Did I file my tax return correctly

Accou3

Hi,
To work out tax due in 18-19 tax year, I went through all my bank statements and highlighted incoming and outgoings for my business I took the outgoings, which was everything I spent including allowable expenses, from income. This gave amount liable for tax.

So...if HMRC want to check this, I should have nothing to worry about right? I can show them the annotated bank statements used to work out tax due, right down to the penny

Did I do it right?

comeandgo

You need proof your expenses were business expense, you should have purchase invoices.

00ec25

Accou3 wrote: »

Hi,
To work out tax due in 18-19 tax year, I went through all my bank statements and highlighted incoming and outgoings for my business I took the outgoings, which was [STRIKE]everything[/STRIKE] what I spent on [STRIKE]including[/STRIKE] allowable expenses only, from income. This gave amount liable for tax.

So...if HMRC want to check this, I should have nothing to worry about right? I can show them the annotated bank statements used to work out tax due, right down to the penny

Did I do it right?

i hope you mean as above

so you calculated using the cash basis, which is indeed how you can do it if you are below the threshold that allows you to do so

given the relatively timid nature of your question, how confident are you that you actually know what is an allowable expense?

01afraser4

As others have said, you can only deduct allowable business expenses from your income to arrive at your taxable profit.

Should HMRC make an enquiry into your tax return, bank statements alone prove very little. There is no way to tell from a bank statement if the expenditure is allowable/prohibited or if there is any personal use element included.

You should start compiling receipts, invoices, mileage logs, payroll records (if you employ anyone) and any other supporting evidence now if you haven't already done so. You are legally required to retain evidence of all business expenditure.

If HMRC question your expenditure and bank statements are the only evidence you can provide and they believe your expenses appear excessive then it's likely they will propose an adjustment.