Tax Return

jamesblue

I was helping a customer updating their account spreadsheet sums, which had an issue with the sums.


Anyway she showed me her Tax Return her accountant (ex HMRC employee) did for her, and she did not even realise that the accountant put down over £2000.00 as expenses like gas/electric/rates £1980, advertising £170.00, entertaining customers (I presume drinks) £71.00


She is like me, her office is at home, but rarely works at home, never entertained any customers, or paid for advertising.


So is there some golden rule that just say put an percentage down of your Profits, without an proof or receipts and it will not matter, you will not get picked up on it?????


As I said her accountant is an ex Tax HMRC employee, so I presume anyone can write of a percentage for stuff like this? When I did my Tax office course, done my the Tax office, they told me I must have receipts for everything.






Thank you

Pennywise

jamesblue wrote: »

So is there some golden rule that just say put an percentage down of your Profits, without an proof or receipts and it will not matter

There are some very specific allowances you can claim without receipts such as £4 per week for working from home and 45p per mile for business car journeys, but other than that, you may be requied to justify claims by producing invoices or other proof of expenditure and justifying the business allowability.

Just making things up that can't be substantiated isn't allowable and your friend could end up with a heft tax bill and fine. Time for them to get a proper accountant to do their tax return.

antrobus

jamesblue wrote: »

...So is there some golden rule that just say put an percentage down of your Profits, without an proof or receipts and it will not matter, you will not get picked up on it?????

No.

jamesblue wrote: »

....As I said her accountant is an ex Tax HMRC employee, so I presume anyone can write of a percentage for stuff like this? When I did my Tax office course, done my the Tax office, they told me I must have receipts for everything.....

It's Self Assessment, so you can indeed put down any old sh*t that you like on your tax return. The problem arises when HMRC start asking questions about where the numbers come from, and you can't provide them with a sensible answer.

Pennywise wrote: »

...Just making things up that can't be substantiated isn't allowable and your friend could end up with a heft tax bill and fine. ...

And the "ex HMRC employee" concerned may well end up doing time for cheating the public revenue.

I'd be inclined to;

1. get a proper accountant
2. fess up to the 'errors' in previous returns
3. shop the bar steward concerned

Slinky

Some people shouldn't be allowed outside on their own. I wonder what the reason is they are an 'Ex' HMRC employee.

jamesblue

Thanks for the advice, I did think it was really dodgy, which is what I said to the customer.


I went on the Tax Office course and they told me to keep a receipt of everything and a record of mileage for the 45p per mile. I am glad I have stuck to what they have said.


The ex HMRC employee that is doing the accounts for the customer only charges £100 for doing the Tax Return. I think £100.00 too much if her customers do not even know why she is putting stuff down that never was purchased, therefore no proof/receipts.




Thanks