Questionable expense claims and the top excuses for late tax returns

Each year, HM Revenue & Customs publish the top excuses received by taxpayers for failing to submit their returns on time.

In addition to the late submission excuses, this year, HMRC have also revealed some of the most ‘questionable’ expense claims included within accounts & tax returns, which were also rejected.

These ‘expenses’ included the following:

  • 1. A three-piece suite for my partner to sit on when I’m doing my accounts.
  • 2. Birthday drinks at a Glasgow nightclub.
  • 3. Vet fees for a rabbit.
  • 4. Hotel room service – for candles and prosecco.
  • 5. £4.50 for sausage and chips meal expenses for 250 days.

Angela MacDonald, HMRC’s director general of customer services stated that “it is unfair to make honest taxpayers pick up the bill for other people’s spurious claims, so HMRC will only accept sincere claims such as legitimate expenses for a job”.

It is important to point out that for businesses; tax relief is only available on expenses incurred wholly & exclusively for the purposes of the trade, profession or vocation. Any non-trade purpose would make the expenditure not allowable.

As most (but sadly not all) taxpayers are aware, the deadline to submit an electronic self-assessment tax return and paying any associated tax liability is 31 January 2018.

Failure to submit by the deadline will result in an initial £100 late filing penalty, which can increase depending on the severity of the lateness.

Per HMRC, this year’s top unsuccessful excuses include:

  • 1. I couldn’t file my return on time as my wife has been seeing aliens and won’t let me enter the house.
  • 2. I’ve been far too busy touring the country with my one-man play.
  • 3. My ex-wife left my tax return upstairs, but I suffer from vertigo and can’t go upstairs to retrieve it.
  • 4. My business doesn’t really do anything.
  • 5. I spilt coffee on it.

A penalty may be able to be avoided if a taxpayer can provide HMRC with a genuine reasonable excuse for missing the deadline. It is recommended that taxpayers in this situation contact HMRC as soon as possible.

For more details on late filing & payment penalties, please see one of our earlier blogs, completed by Craig Harman: self-assessment-tax-return-deadline

If any assistance is required with compliance matters such as late returns, penalties or any general dealings with HM Revenue & Customs, please contact you nearest Perrys office.

Article written by Gareth Bridgland