!!! I give up.

Jimmo, I will take a look any way and learn. As you can see it looks like even my accountant doesn't know how he works things out so it beats the hell out of me.

Anyways, that's the van sorted and I will adjust last years to account for my lock up and AA membership (business proportion) then I can decide if it's worth writing letters to sort out the previous three years. Phew!

Thanks alot so far, any further advice welcome. ( Such as what do they expect in any letters I MAY choose to send? ):D

PlutoinCapricorn

Lewie, I know that making the claims is a big pain, all the more in that you were paying someone else to take care of it. But it is best to claim as much in the way of refunds as possible, all the more in that you can only go back 6 years or so.

The money will make all the effort seem worthwhile.

Lewie

Hey Plutoin.
I thought adjusting 07-08 would be easy, i'm working on it now, I have put figures into the capital allowances area, I go forward and it tells me to print the page with the figures on it to carry forward to 08-09, no figures, just a list like this?

Main pool: £

Car costing £12,000 or less (with private use): £

Car costing more than £12,000 (with business or private use): £

Single asset pool: £

Balance of first year expenditure: £

I have entered;
Item category, Vehicles Other than cars
Then the cost
Yes I purchased it
No it's not used privately
No, it's not eligible for enhanced allowances
No, it's not eligible for first year allowances

Next Page;
Category, Main Pool
50% of original value

Next Page;
No figures just the list I put above?

As my accountant claimed £2,814.00 capital allowances in 06-07 I take it that he must have worked out, that with adjustments from my old van he was using a figure of £5628, it being £2,814 X 2.
If that is right then I am entitled to 25% of £2,814 (£703.50) for 07-08 and 20% of £2110.50 (£422.10) for 08-09??
Sorry it's a bit confusing