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Self Assessment tax returns

HubbleHubble New MemberRegistered Posts: 9
Hello. I work in the tax department of my firm and we are currently preparing tax returns, some of them on behalf of CIS subcontractors. Lots of these guys don't keep good records so it's fun trying to find adequate proof of their business expenses. I feel like Poirot. I have read that HMRC will allow a flat rate for "Use of home as office" of £4 per week without quibbling or asking any questions. Which box would you normally place this expense? There is not a specific box for "use of home" and I would be more inclined to place it in "other expenses" rather than "phone, fax, stationary and other office costs".
Also, we are using the short form return for a lot of clients as their income is below £79k. In the short form return, the self employment business expenses are shown as a total at the bottom. Are HMRC not interested in seeing how the expenses are categorised? Would they be less likely to ask questions and make an enquiry if they can openly see how the business expenses were broken down rather than shown as a total at the end? I understand it is not compulsory to use the short form return if your income is below £79K but is it better to use the full return (ignoring the pages not applicable) in the name of transparency?
Any responses on this would be greatly appreciated.

Comments

  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderModerator, MAAT, AAT Licensed Accountant Posts: 1,432
    Hi Hubble,
    there is a new flat rate scheme introduced for 2013-14 for sole traders to calculate use of home - guidance can be found here: https://www.gov.uk/simpler-income-tax-simplified-expenses/business-use-of-your-home

    I would put it under "other office costs" - what has been done previously? Consistency is key here.
    Regarding full accounts I believe a P&L can be attached to the SA tax return?

    Hope it helps,
    MN
  • HubbleHubble New Member Registered Posts: 9
    Many thanks MarieNoelle
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