Some news, views and comments about everything and anything, relevant and irreverent.
Reminding you that you need to claim business expenses is never likely to be at the top of customer engagement priorities at HMRC. We’re not at any time soon expecting the Chancellor to announce a recruitment drive for a crack team of roving inspectors, with unilateral powers to visit business premises at will. When there, they’ll demand to see your receipts and scrutinise them. Then, they’ll take you aside and say: “We see you haven’t claimed all your travelling and subsistence for those three days of customer visits you did last month … let me help you with that so you don’t pay too much tax this year.” Dream on …
Until such times as they do - about the same day as Hell freezes over - Springfords is here to help. That should come as good news to the four-fifths of micro-businesses who fail to claim back all the expenses to which they are legitimately entitled. A survey conducted on behalf of Edinburgh-based accounting software developers FreeAgent found that we’re far from being concise about claiming our deserved expenses. Over a third of respondents said that they just couldn’t handle the administrative hassle of small claims of up to about £10, or that they were simply not good enough at holding on to receipts.
However, there are plenty ways to streamline expense claiming, and all your other bookkeeping tasks too. It shouldn’t be forgotten that all those inconsequential expenses add up over time to a significant figure for every business - from sole trader to corporation.
HMRC has targeted tax avoidance so that’s perhaps why one in ten small businesses say they don’t claim their expenses, for fear of being challenged. The knock-on effect is that there are a huge number of people writing off their own business expenses and consequently they personally or their companies are paying too much tax.
The administrative costs could also be perceived to outweigh the benefits, if no attempt is made to automate the process. Business owners often respond by saying they ignore smaller expenses just for that reason. However, we would say you’ve not really looked at the overall benefit , or how technology can help you to make it more worthwhile.
At Springfords we’ve plenty of good, sound advice to give. The easiest to give and simplest to implement is to be methodical. There’s nothing wrong with keeping a track on your expenses. We’d argue it’s a measure of your professionalism to make that request for a receipt every time. We can also give you advice on what you can and cannot claim.
Expenses need not be exasperating. Software is out there that make it possible for everyone to handle their expenses as simply as they handle their smart phones. Download an app, snap a picture of the receipt using your smart phone, and optical character recognition can take you most of the journey without any more paperwork.
With the high-profile HMRC campaign aimed at high-level tax avoidance, it’s perhaps a concern that over one in ten said they wouldn’t claim their expenses for fear of being challenged by the authorities. We can’t see those ‘expenses assistance officers’ being recruited anytime soon, but we would like to see you reclaiming all that is due to you, just as soon as possible. If we can help, then that’s a claim we’d like to make worth your while too. Give us a call to find out more about what you can claim and the software that is out there to help you get organised. Expenses are legitimate, and that’s the bottom line.