Self employment tax return - The Book-keepers Forum (UK)

dnlpntl · Member

Self employment tax return

Cheshire · Master Book-keeper

What is it you do?

Food?!

Cheshire · Master Book-keeper

dnlpntl wrote:
Hi, I am a self employed individual and I am planning on completing my self assessment return soon. Regarding the expenses- Ive heard that there are some limits to which HMRC will never take you for extra security checks by asking you to provide all the receipts proving the occurred expenses. Is that right? If yes, how can I get more info on that? As an example I mean- for the X turnover, you can show Y expenses on your form and HMRC wont ask you to bring proves. Or for the food section, you can show max X amount of expenses. Thanks.

If you cant even answer that how can you expect to get the right advice?

What are you planning to do -fudge the figures to meet the compliance rules, as that is what it sounds like.

You need to keep receipts for all your LEGALLY QUALIFYING expenditure, even if they dont get picked up in the first compliance check, they will down the line and its a £3000 fine for not keeping proper records (never mind the rest for errors).

How are you going to adjust your accounts to allow for the accruals basis? What about basis periods?

Get someone who knows what they are doing to complete this, otherwise you will end up with a VERY expensive mistake, now or at some point in the future.

Artois · Guru

dnlpntl wrote:
you can show Y expenses on your form and HMRC wont ask you to bring proves. Or for the food section, you can show max X amount of expenses. Thanks.

What food section?

The way I see it is if you don't claim any expenses then HMRC wont ask for any receipts! However they might still look at the turnover

dnlpntl · Member

Cheshire- Ive posted a question on this forum to get an answer for it and not be taught how morally I should behave in the society. My accountant told me: Look, I can guarantee you the X amount to be paid to you with Y expenses amount. If you want to be paid more with more expenses, then the risk is on you. How did my accountant figure out that secure expenses amount?

Cheshire · Master Book-keeper

This is a forum for bookkeepers and accountants Daniel.

You have an accountant. Ask him. Trust him? Or better still find a better one.

If you do not behave morally in dealing with your tax affairs your advisor has a duty to report you.

-- Edited by Cheshire on Wednesday 5th of September 2018 05:27:23 PM

Shamus · Forum Moderator & Expert

dnlpntl wrote:
Cheshire- Ive posted a question on this forum to get an answer for it and not be taught how morally I should behave in the society. My accountant told me: Look, I can guarantee you the X amount to be paid to you with Y expenses amount. If you want to be paid more with more expenses, then the risk is on you. How did my accountant figure out that secure expenses amount?

Thats not the advice that I would give a client.

Is your accountant qualified? Not everyone that calls themselves an accountant actually is in the same way that not everyone that wears a white lab coat is a doctor. If they are qualified then as indicated by Joanne, why are thy not doing your tax return?

At some stage you will get a visit from HMRC, and they will expect you to justify your expenditure with evidence. Trust me, whatever tax saving that you think that you are going to make will be a spit in the ocean compared to the interest, penalties and surcharges that they can wield if they think that you have been attempting a defraud the system. (Yes, underpayment of tax is fraud).

A good accountant will ensure that you pay only the right amount of tax and avoid interest, penalties and surcharges.

Leger · Master Book-keeper

dnlpntl wrote:
Cheshire- Ive posted a question on this forum to get an answer for it and not be taught how morally I should behave in the society. My accountant told me: Look, I can guarantee you the X amount to be paid to you with Y expenses amount. If you want to be paid more with more expenses, then the risk is on you. How did my accountant figure out that secure expenses amount?

Hi Daniel

Can you be more explicit about the figure arrived at by the accountant? Did you give them all your receipts and income details and they said ok this is what the situation, and this is what HMRC expect, or has he given you a figure without receipts and said HMRC won't question that?

Whilst HMRC do have a band where figures are accepted at face value accountants can only guess what those bands are, based on years of submission and experience. Any accountant worth their salt will check that the figures presented by the self employed person are correct and be ready to defend them should HMRC query it, or if they are outside what they believe to be the HMRC bands, and expect it to likely raise a query with HMRC. Some accountants do produce industry acceptable figures (happened to a mate of mine and I suggested he change accountants pronto) but if investigated HMRC will want the figures to be proved with back up paperwork.

As Shaun has pointed out, HMRC can pick up on any tax return at random (and they do) and investigate it. If it's legit absolutely fine, if it's not then the taxpayer gets penalties and they may dig deeper into other years.

And I know you don't want to be moralised but if you come on to a forum for advice (even if that's advice that didn't go down well) then calling us a bunch of weirdo's is not the best way to get further help. It doesn't bother me because I've been a weirdo for years!!

Leger · Master Book-keeper

Cheshire wrote:
What is it you do?

Food?!

Hi Joanne and Doug as he asked a similar question.

The other thread says he's involved with construction, so I'm guessing this is related to subsistence for meals and overnight accommodation.

-- Edited by Leger on Thursday 6th of September 2018 05:12:27 PM

dnlpntl · Member

Hi Leger, Your answer was exactly what I was looking for. Hence, thanks a million for that. The word weirdo was addressed to those who simply wasted their times posting irrelavnt criticising stuff on my post. Going back to the question- So youre saying there are no specific thresholds indicated by HMRC for expenses? I understand that some accountants guarantee that HMRC wont question the amount claimed based solely on assumptions and not official rules given by HMRC? That comes with their years of experience as you said? Also- Im a windows fixer in the consruction industry. Thanks.

Cheshire · Master Book-keeper

dnlpntl wrote:
Hi Leger, Your answer was exactly what I was looking for. Hence, thanks a million for that. The word weirdo was addressed to those who simply wasted their times posting irrelavnt criticising stuff on my post. Going back to the question- So youre saying there are no specific thresholds indicated by HMRC for expenses? I understand that some accountants guarantee that HMRC wont question the amount claimed based solely on assumptions and not official rules given by HMRC? That comes with their years of experience as you said? Also- Im a windows fixer in the consruction industry. Thanks.

So you expect by stamping your feet like a 4 year old and being a bully and absuive to members of this forum that you will get more answers than you have had already? Your Q has been answered. Get a new Accountant. Right from the start. No Accountant can provide such guarantees so if your is then ask him how.

You clearly are not reading the answers given. You are now misquoting John. You say at 18.09 ''So youre saying there are no specific thresholds indicated by HMRC for expenses?'' That is NOT what John wrote. Read it again. Properly.

But still the burning question is - why in hell does it matter what the internal limits are at HMRC? Your accounts are your accounts. Your income is your income and the expenses are just that - expenses. unless of course there is stuff in there that you shouldnt be claiming but that is a different issue.

You still are NOT giving enough information for anyone to answer the question about food.

Yes John.... what you mentioned in your separate posting - at a guess some of it, possibly, may be subsistence but we have no clue because we are not being told anything - he hasnt even actually answered your question in the million thanks you were given.

But OP - Your posts are a joke.

Do you fix windows for free? Why in hell should anyone on here given their time for free? Especially when you have come on to a site which is not for business owners, but then worse still, then abused the forum users by name calling - which is so very childish.

HMRC pick on certain trades as well btw.

Edited to correct typo

-- Edited by Cheshire on Thursday 6th of September 2018 07:09:57 PM

Leger · Master Book-keeper

dnlpntl wrote:
Hi Leger, Your answer was exactly what I was looking for. Hence, thanks a million for that. The word weirdo was addressed to those who simply wasted their times posting irrelavnt criticising stuff on my post.
You can call me John. The "weirdos" you refer to give up their time voluntarily, to help others in the accountancy field. Joanne and Shaun's advice (Cheshire and Shamus) was spot on and as I indicated in my earlier post, if your accountant is suggesting that xx - yy will be acceptable to HMRC without actually doing the accounts and producing accurate figures, then change them bloody pronto.. I know you feel affronted because that's not what you asked, but it's the best advice you can get, believe me.
Going back to the question- So youre saying there are no specific thresholds indicated by HMRC for expenses?
HMRC will have a band range that won't be picked up on their radar when first submitted. If it looks out of place when submitted it will flag up. But HMRC can and do pick out returns at random and you can also be investigated as a result of someone else submitting false tax returns. One of my clients had exactly that a few years ago. One of his purchase invoices was from a company that was then investigated and he was investigated too.
I understand that some accountants guarantee that HMRC wont question the amount claimed based solely on assumptions and not official rules given by HMRC? That comes with their years of experience as you said? Also- Im a windows fixer in the consruction industry. Thanks.
HMRC will know what percentage expenses There are industry bands, but nobody except HMRC know what they are. Accountants can have an educated guess, but if an accountant is producing tax returns based on "industry standards" then they aren't doing their job properly imvho. I repeat, you can be still investigated even if your accounts are accurate and slap bang in the middle of the industry band. That's the point I was trying to make. Also the construction industry is one that HMRC are keen to police.

I'm going to highlight something Joanne said in her last post "But still the burning question is - why in hell does it matter what the internal limits are at HMRC? Your accounts are your accounts. Your income is your income and the expenses are just that - expenses. unless of course there is stuff in there that you shouldnt be claiming but that is a different issue."

That is it in a nutshell.

Shamus · Forum Moderator & Expert

Cheshire wrote:
HMRC pick on certain trades as well btw.

Hi Joanne, John,

sorry, answering both of you in one post. To my understanding the hot list is currently :

- Construction industry

- Restaurants

- London Solicitors

- Private tutors

- and of course the old favorite, Ebay / Amazon sellers.

Oh, and as always any company that has the name Pheonix in it.

Any business may of course still get a visit / investigation but the above are the one's that are the ones likely to be told to bend over and hear the slap of latex on the inspectors shoulder.

Cheshire · Master Book-keeper

Hi Shaun and John
Plus they look at those dealing with certain professionals (anti avoidance)

Also info feeds from 3rd parties - other government agencies, banks, credit card providers and the rest.

The list goes on and on and on!!!!!!!!!

But - still...what exactly is the point that is trying to be achieved here?

Artois · Guru

Just to add about HMRC treating the construction industry as high risk

I have had 3 clients come over to me in the past 2 years because they have had enquiries into their returns, I also had an enquiry opened into a client of mine last year and the first thing that was asked for was to provide receipts for all of the Cost of Sales and Expenses, everything that had been claimed for could be proved and the enquiry was closed with no additional tax found to be owed.

The point being that all the expenses claimed were legitimate and evidence could be provided to substantiate the claims

All of these worked within the Construction Industry.

Shamus · Forum Moderator & Expert

dnlpntl wrote:
The word weirdo was addressed to those who simply wasted their times posting irrelavnt criticising stuff on my post.

What is relevant is a matter of perspective.

You were helped more than you realise but that you have decided not to take the offered advice is no longer the concern of those who gave it.

When we answer questions here we do not answer the poster but rather answer all those who may in future read a thread so tend to also include the answers to the questions that they should have asked, not necessarily the one that they did.

In this instance the question showed a dangerous lack of understanding seemingly more akin to advice from someone down the pub than that which would come from a professional accountant. We attempted to protect you from yourself but such simpathetic acts of kindness were instead met only with contempt.

One day, given your questions, you will REALLY need help from the people here, and those that you have attempted (quite poorly) to insult will not be available to you to give it.

Your time on the site is coming to a close. Use what little you have left wisely.

Shamus · Forum Moderator & Expert

Cheshire wrote:

But - still...what exactly is the point that is trying to be achieved here?

Lol. There is no point to this thread... But when did that stop us wink

Actually, it's now just a few mates having a chat, and identifying the industries that are just not worth our time getting involved with.

Cheshire · Master Book-keeper

Shamus wrote:
Cheshire wrote:

But - still...what exactly is the point that is trying to be achieved here?
Lol. There is no point to this thread... But when did that stop us
Actually, it's now just a few mates having a chat, and identifying the industries that are just not worth our time getting involved with.

I meant to the question. There is no point to the Q. Despite what the OP states, it has all the usual hallmarks of ML.

Shamus · Forum Moderator & Expert

Cheshire wrote:
Shamus wrote:
Cheshire wrote:

But - still...what exactly is the point that is trying to be achieved here?
Lol. There is no point to this thread... But when did that stop us
Actually, it's now just a few mates having a chat, and identifying the industries that are just not worth our time getting involved with.

I meant to the question. There is no point to the Q. Despite what the OP states, it has all the usual hallmarks of ML.

Quite, wonder if the poster realises that tax evasion is covered under anti terrorism legislation!

Leger · Master Book-keeper

Shamus wrote:
Cheshire wrote:
HMRC pick on certain trades as well btw.
Hi Joanne, John,
sorry, answering both of you in one post. To my understanding the hot list is currently :
- Construction industry
- Restaurants
- London Solicitors
- Private tutors
- and of course the old favorite, Ebay / Amazon sellers.
Oh, and as always any company that has the name Pheonix in it.

Hi Guys

I love that last line Shaun.

Perhaps the biggest clampdown in recent times is that of the taxi trade. Being mostly cash, it was very easy to fiddle the tax man. However in recent years, with the advantage of computers and technology, HMRC are much more likely to spot fiddles. I've been fortunate that both of my taxi drivers (one just finished) have been honest as far as I can see, and as an ex taxi driver throughout the 90's, I know what I'm looking for!

Speaking of industry bands, I have a reasonable idea of what I think they should be in the trades I know, and I use that to ensure that *I* am happy with the books once completed. If it looks out of place, then I will have a friendly word for an explanation as to why. I have one at the moment where there has been various sums of money paid in to the bank, but no invoices to match. Shall we just say that the explanation was implausible to say the least, and we will be having a rather difficult conversation when I meet him next.

Joanne, I think the thread has been useful to highlight the topic Daniel raised, not just for him but for future readers too. It's mainly why I responded to his post

Cheshire · Master Book-keeper

Leger wrote:
Joanne, I think the thread has been useful to highlight the topic Daniel raised, not just for him but for future readers too. It's mainly why I responded to his post

Fair enough up to a point I suppose John.

Thing I objected to (always have) was the fact that (1) he is a freeloader and (2) he was verbally abusive (albeit in a milder sense than other posters) and (3) he wants to know how to wash the dosh! We corrected him, surely that is enough. I would hope that bookkeepers would realise the stupidty of his Q, although apparently his professional advisor didnt. But then we only have his word for that anyway.

Probably I should just add 'Pass' to the future business ones or some such evileye wink

-- Edited by Cheshire on Monday 10th of September 2018 12:34:45 PM

Leger · Master Book-keeper

Cheshire wrote:
Probably I should just add 'Pass' to the future business ones or some such

Oh no don't. It's good to see them get the Cheshire treatment biggrin biggrin

Isabella · Newbie

Is your accountant qualified? Not everyone that calls themselves an accountant actually is in the same way that not everyone that wears a white lab coat is a doctor. If they are qualified then as indicated by Joanne, why are they not doing your tax return?

Shamus · Forum Moderator & Expert

Isabella wrote:
Is your accountant qualified? Not everyone that calls themselves an accountant actually is in the same way that not everyone that wears a white lab coat is a doctor. If they are qualified then as indicated by Joanne, why are they not doing your tax return?

And now you are quoting me.... In the same thread!

dnlpntl · Member

Cheshire, I see youre trying to impress your virtual colleagues here, however I would like to invite you for a phone/face to face discussion and I want you to use the same words youve used here. Direct message me please. I dont know how to do that on your platform. Thanks

Casu · Senior Member

Get real!

Why?

What exactly are you trying to achieve?

Answer the question

"But still the burning question is - why in hell does it matter what the internal limits are at HMRC? Your accounts are your accounts. Your income is your income and the expenses are just that - expenses. unless of course there is stuff in there that you shouldnt be claiming but that is a different issue."

Leger · Master Book-keeper

Shamus wrote:
Isabella wrote:
Is your accountant qualified? Not everyone that calls themselves an accountant actually is in the same way that not everyone that wears a white lab coat is a doctor. If they are qualified then as indicated by Joanne, why are they not doing your tax return?
And now you are quoting me.... In the same thread!

He he, fame at last Shaun. Yes you could see the spam gun being loaded lol.

Shamus · Forum Moderator & Expert

Leger wrote:
Shamus wrote:
Isabella wrote:
Is your accountant qualified? Not everyone that calls themselves an accountant actually is in the same way that not everyone that wears a white lab coat is a doctor. If they are qualified then as indicated by Joanne, why are they not doing your tax return?
And now you are quoting me.... In the same thread!
He he, fame at last Shaun. Yes you could see the spam gun being loaded lol.

It appears that my similes are even the talk of the Punjab John. biggrin

Fun aside though, I think that it's time I took care of the above situation which is now getting out of hand.

Shamus · Forum Moderator & Expert

dnlpntl wrote:
Cheshire, I see youre trying to impress your virtual colleagues here, however I would like to invite you for a phone/face to face discussion and I want you to use the same words youve used here. Direct message me please. I dont know how to do that on your platform. Thanks

Joanne does not have to try to impress us. She is a top professional in her field who commands the respect of all those who listen to what she has to say. Her awards did not happen by accident, they were not given away but are the result of the votes of her peers who are very thankful for the help that she gives people on this site.

She also has no issue handling small, and not so small business owners... Although, I would imagine that yours would not generally appear on her radar as she deals only with a select clientelle that pass her stringent acceptance, viability and management integrity tests.

I tried to give you every opportunity to redeem yourself after your earlier posts, but calling Joanne out as though this is a playground is not considered acceptable behaviour and demonstrates poor professional ettiquette. Your latest post has shown that you are not the sort of person who should be on this site and for that reason I am as of now revoking your right to post here.

Shaun.

Shamus · Forum Moderator & Expert

In banning you I've just seen where you are. You can still read the site even though you can no longer post so I know that this is not wasted. When you join another site to ask your questions you might want to tell them that you are not actually in the UK but rather you would come under Southern Irish tax legislation.

Leger · Master Book-keeper

Shamus wrote:
In banning you I've just seen where you are. You can still read the site even though you can no longer post so I know that this is not wasted. When you join another site to ask your questions you might want to tell them that you are not actually in the UK but rather you would come under Southern Irish tax legislation.

Eire we go again!! (sorry Shaun couldn't resist)

Yep good call, Joanne did absolutely nothing wrong.

Artois · Guru

Leger wrote:

Eire we go again!! (sorry Shaun couldn't resist)
Yep good call, Joanne did absolutely nothing wrong.

Good one John

Totally agree, all Joanne did was to try and show the OP that the information/advice he had received was misguided to say the least.

Cheshire · Master Book-keeper

Thanks boys. No idea what that was all about. You know me - say it as I see it, verbally as well as in black and white.