Can I claim expenses that were undeclared from a previous tax year?

Shaolyen

Last year when I filed my tax return I didn't earn enough to be taxed - as a result I didn't bother claiming any of my expenses against tax.

Now I'm filing this year's return, and I've earned enough to pay tax - my question is, can I claim back those expenses from the previous year? Or is it too late to declare them?

Any help would be greatly appreciated.

whatatwit

Did you make a loss last year.
Income less expenses?
If not, then you had unused Personal allowance, which as far as I know, cannot be carried forward.

If your expenses were more than your income, then I think you need to contact the Tax Office to see if the loss can be carried forward.

Either way, best to check with HMRC as everyone's circumstances are different.

jennifernil

As far as I know each year stands alone unless you are running a business and make a loss.

Shaolyen

In year 1 I earned around £4,000, and had £2,000 worth of expenses that I didn't declare.

In year 2 I earned around £20,000, so I'm wondering if I can claim back that £2,000 from year 1 that I didn't declare.

WHA

Shaolyen wrote:

In year 1 I earned around £4,000, and had £2,000 worth of expenses that I didn't declare.

In year 2 I earned around £20,000, so I'm wondering if I can claim back that £2,000 from year 1 that I didn't declare.

Apparently No! Each year stands alone. Losses can be carried forward, but you didn't make a loss last year. You declared £4,000 with the result of no tax - you should have declared £4,000 less £2,200 equals £2,000 with the result of no tax. Therefore the answer to your question appears to be no.

BUT!!! Are you sure those expenses were really "expenses" in that year. The only expenses that can be claimed are those "used" in the year. So if some of the expenses related to things "used" in later years, you potentially can claim them. For example, if you spent £500 on business cards, letterheaded paper, and other stationery, but only used £100 of the stock last year, only £100 was last years expense. If you brought the remaining £400 of it into the later year and used £200 of it, then YES you do have an expense of £200. Likewise with stock bought for resale - your "expense" for stock for the later year would be the price of stock sold, regardless of when it was bought. The same applies for virtually all expenses - advertising is often paid in advance, i.e. Yellow Pages - spread the bill over the advertising year. Also, you should capitalise any equipment that lasts more than a year - instead of claiming its cost in the year of purchase, you claim capital allowances over several years.

Your only hope is to review your £2,000 of wasted expenses and try to find a way to spread some legitimately into the later year - of course, this also has the knock on effect of having to do the same for the expenses of the later year to be carried into the next year, and so on, but this is the "right" way to deal with expenses, so it may work out for you.

Cook_County

I also want to add that it depends on your accounting period. Your accounting period could be 2 years long if that helps...