HMRC have recently issued
a reminder about the various 'toolkits'
that they have developed to assist agents
when preparing returns. Although the
toolkits are aimed at tax professionals,
they highlight common errors and the steps
that can be taken to reduce those errors.
The first series of toolkits cover:
- marginal small companies' relief;
- capital allowances for plant and
machinery;
- personal and private expenditure;
- capital gains tax for land and
buildings; and
- capital gains tax for trusts and
estates.
The intriguing thing about all of the
toolkits is that the main area of risk for
all the above areas is record keeping or
the lack of it!
In addition, for capital allowances for
plant and machinery the main areas of risk
include:
- record keeping e.g. different
proportions of non-business use during
the period of ownership and detailed
records of all acquisitions and
disposals;
- acquisitions and disposals e.g.
whether the asset qualifies for capital
allowances; and
- non-business use of assets,
particularly cars.
For private and personal expenditure,
the main areas of risk are:
- record keeping e.g. non-business
expenses being incorrectly recorded or
misposted in the business records and
claimed in error as allowable expenses;
- personal bills being paid by the
business;
- travel and subsistence;
- entertaining, gifts, subscriptions
and sponsorship; and
- drawings and capital account.
So the moral is clear – good records
today keep the taxman at bay. If you would
like to discuss this area in more detail,
please do get in touch.
Link:
HMRC website |
