Purchases for 2011 tax year?

bundly

A question came up at the weekend: a shop in which I was spending a lot of money on "allowable expenses" had a 15% discount day. But I wanted to offset the purchases against NEXT year's tax.

I bought the items on a credit card so that I will technically be paying for them in a month's time, within the new tax year.

Will this "count" or will the tax office consider the date of purchase rather than the date of paying?

Similarly, I have other large purchases I'd lke to make today. One from a brick and mortar shop, the other on Ebay. (I am in a hurry for these things and would rather not wait till tomorrow.)

Is there any way I can order and pay for them today but put them into 2011-12 tax year?

Thanks!

Pennywise

It's date of invoice rather than date of payment that matters.

BUT, there are ways of dealing with this depending on the nature of your purchase.

If it's a stock item, you should carry forward the value of stock and write it off in the year of usage. So if you spent £100 on stationery today, it goes in your 10/11 books as a purchase, but you then deduct the closing stock of £100 which is then carried forward until used.

If it's a fixed asset, i.e. computer, then you should strictly claim capital allowances in year of purchase, not year of payment, but you can argue that capital allowances are due in the year the asset is brought into use, so as long as you don't "use" it until the new tax year, you should be able to do the same as stock, i.e. carry forward the cost until year it was first brought into use.

An alternative option is to draw up your accounts to 31 March, and then these purchases won't fall into that year. HMRC allow a period +/- 7 days from the "year" end to make up your accounts, so even if you've previously used 5 April, you can change to 31 March without them arguing/querying it.

bundly

Pennywise wrote: »

It's date of invoice rather than date of payment that matters.

An alternative option is to draw up your accounts to 31 March, and then these purchases won't fall into that year. HMRC allow a period +/- 7 days from the "year" end to make up your accounts, so even if you've previously used 5 April, you can change to 31 March without them arguing/querying it.

Thanks for an unexpectedly comprehensive reply. It's not stock, it's household expenses of which I am allowed to claim 3/4 as allowable expenses (I make my income from property) --- in this case, new security locks and carpets.

Your idea to "draw up your accounts to 31 March"is a novel one to me (I am SUCH a noobie at this!) but it WOULD work, because it would definitely allow me to include everything I bought at the weekend.

So, presumably, all I have to do is, when I do my 2010-2011 tax return online, in a few days' time (not at 10pm on 31 Jan like I did last year LOL) I can show on there that I ended my tax year on 31st March, correct? Then my new year begins 1st April? Presumably I don't have to inform anyone?

Pennywise

I assumed you were running a business. I don't think the same +/- 7 day is relevant to property income. Presumably you're filling in property pages of the tax return and not self employment pages? As far as I know, property income is a fixed year end of 5 April and can't be changed.

bundly

Oh OK.

So it's better I don't buy anything today then, as there seems no way of manipulating the invoice dates. Thanks!