The Money Column – February 2020

In this month’s Warrington Worldwide we have looked at the weirdest six excuses of the decade for the late submission of tax returns as published by the tax office, such as witchcraft exercised by the taxpayer’s mother-in-law.  So we thought that we might look here at some of the unsuccessful expense claims that have been made.

Before we look at these it may be worth reminding you that for expenses to be tax deductible then they must be:

  • Wholly and exclusively incurred in the course of your trade if you are self-employed; or
  • Wholly, exclusively and necessarily incurred in the course of your employment if you are employed, including being employed in your own company. This distinction may not seem very much.  However, that additional word raises the bar of deductibility immensely.  For instance, you cannot claim the cost of any use of your home unless it is impossible for you to do your job anywhere else, even if the expense was wholly for your work.

The first unsuccessful claim published by the tax office was the taxpayer who claimed for the cost of spending the Easter weekend in a caravan.  Perhaps he might have succeeded if he had worked Easter and had the following weekend off.  When we read this it did remind us of a client of our own who claimed the cost of attending a conference.  Our suspicions were aroused by a number of factors, such as the conference being held on the Isle of Wight and lasting for two weeks in August.  However, the main cause of suspicion was that the booking was for a double bedroom and a twin bedroom.  When we asked the client about this he agreed that claiming this was an error in his records.

The second one published by the tax office was the home worker who claimed the cost of a music subscription, stating that listening to music helped him to concentrate on his work.  We have not met this exact circumstance.  However, as Warrington is served by Virgin we meet quite a few clients who try to claim the whole cost of the Virgin monthly subscription, including their TV.

The third claim disallowed by the tax office was the cost of dog food for a guard dog.  You might think that was reasonable, and indeed it might be except that the dog was a Shih Tzu which, if you do not know, is a “toy” breed that almost makes a Chihuahua look vicious.

If there is a lesson to be learned then it is – keep your expense claims reasonable.  If you raise the taxman’s hackles by claiming expenses like these then you may be certain that they will look at the rest of your claims with a fine tooth comb!

If you have any queries in respect of this article please do not hesitate to contact us.