Do I need to file a tax return?

I claim over £2,500 as travel expenses in my tax code. Do I also need to file a tax return?

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I've had conflicting advice.

I have claimed £3,000 of travel expenses in my tax code for 17/18. As this is over £2,500 do I need to file a tax return to confirm that this is correct.

I have already calculated that my actual expenses were just over, but don't want the hassle of submitting a tax return for a miniscule amount if I don't need to.

One accountant has told me I need to as I have claimed more than £2,500 in my tax code as an expense, the other has told me I only need to file a return if I make a claim for over £2,500, as it's already in my tax code I don't need to.

Replies (8)

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Lone Wolf
By Lone_Wolf
16th Oct 2018 17:10

You only need to file a tax return if:

1) you've been issued wit a notice to file (which I assume you haven't), or

2) you have a tax liability to pay.

If your tax code already gives you credit for £3,000 of expenses, then assuming that is being applied correctly, you will be getting the tax relief and don't need to do anything further.

Just watch out for any P800 (end of year tax calculation) to ensure that the £3,000 expenses are included in this as well so that the relief isn't effectively removed. If that happens, then it is likely that you'll have to do a tax return to claim the expenses, but I'd still try a phone call to HMRC to resolve in the first instance.

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Replying to Lone_Wolf:
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By Alex999
16th Oct 2018 17:26

I've have been issued with a tax return as in the previous year 16/17 this is how I claimed my expenses.

HMRC then altered my tax code to include these expenses but still issued me with a tax return to complete. Presumably I was on their list and didn't tell them I no longer needed to complete a return as the expense is now in my tax code.

I was planning on calling them and telling them I no longer need to file a return, but worried it might come back and bite me in the future if they turn round and say "yes you did as we issued one to you and you were claiming expenses above £2,500 in your tax code).

I guess I could tell them now that I won't need to complete one for 18/19, but would I be alright telling them to cancel the one for 17/18?

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Replying to Alex999:
ALISK
By atleastisoundknowledgable...
16th Oct 2018 17:37

Give them a ring, explain that the only reason for being issued the return was as you claimed employment expenses last year, but they have been PAYE coded this year, so there’s no adjustment and no other entries to go on the tax return.

See what they say.

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By GW
16th Oct 2018 17:17

I agee with Lone Wolf
1) HMRC guidance on gov.uk says you need to file a return
2) Taxes Management Act doesn't say you need to file a return for any level of expense claim
3) guidance on gov.uk is not always accurate
4) If HMRC are allowing the expenses via your PAYE code already and they haven't asked for a return there is nothing to do.

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By Matrix
16th Oct 2018 18:41

You will either need to submit it or get it cancelled so you may aswell do the latter.

Ignore their list - they regularly take my Director clients and those earning over £100k out of self-assessment despite their criteria.

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By lesley.barnes
17th Oct 2018 09:14

"One accountant has told me I need to as I have claimed more than £2,500 in my tax code as an expense, the other has told me I only need to file a return if I make a claim for over £2,500, as it's already in my tax code I don't need to."
Alec - looking at your previous posts you state you are an accountant who operates a single director/employee practice. Could this be why you've been asked to complete a tax return?

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By justsotax
17th Oct 2018 09:48

For me its a balance between cost for some to deal with a return (or hassle for them to do it themselves) and for the problems that could be caused by not submitting a return (not getting the correct refund/not having it paid directly to your bank/wrong adjustment to code resulting in over or underpayment etc etc etc).

Personally in this situation I would complete a return - you know the figures are correct and you mop up any under or over payment at the earliest opportunity - otherwise you are leaving it in the hands of the Revenue - and that never ends well!!!

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By David Heaton
17th Oct 2018 12:36

If you are an ordinary employee, just because you have employment expenses in this year's tax code does not mean they will be in next year's. They are in this year's because you filed an SA return for last year to claim them. How will HMRC know how much to allow if you don't file a claim each year, either by P87 or SATR (or PTA)? The £2,500 limit was set for the P87 process - the employee could simply submit a claim for expenses rather than a full return.

Having said all that, if you are indeed your own employer, as someone has suggested, why do you not simply exempt the expenses if they are allowable - reimburse yourself tax-free? Until recently, you would have needed a dispensation to omit them from a P11D and your tax return, but dispensations have been abolished. If they are deductible under the normal expenses rules, you can reimburse yourself without troubling HMRC - no P11D, no claim. HMRC's system will have included them in your PAYE code automatically, untouched by trained human hand, but they should have been paid to you tax-free anyway under the current rules, so your tax code may be taking too little tax off you. If they have been paid to you gross, you don't need any extra relief through a code addition.

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