HMRC publishes most optimistic self assessment expense claims
As the Self Assessment countdown begins, HMRC has released its latest list of the most outlandish items which have been claimed as expenses.
Glamorous holidays abroad, luxury watches and Friday nights out were amongst some of the most frivolous expenses that some taxpayers tried to claim on their Self Assessment tax returns last year. With a week to go until the 31st January deadline, HMRC has released the strangest expenses to make sure other taxpayers don’t attempt to try and make similar claims:
- Holiday flights to the Caribbean
- Luxury watches as Christmas gifts for staff from a company with no employees
- International flights for dental treatment ahead of business meetings
- Pet food for a Shih Tzu ‘guard dog’
- Armani jeans as protective clothing for a painter and decorator
- Costs of regular Friday night ‘bonding sessions’, running into thousands of pounds
- Underwear, for personal use
- A garden shed for private use plus the costs of the space it takes up in the garden
- Betting slips
- Caravan rental for the Easter weekend
Needless to say, all of the above were rejected.
Ruth Owen, HMRC Director General of Customer Services said:
“Year after year we receive a number of ludicrous expense claims, ranging from international holiday flights to expensive designer clothing, which we would never uphold. Why should the honest taxpayer pick up the bill for others? HMRC will only accept those claims which are genuine, such as legitimate travel expenses or the cost of tools for the job.”
I am a 68yr old who after working since I left school at 15 years of age with little to show for it; decided to further my education ending with a BEng in energy engineering 5yrs ago.
Now as a Professional Engineer I’m earning over £100,000 PA paying over £40,000 PAYE + a mortgage, and now to add insult to injury I’m taxed on my OAP. My take on it all is that you are a sad lot who keep going after the soft targets instead of going for those who are proving to be a lot smarter than you. The fact is I have come to the mind set of wishing them all the very best in their endeavours to out do you
not quite sure what the point you are making is here. That said, if you were below 65 & paying yourself through your limited company you would be paying another £20,000+ in employer & employee National Insurance. £40,000 is a bargain!
Re dodgy expenses claims
When I was in practice as an accountant I saw this all the time and had to explain to my clients why it was not appropriate. With my clients agreement the claims were removed before submission.
HMRC thinks that taxpayers submitting returns 4 times a year without professional adviser input will reduce errors under Making Tax Digital.
They must be living in La La Land.
who is responsible to identify such claims? is it your accountant or you yourself?
As small limited company and self employed, sometime you leave claiming international trip to meet someone for business expansion which cant be justified other than trip tickets. How can you decide on such claims?
There are too many rules to follow when they are not very clear to small businesses or self employed people.
What Ruth seems to be saying is that HMRC are doing their job properly, and should be credited for doing so. We are already getting hammered by IR35 which should indicate to some that HMRC, and the rest of us for that matter are getting fed up with outrageous claims. This affects us all. Be professional, be honest, be genuine.
I am not suggesting that there is a possibility that one or more of these claims were genuine but at least to challenge the claims seem, at the outset to be absolutely correct.
As for the pension, if you are earning that much then you should be able to afford the tax on the pension. If you don’t like it, retire and leave the work to us that are prepared to pay the tax.
There are valid comments Throughout this thread. The claims should always be legitimate, and the pursuit by HMRC of tax evaders is absolutely correct. However contractors also suffer from being tarred by the evading few, and an overly aggressive tax policy that at the very least results in an unfavourable view of contracting and at very worst, damages delivery of services where Contractor assistance is heavily relied upon. Slapping IR35 regulation on contractors may work in the short term, but the long term effects will more than likely be detrimental. Rather than sticking to what it feels it knows, HMRC has to consider a completely new approach to taxation for the modern world.