Incorrect P87 Claim

loneranger54

My friend filled in a P87 form to claim relief on business mileage in April. The taxman has now asked him for his daily log of business journeys. He sent this in last week.
Being clever he entered a few "extras". He has been worrying all week. I have read that you can amend a claim for up to 12 months after you have made it. He intends to send in a new P87 and daily mileage log.
What is the reaction of the taxman likely to be? Will he just accept the new claim? Will he want to know why there is a difference? Could he get a fine?

Elaine_Wilson

I assume that your friend does not complete a self assessment form as he has filled in a P87.

Self assessment tax returns can be amended within twelve months of the filing date but I do not know if the same applies to claims outside the self assessment system.

I think the Inspector would definitely ask why the claim is being amended if this was not made clear when the amended figures are submitted. What does your friend intend to say?

I think the reaction of the Revenue will depend on what exactly you mean by "a few extras". The situation is that he has made a fraudulent claim and I suppose this means that the Revenue could prosecute. This is not likely to happen unless the amounts are considerable but they are likely to look very closely at the remainder of the claim made.

loneranger54

Thanks for the detailed responses. Will pass them on.
What constitutes an enquiry? The request for daily logs was to "check your calculations" and signed by a Revenue Officer. Is this different from a Compliance Officer.

ctm_2

As this is a P87 claim, it is completely outside of the Self Assessment system, so forget the talk of enquiries and penalties etc.

The request for mileage logs will be for one of a number of reasons, and is pretty routine request.

It is likely that his claim is for over a certain amount, is his first claim, seems unrealistic etc

It is a standard check to make sure HMRC are not dishing out money to everyone who asks for it. If your friends claim is fraudulent (which if it has made up figures in it to gain a larger refund) then he should send the mileage logs, and also a revised P87 with only the real figures on it saying he made mistakes on the original, so please ignore it and accept the new one.

Your friend won't be prosecuted or anything, or have any penalties etc to pay, but just needs to realise that if he continually proceeds with false claims he may end up in a situation where he could face penalties and prosecution.

This may serve as a useful lesson to him.

bootman

What is the best way to keep a log in case this ever gets asked for. I work from home but have to make trip to the post office and trips into the office to collect stuff. My contract says home worker and the tax office recognize this.

I just keep a note of each trip and why in a small note book. Is that okay?

ctm_2

bootman wrote: »

What is the best way to keep a log in case this ever gets asked for. I work from home but have to make trip to the post office and trips into the office to collect stuff. My contract says home worker and the tax office recognize this.

I just keep a note of each trip and why in a small note book. Is that okay?

If HMRC were to be extra picky they could ask for a log showing the following before agreeing your claim:

• The date of the journey
• The purpose of the journey
• The start point of the journey
• The end point of the journey
• The distance of the journey

So if you keep that information then you will be fine.