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What is the best way of claiming expenses for previous years

What is the best way of claiming expenses for...

I have taken on a new client. They asked me whether an item of expenditure which the previous accountant wouldn't include was allowable or not. In my opinion it was. I would have no problem in claiming the expenditure in the current tax year. However what is the best way of claiming back past expenditure. I was thinking of including all past expenditure in the current year and covering myself with a note in the tax return even though I suspect that notes are never read by HMRC. The alternative would be to write to HMRC which in the current climate might take a very long time and involve alot of long drawn out correspondence with HMRC. What would you do?


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17th Jul 2012 10:50

It depends ...

... on:

whether the client is a company or a sole traderthe magnitude of the itemthe nature (visibility) of the item

If you give us the facts, you might get a proper response, but the last two things I would do is to include a white space note in the tax return (come to think of it, there is no such facility on a CT600, so you must be talking about a sole trader) or write to HMRC about it.

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to JCresswellTax
17th Jul 2012 19:32

Hi Euan

The business is a sole trader. A few years ago they increased their mortgage to buy a business. The business was a florist's shop. After increasing the mortgage the percentage applicable to buying the business was almost 50%.


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17th Jul 2012 21:26

Surely ok

Yes,  interest on additional mortgage taken out for business purposes is surely an allowable expense; it seems astonishing that the previous accountant didn't know this. 

Personally I'd do (and have done) as you suggest - bung it in this year but make a note, perhaps adding that you're also trying to simplify things. No, it won't be read, but that's not our problem, at least you've pointed it out.

As to notes on the CT return no, I don't think you can, but our Iris software does allow notes to be added to the tax comps.



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