Limited or No Records

Julie2011 Registered Posts: 33 Epic contributor 🐘

I am doing some work for an IT guy who has not been very good at keeping his receipts for his expenses and has never claimed CA for any of his equipment.

Does anyone know whether it is acceptable to put allowance figures through i.e he has obviously purchsed P&S but has no receipts, his business cant operate without it so could you put into his accounts a calculated approximtation?!?!?

I sub-contracted for an Accountant who did this all the time and then uplifted the figure by 5% each year, is this ok to do?? vDoes anyone else do it??

Thanks for your help


  • jamesm96
    jamesm96 Registered Posts: 523
    Yeah I see accountants making these sort of estimates. My personal view is that, regardless of the HMRC rules on situation, as long as the client believes the amount to be accurate then there's little to worry about from an ethical point of view; he's not claiming deductions that he didn't incurr. However, if he had an inspection it would become a problem so the client needs to be made aware a. that he may get in trouble for not keeping proper records for the appropriate length of time and b. he may well have those expenses disallowed by the inspector and be forced to pay over all the additional tax and penalties.

    In the real-world, inspectors that I have come across are not mercinary, heartless machines; if they can see you've been reasonable they'll likely be fairly lenient. There is, though, still a risk that HMRC might enforce the letter of the law so it's important that the client understands the risks.
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