Can I Amend My Figures?

Yes! In an investigation most of the cards are stacked against you, but here is one that falls in your favour.

HMRC have 12 months from the date of your tax return to launch an investigation. You have the same period to amend your return.

This means that after an investigation is launched you can go through your figures with an expert and they can give you pointers. You then say to HMRC: “I wish to amend my return from X to Y because of A, B and C.”

HMRC say, if you make a mistake on your tax return you’ve normally got 12 months from 31 January after the end of the tax year to correct it. This is called an ‘amendment’. For example, for the 2016-17 return you have until 31 January 2019 to make an amendment..

The best-case scenario is that you will talk to an expert who will say things along the lines of: “Did you ever work from home? In that case you can claim a percentage of your gas, electricity, water, council tax… etc.” Or “Did you ever use your car for work?” If so, it’s the same deal or “Did your partner ever work for you as an advisor or clerical assistant and get paid a wage? – Well in that case, bingo…”

HMRC may well say you can only claim for expenses used, “wholly and exclusively” for business use but this is misleading.

If you buy and use something “wholly and exclusively” for work you can claim 100 percent of it as a deduction, but if an item or service has been used partially for work it’s normal for you to claim a percentage of that item.

Here’s the HMRC wording, “…some dual purpose expenses include an obvious part which is for the purposes of the business. We usually allow the deduction of a proportion of expenses like that.”

Details on apportioning expenditure here: https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim47815